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Partnerships help Rettie to bounce back

Rettie & Co, the estate agent and property manager, has staged a strong recovery in profits and says its investment in new partnerships is paying off.

After seeing pre-tax profits fall by more than one-quarter to £181,236 in 2011, the family-owned firm, headed by major shareholder Simon Rettie, has posted 2012 profits of £448,484, a rise of 147%.

It was achieved on a 15% rise in turnover to £5.18 million, according to accounts just filed at Companies House.

The directors write that the prevailing uncertainty in the economy "continues to restrict trade in both volume and value". But against that background, estate agency fees were up by one-third and management fees by 11%, while development fees were flat.

Non-transactional income contributed 22% of income against 25% the previous year. The gross margin was up from 38% to 41%, there was a £100,000 dividend (nil in 2011), and shareholder funds at the Dunbar-based firm rose from £1.69m to £1.92m.

Its cash at the year-end had risen from £2.32m to £2.78m, and the highest-paid director, assumed to be Mr Rettie, received £132,866 (compared to £112,743).

Rettie's divisions include new homes, land and development, rural property and farms, letting and management, and professional services.

Mr Rettie said: "We are pleased with the growth. We continue to reinvest a lot into the business, establishing our systems so we can continue growing and gain a greater market share."

The uplift takes no account of Rettie's new partnership offshoots, at Berwick-upon-Tweed, Byres Road in Glasgow, and Bearsden in East Dunbartonshire, which are accounted separately.

Mr Rettie said the first one, in Glasgow's west end, has "gained a big market share in a relatively short period of time" and was ahead of expectations at this stage.

He added: "It is a structure where the key personnel have a share of the business ... we hope it will encourage and bring more good people into our fold."

Employment during the year rose from 92 to 104. Mr Rettie said that reflected "investment in a management platform that will allow us to manage the growth when it comes".

On housing market data from the Registers of Scotland, showing transactions up 3% last year but average prices down 1.5%, Mr Rettie said prime central Edinburgh and prime west end of Glasgow were "definitely stronger markets than any other areas".

On the prospects for improvement, he said: "Finance availability will remain a major factor for some time. There have been suggestions that things have eased a bit but what's being done is not going to help a great deal. It remains the desire of people to own their own houses so there remains a pretty significant shortage of new homes and affordable homes – we need houses."

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