Swale Heating continued to grow sales and profits as its owner carried out a drastic reorganisation of the business, putting its property interests into a new company.

The central heating firm is now entirely separate from the real estate portfolio of its founder and chairman Ian Pierson, 65, who launched the firm in 1972 at the age of 22.

The Sittingbourne-based company had owned property developments worth £11.9 million as well as servicing, installing and maintaining boilers and insulation in private homes and affordable housing across the country.

However, in June last year these assets were transferred to a new company, Pierson Properties Limited, also owned by Mr Pierson, leaving Swale Heating with purely its central heating business.

Managing director David Mathieson, who joined the firm in October, said: “It was a decision taken before I came on board but a decision I would have pushed for.

“It is about cleaning the business up. Like many owner-traders, Ian had done other things and kept the business within one company for simplicity.

“We have taken all the other interests out of Swale Heating and only working on the services customers know us for.”

Mr Mathieson insisted there are no plans for Mr Pierson to exit the business, which employs about 470 people, following the reorganisation.

He said: “I wouldn’t have joined if he was about to leave as the first person in the firing line if a business is sold is the managing director.

“There are no active or passive sale plans.”

Sales of purely the central heating business grew by 7.3% to £45.7m in the year to the end of March 2015, up from £42.6m in 2014, according to latest accounts filed at Companies House.

Gross profit increased to £6.8m, up from £5.9m, giving it a margin of 15%, up from 13.8%.

Pre-tax profits on this reached £71,000, down from £457,000 a year earlier, although this also included the property development business.

The transfer of assets to Pierson Properties, worth £11.9m, reduced the worth of Swale Heating’s net assets from £18.2m to £6.4m.

“I wouldn’t have joined if he was about to leave as the first person in the firing line if a business is sold is the managing director..." - David Mathieson on Swale Heating founder Ian Pierson

Bosses carried out a full review of operational activities to identify any loss-making contracts within the affordable housing sector.

The company also completed a review of its IT systems, with changes due to be complete in March.

Mr Mathieson said: “Our results are a classic end-of-the-recession story. Overall sales are up but our margins are tight.

“Like many businesses in the recession we under invested in technology and last year we started to put that right. Our new management planning system will make us more efficient and give us more control.

“We expect the numbers this year to be positive but not fantastic because the system is still being installed. Next year we are expecting a significant upshift as we introduce new technology.”

Pierson Properties had a turnover of £6.9m from its launch in June 2014 to the end of March 2015.

Its operating profit was £356,000. When its £11.9m contribution from Swale Heating is taken into account, the firm made a pre-tax profit of £12.3m.