Profits up in annual health check

bank notes Image copyright AFP
Image caption The annual Top 500 analysis indicated the biggest Scottish-based firms saw profits rise sharply

To understand the strength of Scotland's corporates, it's ironic that you have to exclude the two big banks.

Their presence, swinging wildly between huge profits and record losses in recent years, massively skews the figures in the latest analysis of Scotland's private sector.

Yet the role of Royal Bank of Scotland and of Lloyds Banking Group - of course including Halifax Bank of Scotland - runs right through the private sector, and particularly so through the downturn and its credit crunch.

Without them, the annual Business Insider Top 500 analysis indicates last year's company reports showed a sharp rise in profits during the previous financial year.

In total, the 500 biggest Scottish-based companies saw profits up by 39%, from £9.67bn to £13.34bn.

But that was on hardly any change in turnover, rising from £202.1bn to £202.5bn.

Shedding staff

The business magazine follows the employment patterns of these companies, and noted that - apart from the huge job losses from the banks - it was Edinburgh-based Johnston Press, publisher of The Scotsman, that had the unhappy position of biggest shedder of staff, followed by Aegon, the UK subsidiary of the Dutch pensions giant.

By sector, it was retail that did best in putting on jobs as well as turnover, with distribution, wholesale and the drinks industry not far behind, while property and construction fared worst in turnover, and textiles did worst in jobs - down 27% in only one year.

Stagecoach transport group, headquartered in Perth, was the company that put on the largest number of employees - at nearly 1,900 - while the Scottish branch of telecoms and broadcaster firm Sky added 1,350 in its contact centres.

At a time of uncertainty and instability, the Business Insider annual ranking, based on a formula of turnover, profit and employee numbers, features stability. SSE remains on top, and Standard Life stays second.

Total Upstream - the Aberdeen subsidiary of the French energy giant - retains its third position, while Scottish Widows, an LBG branch, moves up from seven to four.

Weir Group is the only company to move into the top ten of Scotland's corporates, as others - Suncor Energy, Sky, Chevron, John Wood and Stagecoach - swap places.

Oil risers

The upward drift of the presence of companies in the oil and gas sector, often subsidiaries of foreign giants, is a reminder of that sector's strength through the downturn, even though the oil price was particularly volatile through the period covered by company results issued during 2011.

One of the fastest risers in the corporate charts, for instance, was Taqa Bratani - owned in Abu Dhabi - which rose 270 places to rank number 17.

Of course, the survey only shows one part of the Scottish economy, reflecting those with corporate entities based in Scotland. There's much of the economy that's not covered.

But if there's one lesson that's clear and very topical coming through from the annual survey, it's the extraordinarily high level of integration of Scotland's private sector with its neighbour south of the border.