PERTH civil engineering and waste disposal business I&H Brown saw its pre-tax profits more than triple last year thanks to a significant revaluation of its property assets.

The group, whose activities also include property development, farm management and plant hire, posted a 214 per cent rise in pre-tax profits in the year to August 2016, with the figure rising from £2.1m to £6.6m.

This came despite the family-owned business’s operating profit dropping by 56 per cent from £2.1m to £918,000, with the group, which took on 30 additional staff members during the year, seeing a sharp rise in its cost of sales figure.

Despite group turnover increasing by 33 per cent, from £54.6m to £72.5m, the overheads incurred in producing that sum rose by 37 per cent, from £50.7m to £69.5m. Administrative expenses were also up, from £2.1m to £2.4m.

The pre-tax profit figure, however, was bolstered by a gain on the revaluation of investment properties worth £5.5m in addition to a £107,000 profit on the sale of some land.

It is not unusual for I&H Brown’s pre-tax profits to be bolstered in this way, with the sale of two farms near Kirkcaldy for Diageo’s £46m bonded warehouse complex gifting it a £5.4m boost in the 2012/13 financial year.

In a note to the company’s most recent accounts, which were filed at Companies House this week, managing director Scott Brown said that the group’s “considerable increase in turnover”, which was driven largely by its civil engineering division, was achieved with an “acceptable overall gross margin”.

The civil engineering arm, which also covers plant hire and waste disposal, is not only the group’s largest division but it was also its fastest growing in 2015/16.

In total the division generated revenues of £70.4m, representing a rise of 37 per cent on the previous year and accounting for 97 per cent of the total.

While the amount of income I&H Brown received from its investment properties was up 36 per cent to £936,000 its property development arm contracted by 72 per cent, with divisional turnover falling from £1.9m to £518,000.

“The group has seen significant growth in the civil engineering and remediation sector and this has been accompanied by pressure on resources,” Mr Brown said.

“The group continues to engage in property development and has made continued good progress in promoting sites through the planning system and preparing sites for development.

“Projects in Fife, East Lothian and Falkirk have progressed and we are pleased to see the housing market showing continued growth.

“Construction work has commenced at our Dunfermline site [where 1,000 mixed-use homes will be built] and we anticipate a national housebuilder being onsite shortly after infrastructure is in place.”

Mr Brown confirmed that the group is no longer developing a wind farm at North Calliachar in Perthshire “following the removal of subsidies”.

Its Slievenahanagan wind farm in Northern Ireland, which Mr Brown said has been “repowered” is expected to start producing electricity this year.

Elsewhere, the accounts reveal that the group took on a bank overdraft of nearly £3.7m during the year, with the facility secured against some of its freehold investment properties.

The last time the group had an overdraft was in 2011/12. The sum forwarded at that point was considerably smaller at just over £193,000.

Looking ahead Mr Brown said that while the group expects its marketplace to be challenging it anticipates improved margins on the back of higher volumes.