Lord Haughey’s City Refrigeration business has seen its profits drop in its most recent financial year as it felt the impact of the supermarket price war and tough retail trading environment.

Accounts recently filed at Companies House by City Refrigeration Holdings (UK), which provides a range of facilities management, cleaning, refrigeration and air conditioning services, show turnover dropped from £458.5m to £455.6m in 2014.

Pre-tax profit fell from £11.4m to £7.5m but the prior year had included a one-off £2m gain relating to the sale of some intellectual property rights.

Operating profits were down from £9m to £7m.

Writing in the accounts the director said the company’s facilities management had been affected by the tough retail market in the UK and overseas.

The company said its non-UK operations, which are in Australia, had also suffered as a result of exchange rate fluctuations.

Colin Seggie, managing director, said: “In reality it has been a challenging year for us across most of our markets, geographically and sector wise.

“We are in a number of partnerships and work with a number of businesses across retail so in that scenario we are sharing the cost challenges of the market.”

The accounts show UK turnover grew from £337.5m to £352.5m while in the rest of the world it dipped from £121.1m to £103.1m.

Facilities management and cleaning services revenue dropped from £377.3m to £354.2m but that was partially offset by an increase from the project services division, which includes construction and equipment installation, as it grew from £81.2m to £101.5m.

An ordinary dividend of £6m was paid in the year, down from £8m.

Strong cash flow helped the business increase its net funds from £3.6m to £19.2m.

Directors’ remuneration was up from £1.7m to £1.9m although the highest paid saw their pay remain steady at £550,000.

Average staff numbers were down from 12,294 to 12,258. The business employs more than 450 at its headquarters in Glasgow.

The accounts note no political donations were made in the year but contributions to charities was increased by £600,000 to £900,000.

The directors said they believed prospect for 2015 were strong across “all existing customers” and investments made in 2014 would start to bear fruit.

Mr Seggie said: “We do see opportunities both in the UK and overseas which we would hope to come through from our existing customer base and potential new customers.”

He added the business continues to look at expanding into other countries and said: “We are actively looking at a couple of potential overseas market but none of them are at an advanced enough stage to share them just now.”

Willie Haughey formed City Refrigeration in 1985 with his wife Susan and the business initially installed and serviced cellar cooling systems for the licensed trade. He was knighted in 2012 and then ennobled as Baron Haughey in 2013.

Customers of City Refrigeration include the likes of Asda, Booker and BP in the UK and the Coles supermarket in Australia.