The Courier & Advertiser (Fife Edition)
Fife bus firm hit by rising costs despite sales increase
Moffat & Williamson gross margins squeezed by depreciation charges
Rising costs weighed on Fife bus operator Moffat & Williamson’s profits last year despite an increase in sales.
Newly filed accounts show turnover rose from £4.5 million to £4.7m for the year ending November 30 2017.
Rising costs and the effect of depreciation meant the company’s pretax profit fell 16% to £193,800.
In his strategic report, director George Devine, who is the company’s majority shareholder, said: “The gross margins have been squeezed slightly this year, mainly due to increased depreciation charges from the new buses.
“There was also an increase in direct wages costs as the company increased staff numbers ahead of the commencement of new contract work.
“Margins excluding depreciation have remained relatively steady over the past two years.
“Operating profit has reduced from £356,000 to £301,000, however, if the effects of depreciation are ignored the operating profit is £70,000 higher than in 2016, something the company is very happy with.
“The effects of deferred tax meant a small loss is reported after tax. However, the company is delighted with the operating profit before these accounting adjustments and also the positive cash generation in the year.”
The 73-year-old family firm has its headquarters in Newport and a depot in Glenrothes.
With a fleet of more than 70 buses, it runs several timetabled services and also has 20 coaches available for hire.
The company increased its number of drivers and mechanics last year with the average number of staff employed rising from 89 to 98. Moffat & Williamson recently successfully tendered to run services in Angus. This move and other contract wins meant the firm bought an additional seven buses.
“The company has once again invested heavily in the fleet and the business continues to grow which leaves the directors very satisfied,” Mr Devine added.
The firm highlights its key risks as the loss of key contracts, increases in costs and competition, uncertainty over Brexit and terrorism threats and attacks in Europe.
Mr Devine said: “The company continues to service its customers well and attempts to ensure its markets are as diverse as possible to minimise the impact of these risks.”