North-east tractor dealer Sellars Agriculture experienced a fall in profits last year despite a boost in turnover.
The Oldmeldrum-based firm, which is one of Scotland’s main Claas dealerships, reported pre-tax profits of £263,392 for the year ended September 30, 2014.
This was down 33.6% on the year before and down 60% on 2012 when pre-tax profits stood at £662,956.
Despite the drop in profits, the firm posted a 6.3% boost in turnover to £33.915million, from £31.884million the year before.
In accounts filed with Companies House, Sellars said: “The external commercial environment is expected to remain competitive in 2014/15 due to exchange rate volatility and the price of grain and livestock.
“However, the directors remain confident that the company will continue to maintain its current level of performance in the future.”
Sellars, which also has bases at Forres, Huntly, Cupar, Perth, Letham in Angus and Newbridge, employed 78 staff in the year.
Managing director Neil Wattie said the increased sales took place in the first half of the financial year.
“It was a difficult year trying to make margins,” he added.
“The turnover is back in the current year; sales of machinery above £20,000 are way back but for any type of machine below £20,000 there’s not such a drop [in sales].”
The fall in grain and potato prices were having a major impact on farmers’ spending, with some producers opting to buy second-hand machinery rather than new, he added.
“I’m not expecting it to be any better for the following year. If farmers’ spending stops it hits us, as machinery dealers, first,” said Mr Wattie.
“But if you go back through the years we have seen this all before.”
Last month, figures from the Agricultural Engineers Association (AEA) revealed new tractor sales in the first five months of the year were down 17.8% on the year before to 4,766.
According to AEA data, registrations of tractors over 50 horsepower in January were down 8.3% on last year at 656; down 27.8% in February at 502; down 19.6% in March at 1,472; down 0.8% in April at 1,291 and down 32.7% in May at 845.