GLASGOW-based plant, tool and equipment hire company GAP Group has posted record annual profits and turnover, as it continues to invest heavily to achieve future growth.

Family-owned GAP Group, the fifth-biggest player in its sector in the UK, hiked its pre-tax profits by 38 per cent to £18.6 million in the year to March 31. This rise in profits was achieved on the back of a 21 per cent increase in turnover to £143.3m.

Chairman Danny O’Neil forecast that turnover would be “north of £160m” in the current financial year to next March.

However, he signalled that profits were likely to be flat, citing slightly softer market conditions.

Mr O’Neil said: “The market is a wee bit softer. The market is still okay. The pricing environment is probably tougher than it was this time last year.”

Joint managing director Douglas Anderson emphasised that the softer market conditions were not hampering GAP Group in its long-term growth plans, which have included the opening of depots in and around London.

Mr Anderson revealed that turnover since the start of April was up about another 12 per cent on the same period of the last financial year, while acknowledging this growth had been short of the company’s expectations.

He highlighted the impact on the market of an increase in supply arising from heavy investment in kit by medium-sized “regional” rivals around the UK. He noted these competitors were taking advantage of greater availability of bank and hire-purchase finance.

Mr Anderson, who put GAP Group’s UK market share at between three per cent and five per cent, said: “We are still well up in a period of zero inflation. We are still up 12 per cent on last year, but for us that is flat. Other people, they might be quite deliriously happy with that. We were expecting more.”

Mr O’Neil emphasised that GAP Group, which operates from around 120 sites in the UK, remained firmly in growth mode.

He noted that the company’s workforce had grown to 1,347 by March 31, from 1,102 a year earlier.

GAP Group’s employee numbers have since increased to 1,431. About 500 of the company’s employees are in Scotland, with around 160 at its Glasgow head office.

The business employs 89 apprentices. Its apprentice numbers have increased by 50 per cent over the last 18 months.

Mr O’Neil and Mr Anderson highlighted GAP Group’s aim of raising annual turnover to £250m and pre-tax profits to £25m by the year to March 2020.

The firm is investing heavily in large sites around the UK that hire out portable toilets and non-mechanical plant including temporary fencing, crowd-control barriers and road-crossing plates, as it continues to augment its traditional plant and tool-hire operations through diversification.

Mr Anderson, who runs GAP Group with brother Iain, noted these sites were each about the size of three football pitches.

He said GAP Group had opened around 10 of these sites over the last 12 months, with another four on the way.

GAP Group recently provided the pitch covering, along with fencing and crowd-control barriers and portable toilets, for the Foo Fighters concert at Murrayfield Stadium in Edinburgh.

It has also been investing heavily in tool and access equipment depots in and around London. Aluminium towers for people working at height are among the access equipment offered at these depots.

These depots have already been opened in five locations in and around London, including Wembley and Heathrow. Another five such depots are due to be opened soon, in locations including Dartford and Battersea.

Mr O’Neil said that GAP Group’s capital expenditure would approach £100m in the current financial year to next March. He noted that the company had, in the year to March 2015, made record capital expenditure of £86m.

GAP Group was founded by Douglas and Iain Anderson's father, Gordon Anderson, in 1969. The brothers have been running the business since 1988.