Shetland Catch, the fish processor that is one of the biggest employers in the eponymous islands, returned to the black in the latest period, helped by strong demand and a financial restructuring which followed two years of losses.

Shetland Catch, the fish processor that is one of the biggest employers in the eponymous islands, returned to the black in the latest period, helped by strong demand and a financial restructuring which followed two years of losses.

Accounts for the company covering the year to March filed at Companies House show Shetland Catch overcame the challenges caused by fierce competition from Norwegian rivals by recording pre-tax profits of £489,246.

The result points to a dramatic turnaround in performance compared with the two previous years.

Shetland Catch, which specialises in processing oil pelagic fish such as herring and mackerel for export, made a pre-tax loss of £3.9m in the year to March 2007 and a loss of £4.2m in the year to March 2006.

In the latest period, Shetland increased turnover 18%, to £64.8m, helped by growing demand from markets such as Russia.

The company has benefited as growing numbers of fishing boats from countries like Ireland landed their fish for processing at its facility.

In their report, directors said margins on mackerel improved. The gross profit percentage achieved on sales increased to 19% from 13%.

The company responded to the threat posed by Norwegian rivals by recruiting one as an investor in order to shore up its capital base. Austevoll Seafood bought a 25% stake for £1.5m. With existing investors providing more funding, the company raised £2.7m in the exercise, which valued it at £6m.

The Lerwick Harbour Trust has 39%, the Shetland Fish Producers Association has 28%, while employees and directors have 8%.

The company refinanced its borrowings with DnB Nor on better terms. It also reduced overheads.

It is developing new products using species such as blue whiting.

Average employee numbers fell to 100 from 112 in the previous year.