An increase in timber prices and the depreciation of the pound in the wake of the Brexit vote have affected profits at Selkirk-based Oregon Timber Frame Limited.

For the year to the end of December 2017 the firm actually saw revenues increase 10% from £21.7 million to £23.7m, but after its cost of sales figure rose by 11% to £19.5m, pre-tax profits fell by 5% to £1.8m.

Writing in Oregon’s accounts, which were filed at Companies House this week, chairman Rod Lawson said: “Gross and net margins continue to be affected both by the depreciation of the pound as a result of the EU referendum vote and increased demand for raw materials.

“Material costs have been rising and it is expected that margins in the current year could be lower than last year.”

Established in 1998, Oregon specialises in the design, manufacture and erection of structural timber frame packages to volume house builders and developers.

Earlier this year the firm’s management team completed a buy-out of its non-management shareholders, including the 15% stake in the business held by its largest external shareholder group, Archangel Investors.

Oregon said that timber prices rose by around 20% during 2017, in part because more and more firms are following its lead by using timber as a primary construction material, leading to a scarcity of supply.

While much of its focus is on the Scottish market, Mr Lawson said the business aims to increase the amount of work it does south of the Border.

“In view of the large potential housing market in England efforts are being made to diversify geographically and service clients in that market,” he said.