Scotbeef, a major supplier of Aberdeen-Angus-branded products and lamb to supermarkets, has reported a fall in pre-tax profits in its last financial year to £1.34m, despite a 5.2% increase in turnover to £119m.

Scotbeef, a major supplier of Aberdeen-Angus-branded products and lamb to supermarkets, has reported a fall in pre-tax profits in its last financial year to £1.34m, despite a 5.2% increase in turnover to £119m.

In accounts filed with Companies House for the 52 weeks to February 23, 2008, Scotbeef directors described the firm's performance as "satisfactory", but warned that trading conditions remain highly competitive.

The firm blamed restrictions placed on export sales because of the outbreak of foot-and-mouth disease in Surrey in 2007, and a significant increase in the cost of livestsock, for a fall in profits during the last quarter of the year.

Gross profit for the year, however, increased to £10.27m from £9.98m for the previous period.

"Livestock is the single biggest item for the company," Scotbeef said. "If the market was to tighten further, this would put more pressure on margins. To mitigate this, the company continues to maintain strong relationships with its existing suppliers and looks to develop new supplier relationships."

Scotbeef emphasised the importance of export markets, particularly those in the European Union. France and Germany are key markets for Scottish beef and lamb.

Scotbeef's sales in the EU for the year fell to £13.77m from £14.3m because of restrictions on exports.

The company has invested £17m in the purpose-built storage and packing facility at Queenslie, Glasgow. This enabled it to transfer operations from Polmadie and Inverkeithing in 2007 and sell its site at Strathaven.

Scotbeef's payroll for the year remained stable at £13.5m, up marginally from £13.2m previously. Staff numbers dropped to 471 from 491.

The highest-paid director, assumed to be chairman Ian Galloway, saw his total remuneration rise to £553,000 from £222,000.

The directors recom- mended that no dividend be paid for the year.