Smith Anderson said it was well placed to move forward after returning to the black in the latest period during which the demise of its paper-making operation left it focused on packaging.
Accounts for Smith Anderson Group filed at Companies house show it made an operating profit of £1.7m in the year to March, which was a landmark for the Fife-based firm.
The surplus compares with an operating deficit of £3.4m in the preceding year, when the 150-year-old Smith Anderson & Co paper-making operation in Leslie was fighting for survival in the face of stiff competition and rising costs.
The subsidiary, which had employed more than 150 staff at its peak, ceased trading in June 2006, blaming soaring energy prices and the costs of funding its deficit-stricken pension schemes.
Since that date, privately-owned Smith Anderson has completed a rationalisation programme which has left the group focused on making paper and plastic packaging in Falkland.
Claiming to be the largest integrated bag manufacturer in the UK, it produces more than 45 million printed bags weekly for customers including fast- food and other high street retailers.
The shrinkage of the business was reflected in a sharp fall in turnover to £20.7m in the latest year, from £53.7m.
In their report to the accounts, the directors wrote that the costs and disruption associated with rationalisation had weighed on earnings.
However, they said Smith Anderson had taken advantage of the upheaval to introduce improved practices which would pay dividends in future. "The group believes that its overall financial position has been stabilised and that a relatively strong platform to take the business forward has been established," they wrote.
The improvement may mean good news for members of the closed defined benefit pension schemes operated by Smith Anderson, in respect of which there was a total deficit of £6.3m at March 31, compared with £8.3m in March 2006.
The directors said the group had made "significant progress" towards agreeing a package to eliminate the shortfall with trustees.
"The net asset position has improved to close to £5m and excess cash funds are available to be committed to the funding of its closed defined benefit (pension) scheme deficits," they wrote.
Last December, managing director David Robertson indicated the group had thought liabilities in respect of former employees of the paper-making business may be covered by the Pension Protection Fund.
The group made a pre-tax profit of £2.6m in the latest year, after losing £7.2m in the preceding year.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article