The result, achieved on an 8 per cent boost in group turnover to pounds 240m, reflected a recovery in profit margins that were eroded sharply last year because of high costs of store expansion and promotional spending.
Since then the company has undergone a management reshuffle leading to the appointment of Philip Spicer, former national food manager of Co- operative Retail Society, as its chief executive. Like-for-like sales growth was 1.5 per cent, against an industry average of 1.1 per cent.
Operating profits shot up from pounds 8.8m to pounds 11.6m. But the company incurred a pounds 655,000 interest charge in the first half, compared with a pounds 3,000 surplus last time. Capitalised interest against borrowings made for store developments was virtually static at pounds 1.4m. Net debts surged ahead from about pounds 36m at the year end to pounds 53m.
The group plans to open two new stores and replace one during the second half. Fully diluted earnings per share improved by almost a fifth to 12.01p. The interim dividend has been held at 2.7p. James Millar, chairman, said that despite a tight competitive climate, trading was expected to be satisfactory this year. The shares fell 17p to 209p.