STRATHMORE Foods has seen pre-tax profits rocket by 74 per cent to £2 million as the Forfar business improved cost management in a year of what it called “relatively stable commodity prices”, but directors warned that Brexit would present a “significant challenge”.

The firm, which makes the McIntosh range of ready meals, saw revenue up 4.7 per cent to £12.5m for the year to June 30 2016.

Writing in newly filed accounts at Companies House the directors said this represented a 2.3 per cent uplift in average weekly sales.

“This was achieved despite both deflationary price pressures which continued to exist during the year and the pricing policies that were pursued by our customers as they fought for market share,” wrote the directors.

They also noted the “pleasing” growth of the McIntosh brand, and an increase in sales of its frozen foods range.

In spite of an increase in capital investment of more than £670,000, the company’s net assets increased to £6.1m.

While noting confidence in the business, the directors said that the June 23 vote to leave the European Union, in particular the impact on sterling would lead to substantial commodity and other price increases, which “when coupled with supply-led increases and inflationary pressures… will present significant challenges to the business”.