Dalziel Group, the Lanarkshire food technology and distribution business, has recorded another year of solid profits, further swelling the fortune of founder chairman William "Sandy" Dalziel, one of Scotland's richest men.
The company posted a pre-tax surplus of £5.2m in the year ended September 29, 2006, unchanged on the previous 12 months. Turnover edged up to £80.9m from £79m in 2005.
Bellshill-based Dalziel, which incorporates Dalziel Ingredients and English company DF Dickens, supplies food processing companies and butchers. It began expanding in earnest in the 1990s and bought close to 40 family businesses within the space of eight years. The firm employs 370 at 11 sales and distribution depots throughout the UK.
In 2006, Dalziel wrote off nearly £1m of goodwill on acquired companies. The firm did not charge this to profits however, revaluing the goodwill at zero since, in the directors' opinion, the firms concerned have been fully integrated and its value could not be ascertained.
Auditor HW chartered accountants took issue with this, qualifying the accounts on the basis that this treatment breached accounting rules. Treatment in accordance with Financial Reporting Standard 11, which requires that impairment losses be recognised in full, would have cut 2006 pre-tax profit to £4.2m.
"The directors are of the opinion that the accounts as presented give the correct view of the trading performance of the group for the year," Dalziel maintained in a footnote to the financial statements.
Ian Darroch, managing director, added: "Family businesses acquired in the 1990s are now well integrated within our existing operations and that integration process, together with acquisitions in 2006, will generate an increase in profit in 2007 and thereafter."
Dalziel's latest acquisition is Macnaughton & Wilson, a long-established family business based in Glasgow.
In 2005, Dalziel Group's two biggest shareholders, Sandy Dalziel and Darroch, sold £5m worth of shares back to the company to create an equity participation scheme for key staff.
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