THE recovery in Scotland's ­housebuilding industry has been underlined by strong results from Muir Group, the Fife-based family-owned company which a year ago reported its first-ever loss.

Muir turned a £1.1 million loss into a £2.9m pre-tax profit in its latest financial year, on turnover up from £62m to £66m, helped by a 50% rise in turnover and a doubling of profit in its homes division.

Muir Homes is one of the 25 housebuilders signed up to the Scottish government's MI New Home mortgage indemnity scheme for low deposit buyers of new build homes, which with its English equivalent is seen as helping to fuel the upturn in the housing market.

Its 2012-13 performance saw ­turnover rise from £14m to £22m and profits from £895,000 to £1.8m, underpinning the group's turnaround in operating profit from £1m loss to £2.6m profit.

"This was a combination of improved house sales and some social housing contracts in Anstruther and Montrose," Muir said.

The group has 10 live developments including the Maritime Bond at Leith and Deer Park in Livingston where it developed the European tour golf course. It has further golfing ambitions for its site at Blairs College in Aberdeenshire.

Housing contrasts with a continuing squeeze on margins in contracting, where on a turnover of £37m Muir recorded a pre-tax profit of just £2000 - significantly worse than the previous year's £466,000 profit on £38m of work. However, Muir said: "Given the fiercely competitive nature of the tender market this was a considerable achievement."

There was also a sharp turnaround in the group's property and investment arm, which in 2011-12 took a £4.5m land writedown in its joint venture with the Scarborough property group at Rosyth, pushing the group to a net operating loss of £1.9m. The accounts just filed at Companies House show a £3.5m turnaround for the division, which contributed £1.6m or almost half of the pre-tax profit in 2012.

Scarborough Muir bought the Rosyth waterfront, one of the UK's most heavily-contaminated sites, from the Ministry of Defence in 2000. The demolition of a nine-acre ex- naval fuel bunker and removal of a million tonnes of concrete began in July 2005. However work slowed in 2008, because of the drop in demand for the recycled materials needed to help fund the project, and is due to be finally completed this year.

Plans for a mixed-use development were supported by local communities but rejected in 2010 by Fife council, which wants to see port-related use. The joint venture partners, which originally began working together 30 years ago, now hope to turn the Rosyth waterfront into a renewable energy park attracting £500m of investment in offshore wind turbine manufacturing and servicing, powered by a waste-fuelled renewable energy plant, creating 3500 jobs.

The accounts show employment across the group fell from an average of 292 to 276.

Muir injected £360,000 into its final salary pension scheme, where the deficit grew from £1m to £1.3m - a £1m rise in the value of its assets was offset by a £1.5m increase in the cost of pension obligations, as inflation assumptions rose and the discount rate (used to value liabilities) fell.

The highest-paid director, assumed to be chairman and owner John Muir, 75, the former joiner who founded the group in 1974, saw his remuneration rise from £130,000 to £218,000, but there was again no dividend. Shareholder funds rose from £64.6m to £66.2m, and the debt-free group had net funds at the year end in February of £11.9m, up from £11.5m.

Mr Muir still hopes for growth from Muir Timber Systems, which operates from a computerised factory at the group's Inverkeithing headquarters, powered by the biggest solar panel roof in central Scotland.

The group said it "remains in an excellent position", and had this year bought out the Stockland shareholding in its joint venture in Aberdeen and signed two development deals for the site, one of which was under construction.