Scots pallet supplier goes from strength to strength

Business Correspondent/Personal Finance Editor

Thursday 11 October 2012

Fife-based Scott Group, the UK's biggest supplier of wooden pallets to industry, has reported another strong year of growth and expects further acquisitions.

GOING FOR GROWTH: Norman Scott, managing director of Halbeath-based Scott Group, has presided over a spate of acquisitions across the UK. Picture: Stewart Attwood

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SIMON BAIN

Piloted by founder John Scott, who started the business in a rundown sawmill 25 years ago and is now based in Monaco to lead international growth, and older brother and 24% shareholder Norman Scott, who runs the business from Scotland, Scott continues to go from strength to strength, according to accounts just lodged at Companies House.

In a year in which the group reorganise into six trading divisions under a unified Scott branding, turnover rose by £9 million to £96m, operating profit was up by 10% at £4m, and pre-tax profit soared by 26% to £3.6m.Based at Halbeath, near Dunfermline, the group has expanded in the fragmented pallet industry with more than 30 acquisitions over 20 years to cover the UK, and has a manufacturing and supply base in Latvia. It also has a portfolio of packaging businesses, an equipment supply arm, an insurance service and a property division.Last year after a four-year pause it went back on the acquisition trail, picking up two pallet businesses in the north of England and west of England and one in Wolverhampton. Of its 833 employees, up from 824 the previous year, some 300 are north of the Border. Even the reorganised group excludes some Scott businesses, and the empire as a whole turns over more than £120m and has in excess of 1000 employees.The directors wrote: "The simplified group structure has resulted in tangible efficiency savings but more importantly has strengthened brand awareness and market position. The strength of our new group brand has facilitated an increase in cross-selling activity across all our divisions."They said trading conditions throughout the year remained extremely challenging with the majority of customers, and especially those in the construction sector, operating well below past activity levels, but continued: "A number of significant new business wins and continued focus on cost control and efficiency have helped deliver a satisfactory trading result."The group said it continued to evaluate acquisitions, and in a depressed climate it was vital "to strive for ever-improving efficiency to maintain competitive advantage and our market-leading status".The downturn has enabled UK sawmills to supply 70% of its timber needs, compared with only 30% when the group set up its Latvian operations to help fill the gap, prompting Scott to maintain production and expand into European markets. Norman Scott told The Herald last year: "We don't think the risks are overly onerous, we understand the pallet business and we have a well-proven track record."Three new directors were appointed to the board during the year, alongside the Scott brothers. The highest-paid director, assumed to be John Scott, received £136,159 including pension contributions, up from £106,900, but the dividend to the family shareholders was cut from £1m to £500,000.The accounts show net debt cut from £27.7m to £23.4m, capital expenditure down from £833,000 to £243,000, and the group's balance sheet value rising from £10m to £12m.

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Scots pallet supplier goes from strength to strength

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