WALLACES Express has cited rising operating costs as profits dropped by 11.4 per cent in its final year of accounts before being acquired outright by Tennent Caledonian Breweries.

The Irvine-based drinks wholesaler became wholly owned by C&C Group, parent group of TCB, in March, a year after the Dublin-based company acquired a 50 per cent stake in the business.

In accounts newly-available at Companies House, the company lodged pre-tax profits of £2.1 million in the year to March 31, down from £2.4 million in 2013.

The fall in profits came as turnover at the firm jumped to £91.7 million, up from £82.6 million the year before.

The directors said: "The results for the year are satisfactory considering the economic climate.

"With prudent management and purchasing policies the company has managed to increase the gross profit percentage to 17.83 per cent.

"Turnover has increased. Operating costs have increased and therefore resulted in a decline in profit."

The directors warned the risk of customer insolvency has increased because of the economic climate, and noted greater focus is being placed on credit control to mitigate the risk.

The accounts show Wallaces employed 291 staff in its latest financial year, up from 286, with cost of wages and salaries edged up to £5.88 million from £5.7 million, while the remuneration of the highest paid director narrowed to £220,356 from £228,465.

Long-standing Wallaces' boss Brian Calder succeeded John Gilligan as boss of TCB this month.