The firm which helps to invest the fortunes of the former owners of the Edinburgh Woollen Mill stores business suffered a dip in earnings in the latest year as the flow of profitable disposals slowed. However, Ashleybank Investments still managed to increase the net worth of the controlling Stevenson family by around £1m after tax.

Accounts for Ashleybank filed at Companies House show that pre-tax profits slipped to £1,486,271 in the year to January 2007, from £4,712,844 in the preceding year.

The setback largely reflected a sharp reduction in the profits that Ashleybank made from selling off parts of the portfolio of investments which it has amassed.

These range from venture capital investments in emerging companies to holdings in property and hedge funds.

In the year to January 2006, Ashleybank made a surplus on disposal of fixed assets, including holdings in associate companies, of £3,840,838.

In the latest period the surplus on disposals shrank to just £1401.

In their report to the accounts, dated November 26, directors wrote that the latest year contained no successful exits from Ashleybank's private equity investments.

"The year was disappointing in that three company failures occurred with significant losses," they wrote.

The firms concerned were Murray Allan Cashmere, the Borders knitwear firm, and two retail firms in the Lake District.

New investments included Pagazzi, the Glasgow-based lighting retailer.

By contrast, Ashleybank's property portfolio, which includes a significant weighting in retail investments, did well.

"In general, the group takes the view that property valuation is at the top of the cycle," directors wrote.

A holding in Dobbies Garden Centres, in which Tesco bought a controlling stake earlier this year, performed well. It was sold after the year-end for an undisclosed profit.

Directors said Ashleybank significantly increased its exposure to hedge funds, from £1.7m to £4.6m at cost. Performance of the investments had been satisfactory.

However, Ashleybank maintained substantial cash deposits, helping to "hedge against a high-risk end of investment strategy".

After receiving £1,080,791 net interest, Ashleybank made a post-tax profit of £993,979, down from £4,247,779.

It paid £825,000 dividends. Net assets increased from £41,766,915 to £41,912,494.

That figure includes £466,000 worth of racehorses owned by Ashleybank, which sponsors racing.

David Stevenson, a former Olympic pole-vaulter, built up Edinburgh Woollen Mill in the 1980s with his brother Neil.

In 1996, the Stevensons netted around £33m when Grampian Holdings bought the firm for £69m.