McConechy's Tyre Services, the Ayr-based independent tyre and exhaust supplier, has bounced back sharply from two years of profit decline and says it is looking for acquisitions.
The family-owned business, which operates more than 50 outlets across Scotland and northern England, has posted a trebling of pre-tax profits from £332,117 to £986,603 in the year to April 30, still below the £1.2 million of three years earlier but more than double the 2009 result.
Writing in the annual report, the directors say that the recovery in the early part of the financial year, when they had reported double-digit earnings growth, proved to be a good barometer for the year as a whole. They say the improvements in turnover and profit had not been easy to achieve in difficult trading conditions, and note a significant strengthening of the balance sheet and increased cash generation.
McConechy's suffered from a 70% downturn in the truck tyre supply and repair market in 2010 and closed two branches, at Bishopbriggs and Brechin.
Last year the group opened a Montrose branch which the directors say has proved successful, and a further branch at Inverness opened in 2011. Staff levels were trimmed to 394. The balance sheet shows a strengthening of shareholder funds from £2.5m to £3.2m, as cash generation improved by £450,000.
The directors say they "continue to monitor the marketplace and watch with interest developments surrounding acquisitions and mergers in the industry", and "believe the group is well placed to take advantage".
McConechy's, founded in Ayr in 1956 by Hector McConechy and now owned and chaired by his son Derek with Donald Carmichael as managing director, increased its turnover from £40.5m to £41.9m, and operating profit shot from £1.2m to £1.9m. Finance charges rose from £871,000 to £934,000, but the group's bank loans and overdrafts with RBS came down during the year from £15.2m to £11.9m as net debt fell from £16.4m to £13.1m. There is no recommended dividend.
Total remuneration to directors rose from £334,178 to £340,874, including £187,280 to the highest-paid director.
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