LOCH Fyne Oysters has narrowed its underlying losses and is said to be moving closer to profitability.

The business, based at Cairndow in Argyll, reported turnover of £15.5 million in its most recent annual accounts lodged at Companies House.

The UK, with revenue of £10.6m, was the biggest market followed by Europe at £2.87m, the Far East on £1.54m and the rest of the world coming in at almost £570,000.

While pre-tax losses for the 12 months to October 31, 2014, were £356,909 Loch Fyne said that included a near £154,000 inter-company loan being written off and a £152,000 loss from the Seasalter oyster seed business it owns a majority stake in.

Loch Fyne said after stripping out those sums the underlying pre-tax loss was just short of £42,000.

The loss for the previous 16-month reporting period, to October 31, 2013, had been almost £617,000 on turnover of £19.6m.

Campbell Shirlaw, executive chairman during the financial year, said: “We have trimmed costs here and there but it has not been wholesale slashing. It is a process to try and improve the performance and try to get into profit. In that year we are pretty much there.”

Mr Shirlaw paid tribute to award winning chef Roy Brett who has revamped the menu at the Loch Fyne oyster bar restaurant but is now concentrating on his own Ondine operation in Edinburgh.

Mr Shirlaw said: “We have definitely seen the reversing of the trend of declining sales and customers. The business had to be modernised. People go out to eat and expect different experiences these days.

“I’m really pleased with what Roy has been able to do taking quite a sophisticated product in seafood, which is generally expensive because of where it comes from, and get it into a package which people like.

“We were lucky to have him for the time we did.”

Mr Shirlaw said the bulk of investment needed since the business passed from employee ownership to the control of Scottish Seafood Investments more three years ago has been completed.

He also believes the company should once again be close to break even or profitability in the current financial year.

He said: “I don’t think there is any glaring need for additional investment. It is about management taking it on and doing the difficult job of running a business in the seafood sector.”

However Mr Shirlaw conceded the online shop set up by Loch Fyne has not yet met expectations.

He said: “I guess you could say we might benefit if we get it right in the future.”

The accounts note average staff numbers were 138 with overall employee costs at £3.3m.

Directors’ emoluments were close to £460,000 with the highest paid receiving £104,875.

Net debt at the end of the year was £4.9m, up from £3.2m.

The accounts note Loch Fyne has upped its stake in Morecambe-based Seasalter from 50 per cent to 60 per cent.

Mr Shirlaw said: “The oyster seed is really key and there is a bit of shortage of that worldwide. The strategy is good and it is a well run little business.

“We had an issue with growing seed for part of the year which had an impact but it is one of these things of being in aquaculture. Sometimes it doesn’t work the way you expect. It is still a good and really important part of the business.”

Along with that Mr Shirlaw said the quality of shellfish being produced from the Hebridean Mussels business on the Isle of Lewis has been good and Loch Fyne is increasing the volumes produced on the island.

Following the financial year end Loch Fyne issued five million new shares with the £500,000 raised settled through partial conversion of loans due to its parent company.

Loch Fyne also received a further £250,000 loan from its owner.

Mr Shirlaw added: “It was bolstering up the balance sheet but not in a panic. It was really just to give a reasonable amount of confidence and cover to everyone dealing with us.”

Cameron Brown is the current managing director at Loch Fyne.