STRATHMORE Foods has seen profits more than halve due to rising ingredient costs.

The Forfar business saw turnover rise 3% from £11.3 million to £11.6m in the 12 months to June 30, 2011, despite cutting back on products with poor margins.

The rise in sales was helped by the McIntosh ready meal and pie brand growing its market share.

However pre-tax profits fell from £505,193 to £232,037 according to accounts filed at Companies House.

In notes to the accounts, the directors said: "The benefit of higher sales was offset by large increases in commodity prices, which caused the price of many of raw material inputs to increase greatly within very short timescales.

"These increases led to pressure on the company's margins as customers were reluctant to agree to price increases, at least in the short term."

It said regulatory and general cost pressures continued to present considerable challenges but it was well placed to meet them.

Staff numbers at the business, which sells products to supermarkets, increased from 142 to 152.