A Scottish timber giant has highlighted the challenges posed by the fall in the pound since the Brexit vote amid competition for supplies.

Scott Timber said the weakness of the pound has created serious complications for firms operating in what is a global market.

The comments in the latest accounts for the business filed at Companies House underline the importance of trading arrangements for Scottish firms operating in overseas markets as the Brexit negotiations enter a crucial phase.

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Fife-based Scott Timber describes itself as a major buyer of timbers used in the production of pallets for shipping goods and in packaging.

“Timber supply challenges and continually rising prices have continued to be the trend in to 2018,” wrote directors in Scott Timber’s 2017 accounts.

They said global demand for timber fibre for a multitude of applications is putting pressure on availability and driving prices up, adding: “The position is exacerbated by the fact that the UK market is heavily reliant on imported timber to meet requirements and the enduring weakness of Sterling.”

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The directors gave no indication in the accounts of what they expected the impact of Brexit would be.

A no deal Brexit or any settlement that resulted in tariffs being placed on supplies from Europe or other barriers being erected could add costs and create logistical complications for any firms that import goods. Exports could become less competitive.

In the latest accounts for BSW Timber the Borders-based giant said Brexit would have an impact “as yet unknown”.

However, the directors of Scott Timber said the outlook for the firm is very positive. The company is investing in maintaining and safeguarding timber supply while promoting bespoke and innovative pallet repair and re-use initiatives.

They said the company had a strong year in 2017, during which sales increased around 13 per cent to £87.4 million from £77.6m. Pre-tax profits rose 17%, to £5.4m from £4.6m.

“This is considered a very acceptable result given the challenges and steeply rising prices in the timber supply market,” said directors.

The parent Scott Group investments grew turnover to £148.7m from £128.3m helped by the purchase of Aberdeenshire-based sawmiller Pallet Logistics and of Whirlowdale Trading. Profits rose to £6.2m from £5.2m.

Directors of the family-owned group said the deals helped to expand its geographic coverage.

The acquisition of Rotherham-based Whirlowdale in particular further enhanced the group’s pallet recovery and re-use offering to customers.

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The directors said issues around availability and rising prices continue to challenge the new pallet manufacture and reconditioning sides of the business.

However, they said: “The business is able to rely on strong supply arrangements in the home market and in the Baltics to support the business as it continues to grow and develop.”

Group operations director Norman Scott said yesterday: “Turnover has continued to grow year on year, with profit keeping pace. Our most recent acquisitions … have bedded in well and are performing as we hoped.”

The group has a strong balance sheet, with net assets of £15.8m at the year end. It said it remains well positioned to finance future trading, growth and acquisitions.

Scott Group investments paid £4m dividends in each of the last two financial years.

On its website the group notes it was started in 1987 when James and Chris Scott bought a house in Gargunnock, Stirlingshire with a wood mill on its grounds.

The company grew rapidly through acquisitions.

The average number of employees at the group increased to 1,214 in the latest year from 997 following the acquisitions.

The group also owns Scott Direct, which supplies goods such as workwear manufactured in Scotland, equipment and tools.