Scotmid, the largest independent Scottish co-operative, has reported operating profit up 18% to £10.2m in its full-year results, marking the first time it has broken through the £10m barrier.

In the year to January 31, sales were up £21m to £354m, with all divisions making “good progress” and its convenience food business - Scotmid and Morning Noon & Night - the “main driver”.

In the year it embarked on the modernisation of its discount health and beauty fascia Semichem. It also opened 15 new Semichem shops and developed its website. The group also launched a new format called The Fragrance House.

But Scotmid chief executive John Brodie said 2010 will be a “challenging year” and prospects for growth may be constrained by the uncertainties in the market.