Profits at rural specialist Countrywide fell last year despite a jump in sales.
Countrywide reported a fall in operating profits to £1.3m in the year to May 31, down from a record £4m the previous year.
Sales increased by 18% to £266.7m, up from £226.3m in 2011, driven by new business and recent acquisitions.
The result follows a review of the business’ structure which started late last year. The company has acquired a number of suppliers and streamlined the number of products in store.
Countrywide said retail sales increased by 7% to £84m but that margins were “significantly down”.
The retailer opened its 50th store in Towcester, Northamptonshire in March. The 10,000 sq ft store features new merchandising and product presentation and Countrywide is to roll out the model to the rest of its store estate.
Countrywide, which is also an agricultural products supplier, was forced to make redundancies after poor retail conditions hindered sales.
Chairman Nigel Hall said: “It has been a difficult year with the impact of tough economic conditions and a mild winter lowering demand and reducing margins.
“As I reported at the half year in November 2011, the shortfall in performance stimulated a review of operational structure. The business has reacted swiftly to the fundamental shift in the market and has implemented cost reductions of £2.5m on an annualised basis.”
Hall said that the company has undergone a “major repositioning” of its retail business and it “has laid the foundations for a significant recovery in profitability in 2013”.
Countrywide chief executive John Hardman said: “The last twelve months have provided the most difficult market conditions I can ever remember.
“The retail business in particular has suffered from consumers lower disposable income, a situation we feel is unlikely to change in the foreseeable future and a backdrop to the substantial changes we have implemented over the last eight months.”