Waste and recycling company John Hannay, one of western Scotland's oldest family firms, banked a £6.9m profit on last July's sale of its UK business and assets to quoted waste management group Shanks.
However, the state of the company's finances ahead of the disposal bears out the directors' admission that they were grappling with a "difficult" domestic market.
Hannay posted an operating loss of £3.7m in the year to August 31, 2006, compared with an equivalent loss of more than £400,000 in the previous 12 months. Turnover fell to £17.2m from £18.8m in 2005.
The company completed the sale of its UK business just before the year end, leaving it free to concentrate on its expanding Irish business.
The assets disposed of included waste management facilities in Scotland and south-east England, plus MustDestroy. com, a security shredding business in east London.
Shanks also took over materials-recycling facilities in Edinburgh, with an annual sorting capacity of 60,000 tonnes, and a similar facility in Aberdeen. It also acquired 38 vehicles, a customer base of 1700, while 110 staff at East Kilbride-headquartered Hannay transferred to the company.
Newly-published accounts show that Hannay booked a £6.9m profit on the sale, helping it to turn the hefty operating loss into a pre-tax profit of £2.8m.
Hannay is run by family owner Tony Abram, a great-grandson of the founder of the 103-year-old firm. "The net asset value of the company has been increased with cash reserves enhanced to £5.7m," the company said in its annual report.
"This will enable the company to actively pursue opportunities in Ireland, cementing our commitment to grow- ing our businesses in that market."
In 2005, Hannay completed the £3.3m buy-out of Wilson Waste Management, which has two depots in Belfast.
Hannay's highest-paid director was paid £611,999 in 2006, the accounts show, up from £240,610 in the previous 12 months.
The sale of Hannay's UK assets brought to an end 15 years of rapid expansion.
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