GRANT Asset Management, the Edinburgh-based residential property company, has returned to profit.

The group run by Peter Grant, which before the crash launched a £1 billion property fund with HBOS and sold the bank a 20 per cent stake, has reported a pre-tax profit of £479,641 for the year to March 31, after the previous year's £250,525 loss. Writing in the annual report just lodged at Companies House, the directors say they are "delighted with the return to profitability", with the property development and renovations division increasing business volume by more than 50 per cent. "The directors believe this level of increase will continue into 2014/15 as investor confidence in the property market continues to grow. The property management division continues to expand as the demand for rental properties is strong and increases in rents have been achieved."

Turnover rose from £5.2million to £7.1million, with the 2013 operating loss of £326,796 turning round into a profit of £478,757. Gross profit margin was static at 58 per cent. Shareholder funds jumped from £162,718 to £603,924. The group's headcount crept up from 67 to 69, while the highest-paid director assumed to be Peter Grant was paid £82,400 compared with the previous year's £116,599.

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The group ended the year with net funds of £2.25 million, up from £2 million. While most of the growth came in property development and renovation, with turnover up from £2.67 million to £4.26 million, the property management and interior design arm achieved an increase from £2.55 million to £2.83 million.

Mr Grant founded the firm in 1997, and was once in joint venture with Bank of Scotland in a buy-to-let fund.