Scots farm machinery dealer A.M. Phillip Agritech has warned of challenging times due to a fall in commodity prices.
The warning comes in accounts filed with Companies House, which reveal the firm experienced a boost in profits and turnover last year.
The firm, which is a Case IH and JCB specialist dealer, posted pre-tax profits of £685,917 for the year ended December 31, 2014.
This was up 80% on the year before when pre-tax profits totalled £380,962.
Turnover at the firm, which has depots at Huntly, Conon Bridge, Forfar, Fraserburgh, Perth and Glenrothes, was up 6.83% in the year to £32.072million, from £30.022million the year before.
In accounts the dealer said: “The agricultural sector in the UK remained relatively strong throughput 2014. Due to a fall in farming commodity prices, the directors believe that maintaining the level of sales may prove to be a challenge.
“In anticipation of a partial lowering in sales in the arable farming areas, the directors are looking to mitigate the cost of sales and the potential growth in sales through the relatively new Perth branch which should add extra revenue.”
The accounts also reveal that pay for the company’s nine directors rose slightly to £252,139, with the highest-paid director receiving £65,802.
During the year the company’s groundscare division – Gammies Ltd – went into members’ voluntary liquidation and its assets were incorporated into parent company A.M. Phillip Ltd.
Accounts for the parent company, which also includes lorry and commercial vehicle subsidiary A.M. Phillip Trucktech Limited, reveal a drop in turnover and profits.
Turnover at the group was £69.014million, from £70.703million previously, while pre-tax profits fell 11% to £980,641.
The group said: “Markets nationally continue to be competitive and the effect of pressure on margins has been mitigated by aggressive cost controls. Forecasts for 2015 suggest that group turnover and margins will continue at similar levels as for 2014.”
The group said major investment in its head office at Muiryfaulds in Forfar was planned for the year, while its depot at Huntly was set for improvements to its showroom and parts storage facility.
Last month the Agricultural Engineers Association (AEA) revealed that tractor sales in the first eight months of this year were down 16.2% on 201 at 7,937.
Figures from the association revealed the number of tractors, over 50 horsepower, in August was down 27.3% on the same month last year at 823.