J&J Denholm, founded in 1866 as a Greenock shipping company, has reported pre-tax profits of £13.3 million across its Glasgow-based empire now spanning shipping, logistics, seafoods, and industrial and oilfield services.
The rise of £3m on the previous year is revealed in the latest Companies House of the group chaired by John Denholm, descendant and namesake of the company's Victorian founder.
Operating profits were up by 30% to £15m, but only thanks to a tax-free gain of £12.3m on the sale of the group's interest in Northbay Fishing Company. That obscured a £3.3m loss on a cable-laying contract in Gambia which ran into "severe difficulty" and a £1m decline in oilfield profits.
Pre-exceptional operating profits fell from £10.6m to £6.7m, hit also by the £2m cost of buying out pension liabilities of 45 employees. Turnover rose from £305m to £318m and employees fell by 109 to 3266. The highest director's pay was £479,000, up from £331,000.
Mr Denholm, 55, who is also the group's chief executive, admits in his report that, but for the exceptional gains, the results would have been "disappointing".
He says that in a difficult year for ship-owning and shipping the division improved profits by £595,000, thanks to better results from commercial activities. "Most sectors of the shipping market already face an oversupply of ships and this is likely to get worse, as the new orders that were placed in the booming market of the last decade are delivered."
Denholm will retain minority interests in two shipping groups, but expects to sell the Saga Andorinha and has written down its value by £1.3m in anticipation. Short sea shipping was healthy, while consultancy and shipbroking activities offset weaker performance from ship management and technical services.
Denholm spent more than £1.2m on two acquisitions, in container haulage and air freight, and created a new global logistics operation. However, overall logistics slipped back by £511,000, as demand from retailers was hit by the stagnating UK economy.
Pelagic processing was affected by mackerel prices, squeezing margins, but the catching side performed well and the Northbay sale meant profits rose £11.8m. Industrial services saw profits crash £3.7m due to the Gambian contract, yet to be completed.
"Oifield services had a disappointing year, with results in all areas, other than the UK and Azerbaijan, slipping backwards due to anticipated business not coming through as had been hoped," the chairman says.
The board has increased the dividend to the family-owned group by 5p a share.
Shareholder funds have increased £8m to £96m.
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