H&H Group chief executive Brian Richardson says the business is well placed to benefit from synergies created by the takeover of Scottish rival John Swan.

Carlisle-based H&H completed the takeover this week, creating the UK’s largest livestock marts business.

John Swan operates marts at Newtown St Boswells in the Borders, and Wooler in Northumberland, while H&H has seven including the Borderway Mart in Carlisle.

The two have been in talks for three years, and the deal has taken 10 months to complete since H&H tabled an £8.2m bid for the Aim-listed company last December.

Its cash offer of £13.50 for each John Swan share – or the option of H&H shares in lieu of cash – was double the share price prior to the bid, raising eyebrows in some quarters.

But Mr Richardson believes the synergies between the two businesses justify the outlay.

He said: “We have a good reputation for making sound investments and growing the business. We have a track record of buying at the right price.

“We looked at the assets in the business, the value to us of that business and the underlying value of the property assets, and agreed the price.

“We are comfortable with that price and, over time, it will represent good value for H&H shareholders.”

He added: “John Swan deal with 10,000 farmers every year. That’s very valuable to us, and represents a new market for our land agency and insurance businesses.”

H&H is planning to invest in its new marts, particularly at Newtown St Boswells where John Swan had been reluctant to spend while it considered a possible relocation.

Mr Richardson said: “Our view is that the mart will be on the site it is on now for the foreseeable future, and we will be bringing forward investment.”

It plans to replicate the model at Rosehill, Carlisle, where the mart is surrounded by complementary agri-businesses.

John Swan also owns land and property in Edinburgh, which H&H will seek to develop.

The announcement of the takeover came as H&H Group reported profits of £1.16 million before tax for the year to June, down from £1.3m in 2013-14.

Turnover also fell, from £14.4m to £13.5m, although this was in part due to the sale of its vehicle finance business to the Cumberland Building Society in 2014.

Mr Richardson described the figures as “a solid result” given difficult market conditions.

He said: “Two-thirds of our business is rural farming business. Farming incomes have come under pressure in the last 12 months and that has impacted on us.”

Livestock throughput was £120m, similar to the previous year even though prices were lower.

Mr Richardson added: “Our land agency continues to develop and grow. Our estate agency had a slow start but activity has been much higher in 2015, with the number of houses sold increasing dramatically, although we continue to see little if any inflation in the Cumbrian housing market.

“H&H Insurance Brokers continued to develop market share and the print business, H&H Reeds Printers, has continued to focus on cost efficiency.”

Borrowings fell from £12.2m to £6.5m, largely due to the sale of the capital-hungry vehicle finance business. However, since the year end, H&H has taken on £8m of additional borrowing from Clydesdale Bank to fund the John Swan acquisition.

H&H’s annual general meeting is at the Shepherds’ Inn, Rosehill, on November 6, when shareholders will be asked to approve a final dividend of 27p. This takes the total dividend for the year to 35p, unchanged on 2013-14.