Sale windfall boosts I&H Brown profit to £4.3m
Contract settlement helps family firm
I&H BROWN, the civil engineer and developer rich in land assets, has demonstrated its underlying strength with a £4.3 million pre-tax profit for 2012.
Mor e recently the Perth-based family empire netted a “significant” windfall from the sale of farmland near Kirkcaldy to Diageo for the drinks giant’s £46m bonded warehouse development, and it is currently sitting on £8m of cash.
Last year’s profit, on turnover up £4m at £39m, is twice the combined pre-tax gain of the previous three years and is due to the successful settlement of a dispute over a major civil engineering contract for the M80 motorway.
I&H Brown , a sub-contractor for the main consortium led by Bilfinger Berger, saw heavy losses on the contract push it to a £4.8m operating loss in 2011, and had been pursuing the consortium for up to £5m.
Scott Brown, c hi e f executive, whose father Ian and uncle Hardie founded the company almost 50 years ago, said: “We settled at somewhat less than that, but it was a significant contract for us, we were always hopeful we were going to settle it, and both sides are pleased to have settled it amicably.”
I&HBrown made a timely switch from opencast mining into renewable energy a few years ago. It is currently working on a plan for an extension of the Calliachar wind farm in Perthshire, which it sold to SSE in 2011 for £5.1m, offsetting its M80 losses.
The project triggered a long planning battle with Perth & Kinross Council over the 14-turbine farm, eventually settled by the Scottish Government in the company’s favour. The extension would add seven more turbines.
Mr Brown said the group was“proceedingcautiously” over wind farm potential on its land now because there was “probably less opportunity than there was”, but he said wind-farm construction was proving a lifeline for the contracting industry at a time when conditions were difficult and showed little sign of upturn.
Mr Brown said: “Onshore wind is still giving us a lot of business, and we would be very keen to get involved in offshore-related work.”
One of the group’s biggest recent civil engineering contracts was a £4m project for German utility RWE to upgrade docks at the former Cammell Laird shipyard on Merseyside for heavy wind turbine traffic. “It could happen elsewhere,” Mr Brown said. “We think the work we have done at Cammell Laird strengthening the quayside could equally apply to ports in Scotland. We would be interested in talking to authorities such as Forth Ports about similar opportunities.”
I & H Brown continues to progress its long-term plans for sites at Dunfermline and Banknock, which have outline consents for 1500 houses between them, and for the former ABB factory site in Dundee.
“We are also working on land we own at Kelty (Fife) which we believe will produce some housing in due course,” Mr Brown said. I & H Brown ended the year with shareholder funds of £32m, despite no recent revaluation of its 2500 acres of farm land.