The financial impact of the Covid pandemic led the board of James Hutton Limited (JHL) to consider “extreme scenarios” during the year to March 31 2021.
While the company’s accounts reveal turnover of £3,412 million in 2020-21 was similar to 2019-20 (£3.478 milion) and JHL achieved an operating profit of £19,000 compared to a loss of £290,000 in 2019-20, the directors’ report states that this “satisfactory” result was only possible thanks to cost control.
JHL translates the scientific research of the James Hutton Institute, with sites in Aberdeen and Dundee, into commercial services, licences and products for agricultural and environmental sectors and also in exploration and production for the oil and gas sector.
The report states: “The board convened virtually on a frequent basis to review and reassess the potential impact on Covid on expectations around income generation and costs including examining a number of more extreme scenarios in order to confirm the degree of robustness of the company’s financial position.
“Our ability to continue normal operations was particularly constrained during the first quarter when Scotland and the wider UK were subject to the strictest lockdown measures across society.”
JHL’s plant breeding and licencing divisions were the areas least affected by the pandemic’s disruption as demand from growers continued at budgeted levels. However, research and consultancy were more affected and analytical services suffered the most impact as the level of customer activity decreased “very significantly”.
“Some of our services had to be closed completely during the first quarter,” the report adds.
“Demand failed to pick up consistently through to the year end and income was therefore nearly £460,000 below budgeted levels.”
The report warns that key markets such as oil and gas , and plant contact research for the private sector will continue to be challenging.
Looking ahead, the directors report that JHL is anticipating growth opportunities from the development of the International Barley Hub and Advanced Plant Growth Centre which are being constructed thanks to a £62 m Tay City Deal investment.
“JHL is closely involved in business planning around this development to identify the scientific and commercial opportunities and help maximise the economic benefits the deal will bring to the Hutton and the wider area.
“The opportunities for growth in JHL’s activities are significant.”