Princes has seen its profits slashed by Brexit and raw material cost inflation, its latest accounts reveal.

Group turnover increased from £1.49bn in 2016 to £1.50bn in the year ended 31 March 2017, but this was mostly down to higher retail prices for Princes products, which were “directly linked” to raw material cost inflation, the company noted.

Higher raw material prices and exchange rate volatility pushed up the cost of sales to 82.3% of revenues at £1.24bn, leaving pre-tax profits excluding impairment charges at £28.7m, down from £54.4m in 2016.

Overall profits were further hit by the group’s strategic review of its manufacturing sites last year, which led to the recognition of an £19.3m impairment loss in the accounts.

This left pre-tax profits of just £9.4m, down from £54.4m in the previous year, while operating profits were £11.8m, down from £57.8m in 2016.

“The economic environment our business faces is significantly challenging. Raw material price increases and ongoing deflationary pressures have resulted in a reduction in our pre-tax profit,” said a Princes spokesman.

Princes faced a particularly challenging environment in ambient fish, where commodity prices have surged due to supply shortages of salmon and tuna.

In September, The Grocer revealed average unit prices for Princes tinned fish were up 3.2%, with marketing director Neil Brownbill blaming the inflation on “increasing raw material prices and the exchange rate”.

However, the group remains confident it can return to growth despite “unprecedented market conditions”. It appointed a new MD, Cameron Mackintosh, in April 2017, and launched a partnership with Crown Food Europe to boost awareness around the positive benefits of canned food last July.

“We are executing a strategic plan which prioritises employees, customers, consumers, suppliers and key stakeholders, whilst maintaining our commitment to integrity, partnership and service,” said the spokesman.

“We continue to make progress is delivering our strategic priorities, and look forward to that positively impacting on our performance.”