Farmfoods has reported rising profits, making it a rarity in the food retailing sector as supermarkets labour to shield consumers from rampant inflation.

Headquartered in Cumbernauld, the frozen food specialist made a pre-tax profit of £22.2 million in 2022 on sales of £1 billion across its network of more than 300 stores and four distribution centres. That was up from a profit of £20.5m the previous year on sales of £941.6m.

Tesco, Asda, Sainsbury's and Morrisons have all reported hefty declines in profitability in recent months as they contend with the rising cost of goods, utilities and staff on one hand, while on the other attempting to keep prices down to retain customers.

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UK food and drink price inflation hit a 45-year record of 19.2 per cent in March, according to figures from the Office for National Statistics, and remained stubbornly high in April at 19.1%. Against this backdrop, investment to keep a lid on shop prices has also dented profits at Farmfoods' discounting rivals Aldi and Lidl.

Farmfoods employed an average of 4,767 people last year, down slightly from 4,839 the previous year. Last year's wage bill came in at £86.9m, up from £81.8m previously.

The company is majority-owned by Eric Herd, Farmfoods' publicity-shy managing director who inherited what began in 1955 as his father's Aberdeen meat processing business. According to a confirmation statement filed in August of last year, Mr Herd owns 380,000 ordinary shares, equivalent to about 69% of the equity.

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His son George is the next largest shareholder in Farmfoods with 100,000 shares, with a further 75,000 spread between three other family members.

Mr Herd has been paring back his stakeholding over the last few years. The latest accounts note that the company purchased 75,000 shares from the managing director for £6.375m, representing 11.9% of the issued share capital. Those shares were subsequently cancelled.

The compnay paid a total dividend of £7 per share in 2022, which amounted to £1.225m, up from £6 per share the previous year. 

Directors' remuneration rose to £2.74m, up from £2.05m previously. The salary of the highest-paid director was £600,000, an increase from £355,000 the year before.

"The group continued to trade profitably throughout 2022, despite increasing cost pressure throughout the business," the directors said.

"The group opened new retail stores whilst continuing to refurbish and develop existing sites within the group."