The impact of last summer's foot-and-mouth outbreak is continuing to be felt by the livestock sector, as auctioneer John Swan yesterday posted a pre-tax loss of £72,605 for the year.

The Alternative Investment Market-listed company also warned of the potential impact of falling land prices on the redevelopment of its site at St Boswells, Roxburghshire.

The Borders and Northumberland company posted a £111,589 profit in 2007 but gave a positive vision of the future after recording a "strong recovery" in the second half of the year to April 30, 2008, as livestock prices rose.

George Neill, chairman of John Swan, told investors that last year's foot-and-mouth outbreak, which was linked to an animal health labora- tory at Pirbirght, Surrey, and its associated restrictions had a "severe impact" on the industry in general and the sheep sector in particular.

However, he said: "The increase in livestock values has obviously had a beneficial effect on our income and the strength of sterling will be a major factor in maintaining these values."

He added: "The position is unclear regarding arrangements for the autumn, with bluetongue restrictions constantly changing."

Since the year-end, the company has established a furniture and antique business which is trading out of premises in Jedburgh.

It said its fine art business continues to be successful.

The company is also seeking to redevelop its St Boswells site, seeking permission to redevelop the existing site for residential use and build a rural business centre.

The company warned: "Whilst this work will con-tinue, the economic background has undoubtedly affected land values and this may impinge on both the rate and degree of progress."

The company declared a final dividend of 15p to be paid on August 28, bringing the total for the year to 30p.