A fast-expanding nursing business, owned by one of Scotland's leading female entrepreneurs, has suffered after the NHS cut back on its use of agency nurses.

Founder of ScotNursing  Ann Rushforth said her Dunbartonshire-based business said the market had shrunk recently because the NHS was doing more and more in-house but she added that the situation had now stabilised and her business was operating profitably.

Nonetheless, ScotNursing, which remains the biggest player in Scotland's private nursing sector, posted a loss of £49,230 for the year to the end of March 2007, compared with a pre-tax profit of £125,500 the year before.

She said:  "But, at the same time, the domiciliary care side of the business is growing extremely fast, as is our occupational health business. We now provide health MOTs, dare I say it, the way BUPA does for company employees. This is beneficial to companies and the workers.

In 2006, ScotNursing was sold to Health and Lifecare Options for £620,000, an operation also owned by the entrepreneur, and has since become her ultimate parent company.

Turnover at ScotNursing, which last November secured for the third time the Scottish Prisons Service contract, fell to £10.6m, compared with £10.8m the previous year.