Huge rise in turnover and profits against last year’s figures
Scotland’s Top 500 companies have made a dramatic recovery according to Insiders new survey of the country’s best performing large firms with a huge rise in profits and a healthy increase in turnover.
Total turnover for the Top 500 – excluding figures from the Royal Bank of Scotland and Lloyd Banking Groups HBOS subsidiary which can make a huge difference to the picture simply because of their massive size - rose by seven percent to £146.85bn while profits soared by 38.9 per cent from £9.67bn to £13.34bn.
With the two banks included the Top 500 profits nearly doubled from £5.05bn to £10.98bn though turnover was barely up from £202.14bn to £202.48bn.
Overall 462 companies made profits this year compared to 437 in 2011 and just 432 in 2010. Some 299 companies showed growth in profits while 181 suffered a slump.
The trend for loss making changed dramatically with just 38 companies making losses compared to 63 in 2011 and 68 in 2010.
A total of 50companies went from loss into profit with another 13 slipping into the red.
Some 11 companies made bigger losses than last year and 15 companies in the red made a smaller loss than the previous year.
Total employee numbers for the Top 500 fell by 53,878 to 778,609 with 22,464 of them being shed by the two banks though many redundancies were outwith Scotland.
Just over half the Top 500 companies increased employee numbers while 44 per cent shed jobs and just 2.9per cent were unchanged.
Other big job shedders included Scotsman owner Johnston Press, which cut 626 jobs, and life and pensions group Aegon, which made 602 people redundant.
The biggest job grower was Stagecoach, which increased employee numbers by 1873, followed by Sky (Scotland),whose workforce grew by 1346.
Number one company in the Top 500 is once again SSE, which recently changed its name from Scottish & Southern Energy. Not only was it the biggest profit maker with earnings of £2.11bn but it also enjoyed the biggest turnover growth with a £6.78bn rise.
Standard Life remained in second place after enjoying a leap in its pre-tax profits leapt from £410m to £971m with turnover up by 8.2 per cent to £18.57bn.
The Edinburgh-based savings and investments specialist saw a strong performance across its UK operations. Assets under administration also rose by 16 per cent to £196.8bn from £170.1bn in 2009.
Chief executive David Nish says the UK market is continuing to develop rapidly as a result of regulatory changes and changing consumer trends. He adds the changes are increasing the opportunities available to the group. The investment in new products, customer propositions, services and marketing is helping us to increase our presence significantly in both the retail and corporate pensions and savings markets.
However Nish’s changes also resulted in job losses at the group, though some went as a result of the sale of Standard Life Bank and Standard Life Healthcare. The group has offloaded 600 jobs in the UK since last September.
During its half-year results the company said UK customer numbers for its DIY-style self-invested personal pension (SIPP) products rose 26 per cent in the first half to 120,800, while it secured 86 corporate pension schemes and added 41,000 new employees to a Standard Life pension scheme in total.
Standard Life spent a third of its operating profits from last year on buying new technology which Nish says will lead to a step up in profitability next year.
Total Upstream UK, which retained its number three position, benefited from the rise in oil and gas prices,which more than offset lower production in the year, as well as as25.9m gain on the sale of its interest in the Nelson field.
Profits at the French-owned,Aberdeen-based exploration and production business rose 20 per cent to s1.36bn with oil prices up from $60.06 a barrel in 2009 to $79.50a barrel in 2010 and gas up from 35p a therm in 2009 to 38.25p a therm in 2010.
The company continued a significant exploration programme including the drilling of the Edradour, Laphroaig and Oban prospects and preparations for two others at Corfe and Ardbeg.
It also received approval for the development of the Laggan and Tormore fields in the west of Shetland area and the Franklin and Islay fields.
Lloyds Banking Group life assurance subsidiary Scottish Widows climbed from seventh to fourth position after profits more than doubled from s121.4m to s331m.
Fears that the insurance and investments business, which employs 3000 people in Edinburgh, would be sold by LBG were dashed by new chief executive Antonio Horta-Osorio who announced plans to drive more sales of its policy within bank branches across the UK.
Total funds under management rose from £19.2bn to £19.7bn and total insurance premiums rose from £4.3bn to £4.7bn. The company’s directors said its results were satisfactory in light of the various factors it faced including market conditions.
In May Horta-Osorio recruited Aviva UK Life chief executive Toby Strauss to be Lloyds Banking Groups director for insurance, whose duties include overseeing Scottish Widows. He replaces Archie Kane who left the group following Horta-Osorios arrival together with Phil Loney, managing director of life, pensions & investments, and Andy Briggs, head of the general insurance division.
Suncor Energy which changed its name from Petro-Canada UK Holdings in Apri after merging with its North American rival climbs from ninth place to number five after a strong performance with profits up by71.8 per cent to £998.56m.
Overall net production in barrels of oil equivalent per day fell from 73,008 to 72,404, mainly associated with the commissioning of a new fourth platform. The Canadian-owned company’s profits were boosted by a £49m gain from the sale of non core production areas in the Scott, Telford and Triton areas to Dana Petroleum.
