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GREIG CAMERON Deputy Business editor
The Thornhill, Dumfriesshire, business said it saw record sales in March 2012 before the damp spring and summer affected performance.
Turnover declined from £47.5 million to £44.1m in the year to September 30, 2012, as pre-tax profit fell from £4.6m to £3.4m.
In accounts filed at Companies House the directors said: "The financial year ending September 2012 was extremely challenging for both Klondyke and the garden centre industry as a whole due to abnormally high levels of rainfall during the key spring and summer trading months.
"In the main gardening season the business relies on customers being able to venture outdoors into their gardens. Despite excellent gardening conditions in the month of March, when we achieved record sales, the month of April was the wettest on record with more than double the normal average rainfall for the month. After a disappointing May, persistent poor weather in the months of June, July and August contributed to the wettest summer in 100 years.
"As a consequence, sales of all garden-related products including garden furniture and barbecues were well down on the previous year."
In the year, Klondyke improved its gross margin by 1.1% to 49.7% which was attributed to tight stock control, a reduced level of plant write-offs and better performance across the coffee shops and at Christmas.
The company sold its Wellington Hill site in Leeds plus the Lambton Park centre at Chester-le-Street, County Durham, with a £1.3m profit as a result of the disposals.
In January 2012, Klondyke bought the lease for the Beverley Garden Centre in Yorkshire .
As part of a refurbishment plan Klondyke overhauled and extended its centre in High Legh, Cheshire, plus revamped its Inverness site.
Additional coffee and eating facilities were added at Astbury Meadow in Cheshire and at Carlisle.
Average staff numbers were down from 854 to 844 although employee costs rose from £11.9m to £12.1m.
Directors' remuneration including pension payments rose from £451,783 to £672,941 with the top paid seeing a rise from £149,000 to £203,415.
Financing charges grew sharply from £887.877 to £1.45m with net debt falling from £37.4m to £37.3m.
The Wilmslow centre was destroyed by fire in mid-2011 but re-opened in October last year with sales "far ahead of expectations".
The directors are hopeful the business will continue to remain profitable and indicated further acquisitions may be on the cards.
Klondkye was formed in Kirkintilloch in the 1980s by Bob and Dorothy Gault. Mr Gault died in February 2011 and his wife is now the owner.
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