West Country co-operative Mole Valley Farmers has raised its turnover by almost 17% over the past year, to a new record of £328m.

The firm attributed the growth to improvements in standards and service as well as continuing investment in agricultural and rural retailing initiatives.

However, pre-tax profits in the year to 30 September, 2011 fell from £4m to just over £3m, with the business trying to absorb inflationary increases amid consolidation among the supply industry.

“Despite having to contend with a very economically challenging year, I believe the staff have endeavoured to mitigate the effects of adverse market conditions and low consumer confidence, still managing to produce a positive trading result,” said chief executive Andrew Jackson.

With record livestock feed costs, MVF slashed feed margins close to the cost of production, ultimately impacting on financial results, he said. Like for like dairy compound feed sales remained stable, but beef feed and blend tonnages dropped during the year, with the combined output of feed mills exceeding 350,000t of finished products.

Sales at retail stores across the group, including SCATS Countrystores, Bridgmans and CWG Countrystores, increased by 2.7% to £82.5m, and like for like sales across all sectors increased by 9%. At the same time, farmer shareholder numbers had grown by 400 to more than 6,700 members, receiving a total benefits package of £750,000.