The reduction was expected by the City after a profits warning in December, and the group's shares closed 1.5p higher at 76.5p. As promised, Perkins has maintained its final dividend at 2.7p for a total of 4.45p (4.4p), despite a near-halving of earnings from 9.5p to 4.9p.
Operating profits dropped 8 per cent to pounds 21.9m despite a similar increase in sales to pounds 382.1m. Howard Phillips, chief executive, said: 'The supermarket price wars mean that business was not so easy, but we made some good customer gains.'
He attributed some of the profits decline to the European pizza business, where overcapacity led to a price war. That pushed profits at the frozen food business down by pounds 2m to pounds 13.6m.
'The markets are growing quite strongly, by about 15 per cent a year, so the outlook is promising,' he said. 'We manufacture a thin-base product, which is very much at the forefront of the market.'
He said the group had recently won new business in both France and Germany as well as a contract to supply chilled chicken for J Sainsbury and hamburgers for the Tesco Value line introduced by the supermarket last year.
Perkins put its mushroom business into a joint venture with a Dutch mushroom processor and has closed a number of businesses, including its frozen vegetable trading operations. That resulted in a pounds 3.9m exceptional charge, although Mr Phillips said that both these businesses had been loss-making.
Year-end borrowings, pounds 19.5m or 53 per cent of net assets, were up from 35 per cent. Mr Phillips said the level should decline this year.