Robison & Davidson, the Scottish construction group, greeted the credit crunch and ensuing housing downturn on the crest of a wave with record profits.
Robison & Davidson, the Scottish construction group, greeted the credit crunch and ensuing housing downturn on the crest of a wave with record profits, the company's newly-filed accounts reveal - and its executive chairman yesterday told The Herald this year "would not be too far behind".
The Lanarkshire-based company's bold stand comes after unveiling pre-tax profits of £1.1m for the 12 months to end of December, a year in which the Scottish housing market had yet to show signs of buckling, up from £946,000 the year before.
However, John Hume, Robison & Davidson's executive chairman and a major stakeholder in the firm, yesterday said the company had already "realigned its costs" and that it had also made strategic shifts to help weather the storm.
The Scottish property downturn began to take hold in spring this year and prospects for the industry have become bleak. A recent report from the Scottish Building Federation noted contractors used to filling their order books well in advance were now seeing them at less than two-thirds normal levels.
The credit crunch has not only hammered property prices, but has also led to a dramatic slump in the number of new homes built and sold.
At the same time, across the UK, recent figures from the Council of Mortgage Lenders showed mortgage lending last month was 10% lower than in August and down nearly 42% on September last year - and the figures also point to further falls in house prices.
Nonetheless, Hume said: "Last year's record profits came on the back of a lot of private housing activity. Our Meridian Residential arm sold 140 units last year, with a rise in the number of houses and average house price.
"But this year we expect private home sales to fall by 50%. But we are fortunate to have entered the affordable housing market, which we think will become more important in this current economic climate. Private house sales will be down, but affordable housing will be up."
He added: "We don't expect an upturn in the private housing market for at least a year to 18 months. But in terms of pre-tax profits, we won't be too far behind last year."
The company, which had been steadily building its private housing arm, won the 2008 Best Family Home award at The Herald Property Awards for Scotland for a construction in Newmains, Lanarkshire.
Hume also said the company had made 70 workers redundant earlier this year and moved into smaller premises at Eurocentral, off the M8 in Lanarkshire, as part of efforts to "realign company costs with the economic climate and weather the storm".
As part of the efficiency drive, the company also produces its own timber kits, kitchens, trusses and pvc windows.
Nonetheless, directors' pay last year surged to £461,000, compared with £340,000 after a 36% jump in turnover to £30.1m.
The highest-paid director, assumed to be Hume, last year earned £298,000, up from £194,000 the year before.
The company also appears to have solved the difficulties with its final salary pension scheme, which had hampered it in previous years, by agreeing to contribute a percentage of annual earnings - thus removing the liability from its balance sheet.
