SCOT JCB, the building and farm machinery supplier, has reported record profits for a second year in a row amid buoyant conditions in the Scottish construction sector.

The Glasgow-based company lifted profits by nearly seven per cent to £4 million in the year ended December 31, as turnover leapt to £117.1m from £103m.

Accounts newly filed at Companies House show Scot JCB, majority owned by Steve Bryant since he led a management buyout from Hewden Stuart 17 years ago, beat its pre-recession profit record in 2014.

Scot JCB posted profits of £3.8m in 2013 as housebuilding activity picked up following the recession, beating its previous record of £3.4m set in 2007.

Mr Bryant, who owns 90 per cent of the shares in Scot JCB, signalled that will be “ploughing” most of the profits made in 2014 back into the business.

And he said that trading conditions continue to be healthy in the firm’s current year, noting that he will be “disappointed if we don’t get to £125m” turnover this year.

Scot JCB has 12 depots in locations across Scotland and the north of England, with the four English sites now accounting for 20 per cent of its business.

Mr Bryant said: “The market is buoyant, our construction customers are very busy all over Scotland and the north of England, and we are getting the benefit of that.

“The downside is that the margins are under threat. We have suffered there a little bit. In our heyday before the recession of 2008 we were making 3.8 per cent – today that will be 3.4 per cent.

“Whilst we are doing a lot more we are still marginally behind where we were in pre-recession teams in terms of profit retention. But we are in a good place and pushing on.”

While confidence is high in construction and housebuilding, Mr Bryant conceded conditions continue to be difficult for its customers in agriculture, which accounts for 20 per cent of Scot JCB’s business.

However, the company has no intention of walking away from the market, and highlighted that its acquisition last year of Kelso & Lothian Harvesters, a JCB agricultural machinery dealer with two depots, was working well.

Mr Bryant said: “The farmer is having a tough time, especially in dairy. That is having its effect. However as far as we are concerned we still want to continue to invest heavily in agricultural.

“We wouldn’t have bought Kelso & Lothian last year if we weren’t confident that through time it will come back.”

Mr Bryant noted that the company had net assets of £21.1m at the time the accounts were filed, which he said was helpful when it comes to buying machinery from the big suppliers.

The accounts show that interest charges grew to £198,000 in 2014 from £77,000 in 2013, which Mr Bryant put down to the firm’s attempts to “take advantage of manufacturers doing special deals.”

The company currently has £4.5m of used equipment it is looking to sell on the export market. Mr Bryant said that market currently challenging because of the strength of the pound, conflict in some countries and difficult conditions in established markets such as India, Russia and South America.

He explained: “Our interest charges are far higher, I don’t like it. But it is being done to try and drive more business.”

Mr Bryant added: “Our secret is about how well we can buy to enable us to give the customer a good deal. That’s what we are about.”

Staff numbers at Scot JCB averaged 213 in 2014, up from 188, with around 50 per cent of that figure employed as engineers.

“We’re all about fixing somebody quickly when he is in trouble,” Mr Bryant said. “We employ far more engineers than our competitors. Hopefully that means when our competitors shout we are able to be there quickly for them and get them back in business.”

The firm currently has 26 apprentices on its books and has a policy of promoting from within.

Mr Bryant noted that the construction sector has had a skills shortage on its hands since the market began recovering strongly from the recession.

He also observed that the plant hire business, which Scot JCB supplies, is suffering from an over-supply in certain areas. “But I honestly think that is probably because lots of these businesses have been buying very strongly to satisfy demand. Some have maybe been a little too bullish.

“I can think of quite a few of them who have done that, but they are still having a very good time of it out there. We do a lot with ground works contractors and housebuilders and they are all flat out. They will all tell you there is a desperate skills shortage out there.

“That’s something that hopefully be addressed.”

The directors of Scot JCB paid an interim dividend totalling £557,448 during the year, up from £471,253, and said they did not recommended paying a final dividend.

The accounts show that the staff costs rose to £9.1m from £7.8m, while directors’ pay went up to £1.3m from £1.1m. The highest-paid director received emoluments of £293,000, compared with £270,000 the year before.