New credit arrangements and pension gains lift annual pre-tax profits to £238,782
Livestock auctioneer John Swan and Sons is reported to be back in profit though full-year gains came largely from a pension adjustment.
Pre-tax profits for the year were £238,782 compared to a loss of £397,676 last year.
The Newtown St Boswells-based company said profits from its mart business rose from £63,551 last year to £184,508 for the year to April 30, 2012.
This gain was put down to an increase in livestock values, which had “to a certain extent” offset a reduction in the size of the beef herd and sheep flock and new credit arrangements put in place last year to tighten cost controls.
Revenues rose slightly on last year, from £1.9 million to £2.06 million, though staff costs dropped to £706,485 against £1.1 million a year ago.
Chairman Alastair Ritchie said: “Last year's exercise in reviewing our credit arrangements has continued this year with cash resources increasing by £900,000 over the prior year and with debtors falling by a similar amount.
“It is particularly pleasing to note that £500,000 of the reduction in debtors is in the 'over 21 day' category, reducing our exposure to bad debt risk.
“PLC costs fell from £181,227 to £179,726 and the board remains focused on controlling these costs as far as possible.”
The group's financing costs dropped to £24,032 compared with £141,046 last year.
Its Swan & Turner division, which specialises in auctioning antiques, fine art and collectables, is continuing to grow, the company said.
However, its John Swan Properties division, a chartered surveyor division specialising in property consultancy across a wide range of disciplines, including renewable energy, is reported to be making progress in both property and renewables, though “very much at the mercy of the current economic climate”.
In preliminary results reported today, the company said the decision to close its pension fund to future accrual on April 30, 2012 had created a surplus in the profit and loss account of £234,000.
This compared with a cost of £280,000 last year.
However, the full recognised surplus, amounting to £374,000, was not recognised in the current financial year as accounting rules only allow the surplus to be recognised if the firm was obliged to pay future contributions to the scheme it would not be able to recover.
In a statement to the market today the company said: “Following the closure of the pension scheme to future accrual on 30 April 2012, it is not considered appropriate to recognise the surplus of £374,000 as at that date in the balance sheet.”
Ritchie said: “The decision to close the pension fund to future accrual on 30 April 2012 has created a surplus in the profit and loss account of £234,000.
“This is a reversal of some of the costs taken to the profit and loss account in prior years.”
John Swan, which has bases at Newtown St Boswells in the Scottish Borders and Wooler, Northumberland, said it intends to pay a five pence per ordinary share final dividend on October 1, this year, which will be the total dividend for the year as no interim dividend was declared.
The group's net cash from operating activities was £1.03 million for the year against a cash deficit of £198,992 last year, leaving a net cash position of £1.05 million, up from £152,080 last year.