Crieff Hydro expects to hit a record £18 million turnover this year and continue a profit recovery, its fifth generation leader Steven Leckie said yesterday.

He said John Jennett, the business's first non-family managing director when he was appointed last year, had brought "a new approach and new methods" that had quickly bolstered the 145-year-old business in challenging times.

Writing in the annual report and accounts just lodged at Companies House, Mr Leckie said: "We are convinced his appointment secured this year's result and avoided one significantly worse."

The group saw turnover shrink by 1.6% last year to £16.9m, but operating profit rose by almost 10% to just over £1m, not far shy of its 2009 level.

The accounts show average staff numbers fell sharply over the year, from 420 to 374, a drop of more than 11%, and Mr Leckie admitted this had helped to power the result following Mr Jennett's arrival.

"Our customer ratings have gone up, it is about efficiencies and having the right staff in the right places," he said.

The jobs to have gone included 37 hotel and ancillary workers, eight administrative staff and one director.

"We watch the world go by and see every other company dropping their revenues and profits massively and we ask what if it happens to us?

"Considering that VAT went up last year we did pretty well but we are bracing ourselves and it is all about re-investment. If it is going on wages it can't be spent elsewhere."

Crieff Hydro's pre-tax profit was steady at £605,000, despite a 25% rise in its financing costs to £408,000, and an unchanged dividend costing it £299,000.

The company managed to reduce its debt significantly during the year, from £10.1m to £8.85, while shareholder funds dropped by around £500,000 to £13.2m.

The highest-paid director, assumed to be Mr Leckie, received £184,848, up from £166,306.

Almost 10% of the workforce participate in a long-term incentive scheme, funded by an employee benefit trust, for which the liabilities rose sharply from £426,000 to £835,000.

The hotel's key performance indicators were all under pressure, with occupancy falling by 1.5%, average daily room rate by 0.2%, accommodation yield by 1.8%, and total revenue per available room by 2.1%.

Mr Leckie, chairman of the Scottish Tourist Alliance and the Government's tourism leadership group, expressed frustration at the planning delays to the group's proposed £100m development of a care home, shops, and holiday eco-village near its Perthshire site.

He said: "We have not yet submitted planning because of various analyses we have to do – there is evidence of a badger on the site so we have to have a badger study, which takes another few weeks, and so it goes on."

Mr Leckie, also president of Perthshire Chamber of Commerce and chairman of Crieff Community Council, said the family-owned business was very comfortable with its ability to fund the development.

"We are [like] a single island in a big ocean – our independence is important to us, and it means we can invest."