Profits of more than £9million a year ago have turned to losses of £5.5million at Scottish Sawmill business BSW Timber.
The company, which runs mills at Fort William and Boat of Garten, near Aviemore, yesterday blamed rising log prices and “fiercely competitive” imports for the reversal of fortune.
And chief executive Tony Hackney warned the impact of Brexit on construction and manufacturing meant the firm would continue to face “a level of uncertainty.”
The pre-tax losses were revealed in BSW’s annual accounts for the year to the end of March 2016, lodged recently with Companies House. In the same period turnover at the company, based in Earlston in the Borders, rose by £35.4million, compared to the previous year, to £245million.
During the year, BSW, which operates seven sawmills in the UK and one in Latvia, acquired Stirling-based forestry and woodland management company Tilhill Forestry for £8.6million. The company’s workforce grew by nearly 200 to more than 1,200 in the period.
Yesterday, Mr Hackney said: “The 2015/16 financial year has been a challenging one for BSW.
“The company has faced consistent increases in log prices, as well as fiercely competitive imports of sawn timber, compounded by the strength of sterling during that period. This has all significantly hampered our ability to increase margins across the business.”
He added: “We will continue to face a level of uncertainty as a result of the Brexit decision, as the construction and manufacturing sectors struggle to recover.”
In the introduction to its financial statements, the company noted it continued its investment programme, despite the losses. The report added the business was well placed to continue to grow its market share, with new products and markets being explored, “aligned with a continuing recovery in UK demand.”
The directors recommended the payment of a dividend of 5p per share for the year.
At the end of November, BSW announced it was expanding its energy products division, BSW Energy, with a major investment programme for its manufacturing base at Fort William.
The company said its investment in the Lochaber site would allow it to expand its conversion of co-products, such as wood chips and sawdust, into a range of wood fuels for trade and domestic use.
BSW launched its energy business following the integration of Suffolk-based biomass company, Bridgebrook Energy into the company in 2015.