Frontier Agriculture increased its profitability by 43% in its second year of trading, according to figures released this week.

Pre-tax operating profits at the grain trading and inputs business, which is jointly owned by Associated British Foods and Cargill, were £11.3m for the year ending 30 June 2007. Profit after tax was £5.3m giving a 15% return on initial shareholder investment. Turnover was up 10% to £623m.

Chairman David Yiend said the business had achieved the main objectives it had set itself for the year. These included annualised earnings growth of at least 25% and a minimum 12% return on shareholder investment.

Chief executive Mark Aichison said volatility in the commodity markets was a huge challenge, but the business was well placed to cope.

He said its single grain-trading book meant it was efficient at matching contracts with buyers and sellers when markets were rising and falling sharply on a daily basis.

The firm’s strong balance sheet also meant it had no problems accessing capital, which was vital when the cost of trading had doubled in a short period, added Mr Aichison, who stressed that Frontier was committed to the long term.

“Many businesses talk about long-term commitment, but at Frontier we mean it. Our shareholders have received no dividends, but instead all our earnings and cash from operations have been reinvested back in the business,” he said.

• Animal feed business KW, which is also part of Associated British Foods, has bought the specialist south-west blends business Agri Blends. The firm, based at Grimsdyke Granaries, Coombe Bissett, Wiltshire, will be known as KW Agri Blends.