THE owner of the Letts Diaries and Filofax brands has reported a £2.2 million profit in its first trading year.

Accounts recently lodged at Companies House show HSGP Investments recorded a £34.3m turnover from its ongoing operations with an additional £10m from discontinued parts of the business in the 12 months to April 30, 2014.

In spite of stock shortages of Filofaxes and production delays at the Dalkeith factory, which were said to have been caused by tight working capital prior to the takeover of Letts and Filofax parent FLB Group by HSGP in April 2013, directors indicated they were extremely encouraged by the profitable performance in the period.

The accounts note a major restructuring of the business which has seen subsidiaries in France, Norway, Sweden, Canada and the United States close down to be replaced by agreements with distribution companies.

HSGP said it expected to save around £6m as a result of the reorganisation of its international operations.

In the UK headcount has reduced by 85 since 2012 to stand at 287. Across the wider group the numbers have fallen from 488 to 321.

Exceptional costs of more than £1.7m related to the restructuring were booked in the period.

The accounts state this programme has been "effective in resizing and stabilising the business to a lower cost operating model".

According to Gordon Presly, chief executive, the overseas restructuring is pretty much done and the process in the UK is moving closer to completion as part of a strategy to trim total costs by around 30 per cent.

He said: "We now have some financial breathing space back in the business which has enabled us to invest again in new product development and capital expenditure on equipment, IT and web related projects which are key to our future business development. This will help us to put the business back on a growth platform."

The new products include iPad holders with a Filofax organiser or notepads.

Mr Presly said trading in the current financial year has been encouraging and ahead of plan in profit and cash terms so far.

HSGP is owned by US entrepreneur Harolde Savoy, whose family also owns the Blueline and Rediform Group stationery businesses, and Mr Presly.

At the time of the takeover it also assumed £15.7m of loans which FLB owed to the bank.

Mr Presly was appointed chief executive of Letts diaries business in 1998. He became head of Filofax when it was bought by Letts in 2001.

In 2006 Mr Presly led a management buyout of the group which was backed by Phoenix Equity Partners.