A major private Scottish company has taken a £1.1m hit from a supposedly bedrock investment in Royal Bank of Scotland.
A MAJOR private Scottish company has taken a £1.1m hit from a supposedly bedrock investment in Royal Bank of Scotland.
Landowner and civil engineer I&H Brown lifted its pre-tax profit from £1.76m to £2m in the year to August 31 despite writing down most of the value of its £1.37m of listed shares, of which £1.27m were in Royal Bank and the remainder in HBOS.
Scott Brown, chief executive, whose father Hardie and uncle Ian founded the company 45 years ago, said the long-held shares had always been seen as "almost as good as money in a deposit account".
But the investment had more than doubled last year as a result of participating in the Royal's rights issue, when the yield had seemed attractive. "Like so many people we thought we were buying at the bottom ... We have written it down to something like 50p a share."
The sale of a Borders wind farm site to Scottish & Southern Energy (SSE) for £3.3m offset a £243,000 operating loss in the year to August 31 for I&H Brown, which lifted its predominantly civil engineering and contracting turnover from £28.1m to £37.5m.
The group is appealing against planning refusal by Perth & Kinross council for a scaled-down 14-turbine windfarm near Aberfeldy, where its Perth neighbour SSE is the conditional buyer, and in September it sold an Orkney site to SSE.
Brown said he welcomed this week's guidance from the Scottish government to local authorities to place more emphasis on economic factors in planning decisions.
"An inquiry reporter has already said he is happy with the 14 turbines," he said. I&H Brown exited opencast mining in 2006 to pursue its greener energy interests, but Brown said that if the planning climate eased he would still be interested in coal "if a good prospect comes along and somebody asks us to look at it".
He added that the group, which has an £11m contract for Glasgow's Commonwealth Games velodrome, hoped to benefit from the government's intended boost for public investment, and he believed turnover would hold up this year, though on tighter margins. But Brown added: "The main challenge for us is how much exposure we want to the housebuilding sector going forward."
The group already owns major development sites in Falkirk and Dundee and last week acquired an 80-acre site near Dunfermline from a private housebuilder, in the hope it will be zoned for housing.
