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Malcolm profits up to £4.9m as it seals bank deal

MALCOLM Group, the Scottish-headquartered logistics, construction services and waste management company, achieved a further rise in profits in its past financial year in a tough economic environment.

IN THE DRIVING SEAT: Andrew Malcolm praised a 'very creditable performance'. Picture: Colin Mearns
IN THE DRIVING SEAT: Andrew Malcolm praised a 'very creditable performance'. Picture: Colin Mearns

The company, majority-owned by chief executive Andrew Malcolm and brother Walter, also unveiled a £50 million, five-year refinancing deal.

This includes a £23m funding package from Barclays. Andrew Malcolm noted the remainder had come from HSBC and Santander, with HSBC providing the majority of this portion.

Malcolm Group announced it had made pre-tax profits of £4.9m in the year to January 31. This was up from £4.4m in the prior 12 months, and from £2.4m in the year to January 2010.

Group turnover jumped 11.7%, from £170.4m to £190.3m.

This took it back above the £179.2m figure recorded in the year to January 31, 2010, with Andrew Malcolm citing a rise in activity in both the logistics, and construction services and waste management divisions.

He said activity levels in both divisions in the opening six months of the current financial year were ahead of those in the company's previous first half.

He added that this "augurs well for the full year". He described a rise in Malcolm Group's trading profit to £5.9m in the year to January 31, from £5.6m in the prior 12 months, as "a very creditable performance given the general economic backdrop facing the group". Trading profit is stated before gains on sales of assets, goodwill amortisation and net interest payable.

Andrew Malcolm said trading conditions were "challenging" but business was "steady".

Asked about the economic outlook, he cited a nervousness among some customers about the future and replied: "I think there will be equally as many challenges lying ahead."

However, he added: "I do think there will be opportunity there as well."

Malcolm Group, in which private equity firm Caird Capital has a minority stake, was taken off the stock market in a public-to-private deal in 2005. The Renfrewshire-based company employs nearly 2000 staff, about 1500 of them in Scotland. It operates about 470 trucks, and also has rail-freight services and terminals.

Andrew Malcolm noted that Scotch whisky, "directly and indirectly", was "by far" the company's biggest sector. He cited its transportation of empty glass bottles to bottling plants as well as storage and handling of finished Scotch whisky product. Malcolm Group also has a significant customer base in other sectors including food and paper.

Andrew Malcolm said the company could have done the refinancing more quickly if it had opted for a shorter term for the debt facilities. He emphasised his desire for a five-year arrangement, thus enabling a "focus on how we develop the business".

The construction and waste management services offered by Malcolm Group include tipper and plant hire, quarried stone and recycled aggregate supply, and landfill and recycling facilities.

Malcolm Group's net debt fell from £20.5m to £19m in the year to January 31.

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