Low interest rates and a buoyant housing market helped Fife-based James Donaldson & Sons Ltd record a 15% rise in annual operating profits.

The company, a processor, manufacturer and distributor of timber and engineered wood products, had an operating profit of £1.7m from a turnover of £37.5m in the year to March 31.Two-thirds of sales were generated in Scotland.

One of the most profitable parts of the business proved to be roof truss manufacturer Donaldson Timber Engineering, which has seen the opening of three new depots in England – Oxford, Andover and Ashford – over the past three years.

Gross profits increased by 1%, helped by a return to form of the Buckhaven factory in Scotland.

The group plans to further boost its profits by capitalising on the house-building boom in London and the south-east.

&#8220 Last year was fantastic for us, north and south of the border. And demand remained strong over the traditionally quieter summer period. ”

Neil Donaldson, chairman and chief executive.

Neil Donaldson, chairman and chief executive, said: “Last year was a fantastic year for us, north and south of the border. Although there is usually a quieter period in the industry over the summer period, the market held up well and the demand for the company’s products remained strong.”

Meanwhile, sawmiller James Jones & Sons Ltd, which operates seven mills, saw its pre-tax profits slide 41% in 2001 to £1.1m despite a 10% increase in turnover. The poor result is attributed to the performance of its Canadian associate.

The company expects to see a turnaround this year as the £7m Lockerbie sawmill goes into full production.