The Queen’s wine merchant, Berry Bros & Rudd, has dramatically cut its losses despite a drop in sales to bounce back from a “disappointing” 2015 financial year.

The wine and spirits trader reported a 4.4% fall in sales in the year to 31 March 2016 from £151m to £145m as it sought to stabilise its business following poor trading in the previous year.

“Significant steps to improve business performance” during the period led to a £2.8m operating loss being turned around to a £1.5m operating profit, the accounts state, while the pre-tax loss of £6.2m was cut to a loss of £640k.

The results represent its best year of trading since the year to 31 Mar 2012 after reporting operating losses of £1.9m and over in each of the last three financial years.

As part of this turnaround plan the company brought in Tesco BWS head Dan Jago as CEO, and former BBR Spirits boss Jeremy Parsons as COO to shake-up the business last year.

“We have focused on stabilising our existing business and we have seen solid performance across our business portfolio in mine, spirits, storage, hospitality and education,” the accounts state.

During the year Berry Bros restructured its business activity in the UK and Asia, resulting in exceptional costs of £2.1m related to redundancies and an office closure. It also launched a new e-commerce platform during the year.

The accounts also revealed the company has shifted investment into maturing Whisky stocks and “substantially” reduced levels of wine stocks as part of a drive to focus on working capital.

The firm also benefited from settling litigation with its former Hong Kong distributer, which generated an exceptional income of £2.1m.

Including exceptional items and taxation, reported losses dropped from £4.1m to £1.1m.