CASH-and-carry tycoon Mohammad Ramzan, one of Scotland's top Asian businessmen, has seen his business break back into profit after severing a long-standing partnership with his brother, the Govan MP Mohammad Sarwar.
However, a plan to establish a new wholesale delivery warehouse in Livingston serving the Central Belt, Fife and Tayside has been put on ice until rising turnover justifies the investment, Ramzan said.
The brothers split their business UWG in early 2002 after failing to agree on future strategy. Ramzan, who retained the name, took over its existing Flemington Street, Springburn operation, which supplies food, drink, and other products such as tobacco to small shops and petrol forecourts. Sarwar's half of the enterprise, based in Pollokshields, began trading as United Wholesale (Scotland), focusing on groceries and frozen foods.
The restructuring took its toll on the bottom line, dragging Ramzan's business into the red in 2002. In the year to December 31, the demerged UWG posted a pre-tax loss of (pounds) 72,000, compared with a profit of (pounds) 354,000 for the combined operation in 2001. The deficit was accounted for by a (pounds) 544,000 loss on discontinued operations, which Ramzan attributed to the closure of UWG's loss-making non-food business, selling electrical, DIY and gardening goods.
Last year sales remained flat at (pounds) 44.3m and operating profits from continuing operations dipped from (pounds) 609,000 in 2002 to (pounds) 347,000. However, the absence of any exceptional charges enabled the demerged UWG to post a modest pre-tax surplus of (pounds) 133,000.
Ramzan is upbeat about the future of the business after paying (pounds) 2m last year for a 40,000 sq ft site on Glasgow's south side, which he expects to substantially boost sales in 2004. He employed an extra 40 staff to run the Polmadie Road operation - which stocks groceries ranging from soft drinks to ethnic foods - taking his total workforce to 112. ''We will certainly have another profitable year,'' he said.
The company undertook few deliveries before the demerger but has now begun a delivery service from the Springburn site. Ramzan said he will seek new Central Belt premises around Livingston when sales reach a certain level.
Ramzan took just (pounds) 30,000 out of the business in pay last year, but drew on reserves to take a (pounds) 291,000 dividend.
Since the split, the brothers have affiliated with different cash-and-carry groups. UWG has stayed with Landmark but United Wholesale (Scotland) moved to the Today network.
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