Sky (Scotland) moved up two places to number six with a strong performance as turnover grew by 10.4 percent to £1.55bn and profits rose by 86.9 per cent to £385.96m.
The British Sky Broadcasting Group subsidiary, which employs some 6000 staff in call centres in Livingston, Dunfermline and Uddingston, increased subscribers in the UK and Ireland by 418,000 to 9.8 million.
During the year the company opened as 2m training and recruitment centre which created 31 new jobs. SkysTalent Hub, on Kirkton Campus in Livingston, supports its operations in Scotland.
Chevron North Sea slipped one place to seven despite an excellent performance with profits up by 90 per cent to s963.2m and turnover increased by 18.7 per cent to s1.47bn.
The company, which operates the Captain, Alba, Erskine and Strathspey oil fields and has a 50 percent interest in the Britannia gas field, spent s21m on exploration compared to s55m in 2009 though research and development expenditure went up from s16.3m to s17.9m.
The Weir Group moved up from eleventh to eighth position after seeing a huge jump in profits from £170.4m to £276.5m. Revenues at the Glasgow-based group, which celebrated its 140th anniversary last year, grew by 17.6 per cent to £1.63bn.
Last November the group acquired US-based shale fracking wellhead specialist Seaboard Holdings in a £431m deal. Weir said the growing shift in North America towards unconventional oil and gas development and the rapid growth of high pressure hydraulic fracturing has increased demand for Seaboards products and services.
When it announced its half year results the group reported a rise in half-year revenue, orders and profits and said it had upped profit predictions for the full year.
John Wood Group slipped down from fifth to ninth place after a slight fall in profits from £166m to £164m though turnover rose from £3bn to £3.2bn.
2010 was a major year of change for the Aberdeen-based engineering and production services group, which sold its well support division to GE in a £1.8bn deal and also bought local rival PSN for £600m.
Shareholders in the group shared in a £1bn return of cash from the company equivalent to its whole market value two years previously.
The group, which employs 35,000 people across 50 countries, is now focused on its market-leading positions in greenfield engineering, production facilities support, and the industrial gas turbine after market.
At the half year it posted a 49 percent jump in profits thanks to strong global growth.
The PSN acquisition, which prior to a 2006 Bank of Scotland-backed management buyout was a division of US oil services firm Halliburton, has opened up new territories for Wood Group in North America.
Perth-headquartered transport giant Stagecoach Group stayed at number ten despite a 52 per cent rise in pre-tax profits to s191.2m, bolstered by more consumers using public transport to offset high fuel prices.
However it overtook Aberdeen-based rival transport giant FirstGroup, which fell from fourth to 13th position in the Top 500 after profits tumbled from s176.9m to s127.2m.
Stagecoach’s total revenues from the year rose by 10 per cent from £2.16bn last year to £2.39bn. Revenues across Stagecoach’s UK bus business, which has a fleet of 7000 buses operating in more than 100 towns, rose by 2.1 per cent for the year to April 30, 2011 to £896.3m.
Rail revenues, which include the South West Trains franchise and East Midland Trains, rose 4.2 per cent to s1bn while operating profits increased by 16 per cent to s48.4m.
Stagecoach said revenues from its US bus operation, which operates under the Megabus brand, rose by eight per cent to $529.4m.
Chief executive Sir Brian Souter, who was knighted in the Queens Birthday Honours, said the group was seeing growing demand for its bus and rail services in the UK and North America.
Shareholders also received a £340m windfall after it decided to offer 47p for each existing ordinary share as part of a move to overhaul the company’s capital structure.
FirstGroup said a “particularly disappointing” performance at its US First Student operation and impairment charges of more than £100m led to its profit slump.
During the year FirstGroup sold its German bus operation, which operates a fleet of 130 buses in the Rhineland Pfalz region in southwest Germany, in a £4.8m deal. New chief executive Tim O’Toole said the disposal was part of a wider strategy of smaller disposals by the group as it looks to focus on its core operations in the UK and North America.
The Royal Bank of Scotland Group, which was number one in the Top 500 for many years before it hit the buffers in 2008 with the global financial crisis, fell from 259th to 273rd place despite cutting its annual losses by more than half in 2010.
RBS, who are 83 per cent owned by the taxpayer, posted losses of £399m in 2010 against a £2.6bn loss in 2009.
There were 70 new additions to the Top 500 this year including three companies which were previously in Insiders SME300 listing of the best performing small and medium-sized enterprises.
Speymalt Whisky Distributors, Iomart Group and Bright Purple Resourcing all joined the Top 500 after seeing their turnover exceed £20m.
Four former Top 500 companies AC Yule & Son, Festival Group, Inchmuir and Subocean went into administration.
The biggest rank climber was Grieg Seafood Hjaltland UK, which soared from 482nd place to 127th.
The Aberdeen-based firm, which runs salmon farms in Shetland, the Outer Hebrides and the Isle of Skye, climbed back into the black with a profit of £18.7m compared to a loss of £1.6m last year.
The insider ranking is calculated using a computation between annualised turnover and pre-tax profit. The cut-off point for inclusion of company financial information was November 28, 2011.
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