FAMILY-RUN businesses continued to make a significant contribution to the Scottish economy in the last financial year, with the combined profits of the 100 most profitable firms rising by 26 per cent compared with the previous year.

The collective amount of pre-tax profit generated by the 100 firms included in a report issued by membership organisation Family Business United Scotland increased from £902 million in 2017/18 to £1.14 billion in 2017/18.

Total revenues were also up, rising by 4% from £16.6bn to £17.2bn, while the number of people employed across the 100 firms rose by almost 9%, from 103,009 to 111,740.

According to Family Business United founder Paul Andrews the numbers underline how important family-run firms are not just for local communities but for the wider national economy too.

“Family firms are really the engine room of the Scottish economy and they provide jobs, revenues and support communities throughout Scotland,” he said.

“Their contribution in terms of wealth, incomes and job creation can easily be quantified but, in addition, the support that these businesses provide to the communities in which they operate should also not be underestimated either.”

A number of family-owned businesses, including Mitchells the Dairy in Inverurie, have gone out of business in recent years, with a combination of rising running costs coupled with increased business rates said to have contributed to their demise.

Following a backlash, the Scottish Government earlier this year slashed the rates bills of more than 4,000 firms, in the hospitality sector in particular, providing a total of £32m of relief.

Mr Andrews said that, given the contribution such businesses make, they should be able to access additional support to ensure their continued success.

“This report clearly quantifies the importance and diversity of a sector that deserves more support to ensure that these businesses continue for generations to come,” he said.

Despite the problems being faced by businesses in a range of sectors, the Family Business United report found that profits continued to rise at the majority of the 100 firms included.

The strongest four sectors were motor retail, food and drink, property and construction, and retail, which together accounted for 73% of total turnover and 69% of total profits.

While the majority of the firms included are located in the Central Belt, the entire country is represented in the list, with Dufftown-based drinks firm William Grant and Sons remaining the most profitable for the second year running after a 47% rise in pre-tax profits, from £177.2m to £260.2m.

Glasgow car dealership Arnold Clark Automobiles remained the largest business overall after posting a 9% rise in turnover to £3.7bn. The firm, which was established by its namesake in 1954, is also the biggest employer in the table after City Facilities Management, with its total employee headcount increasing from just under 10,000 last year to almost 11,000 this year.

There were 17 food and drinks businesses in the table, with Broxburn-based Ian Macleod Distillers, which produces brands including Glengoyne whisky and Edinburgh Gin, one example of a business that is reaping the benefit of the booming global demand for premium spirits.

The company, which was founded by managing director Leonard Russell’s father – also Leonard – in 1933, saw turnover increase by 22%, from £64.7m to £79.2m, in the last financial year while pre-tax profits were up by 32%, from £11.5m to £15.2m.

Mr Russell said: “We are very fortunate that there is continuing growing global demand for premium single malt Scotch whisky and our two single malts, Glengoyne and Tamdhu, have been growing as a result.

“The amazing growth in demand for genuinely premium craft gins has meant that Edinburgh Gin has experienced phenomenal growth here in the UK and we are now starting an export drive."