Buccleuch protects jobs and rents as loss deepens
Benny Higgins: strategy bodes well (pic: Terry Murden)
MDS Estates, parent group of property company Buccleuch, has posted a deeper operational loss of £5 million from £160,000 in the previous year, though it was able to protect jobs and tenant rents and remains confident for the future.
Turnover for the year to the end of October 2020 fell to £48.7m from £66.3m in 2019, while asset value increase and the debt was reduced to £79m from £87.4m.
Benny Higgins, executive chairman of Buccleuch, said that like all businesses, Buccleuch’s performance had to be viewed “through the prism of the global pandemic; with each area of our diverse business being impacted in differing ways.”
He added: “Throughout the period, our overall business performance showed strength and stability and our business strategy bodes well for the future.
“While we incurred an operational loss of £5m, rural jobs were protected and we worked constructively with residential and commercial property tenants to aid them through the uncertainties presented by the pandemic.
“Our financial statements record an overall profit for the year of £64m. This does not arise from operational activities, but primarily reflects an accounting requirement to revalue our investment property assets on an annual basis.
“A change in the valuation methodology resulted in a substantial asset value uplift.
“We are also pleased to report significant debt reduction and continued investment in projects across our rural estates.
“Our colleagues within much of the rural sector were able to continue working throughout the period, in line with all relevant government guidelines, and our forestry and farming enterprises benefited from buoyant markets.
“We will, however, maintain a keen eye on these markets as we move through 2021 and anticipate there will be an eventual impact as a result of Brexit and changing legislation.”
Other enterprises, such as commercial property and tourism and hospitality, saw a direct impact of the pandemic.
In the case of commercial property, the company agreed rental terms with tenants to aid them through the uncertainty and there was a downturn in overall receipts.
At Restoration Yard in Dalkeith Country Park, which includes a significant retail and hospitality business, trading was either non-existent or heavily impacted by the pandemic, and the closure of retail and hospitality for long periods.
“The environment continues to take a central role within many of the projects Buccleuch have undertaken and we will continue to talk to developers in relation to potential projects, from solar and wind, to energy storage, across our estates,” said Mr Higgins.
“Buccleuch is an ever-evolving business and cognisant of the impact our land use decisions have on our customers, communities, and the environment.
“Our land use strategy will allow us to evaluate each area of the estates in terms of our key activities and commercial strategy, while also keeping our values at the fore of our thinking.
“Together with our more traditional business areas: agriculture, forestry, and commercial property, 2021 will see an increased focus on the commercial opportunities around hospitality and leisure on the estates.
“Our recently launched self-catering accommodation has recognised success in booking figures and we will look to build on this and introduce new attractions to our destinations.”