SCOTMID has defied continuing structural change and rising costs in the retail market to hike annual profits by 11 per cent, but warned Brexit uncertainty was hitting trade in its Semichem health and beauty chain in Northern Ireland.

The Newbridge-based co-operative, which celebrates its 160th anniversary this year, reported a trading profit of £5.3 million for the year ended January 28.

Trading at its Scotmid convenience stores was boosted by Scotland’s hottest summer for 40 years, which the group said had helped offset rising business rates, wholesale energy prices and costs associated with the apprenticeship levy and auto-enrolment. It also cited the effects of ongoing Brexit uncertainty.

Turnover climbed by £4m to £378m, while the co-op also flagged the strength of its balance sheet. Scotmid said the value of its assets reached a record £103m, helped by factors such as the group’s trading performance, favourable property revaluations and gains on its investment portfolio.

Chief executive John Brodie said: “We are very pleased with the results against a background of a weak economy, structural changes in the retail marketplace, increased regulation and substantially increased costs that we have had to detail.

“In the background there has obviously been Brexit uncertainty, so to deliver a sizeable increase in trading profit in the Society is pleasing.”

Mr Brodie said Scotmid’s 177 convenience stores had taken advantage of consumers’ changing buying habits when temperatures soared last summer. This had helped the society overcome the difficulties caused earlier in the year, when the national Co-operative supply chain was affected by the Beast from the East.

Mr Brodie said: “When people changed their shopping patterns and enjoyed the best weather in 40 years, we were there to serve the communities we operate in. That boost certainly helped offset some of the negatives and the cost pressures we had been facing.”

Conditions were more challenging in the Society’s Semichem toiletries chain in Northern Ireland, however. Scotmid said in its report that it was a “particularly difficult year for our stores in Northern Ireland, where the impact of Brexit uncertainty was felt the most”.

The debate around Prime Minister Theresa May’s proposal for a so-called backstop - designed to ensure there is no return to a hard border between Northern Ireland and the Republic of Ireland after Brexit - has been one of most contentious parts of the the Brexit negotiation process. Sixteen of the chain’s 89 stores are in Northern Ireland, with the group traditionally enjoying a good level of trade from shoppers crossing from the other side of the Irish border.

Mr Brodie said the underlying performance of the stores was “marginally down on last year”, and noted: “Whilst there is uncertainty, that is not particularly helpful for their operation.

“We have seen a real difference in the level of trade in our Northern Ireland estate, compared to our Scottish estate. And it is happening at a time when there is structural changed in the retail marketplace, and that is particularly being seen on many high streets in Scotland.”

Elsewhere in Northern Ireland, Scotmid said trade at one of its busiest Semichem stores continues to be affected by the aftermath of a fire at a Primark store in Belfast city centre. Mr Brodie said access to the store continues to be affected.

Meanwhile, the co-operative reported a “mixed year” for its funeral business. Mr Brodie said the group was supportive of moves to appoint an inspector of funerals in Scotland as a means of raising standards. He also signalled his hopes that the competition regulator’s review of the market will lead to improved protection for consumers.