THE H and H Group, Carlisle, has continued to trade profitably into the new financial year, chief executive Trevor Hebdon reported to the annual meeting on Tuesday.

In its annual report and accounts the group reported a 40pc increase in profit before tax for the year to June 2002 - £374,000 compared with £266,000 for the previous year.

The meeting approved a final dividend of 8p a share making, with the 4p interim dividend, a total of 12p, against 4p for 2001.

"We're also ahead on performance on the same period last year, particularly due to the extremely strong ongoing performance of Borderway Finance and, from the beginning of September, a good contribution from the four marts recently acquired at Lazonby, Kirkby Stephen, Middleton-in-Teesdale and St John's Chapel, which have performed better than anticipated," said Mr Hebdon.

"The outlook for the remainder of the financial year is that we should remain on budget."

Mr Hebdon said the group's core business, its farmstock subsidiary, was facing pressure and changes, not least in the reduction of livestock numbers across the UK - something which was already happening before foot-and-mouth.

He also highlighted the increased restrictions on farms and marts as a result of the continuing 20-day standstill.

He urged producers to use auction marts for marketing all livestock, in spite not only of further trends towards direct trading of primestock in particular, but also of a noticeable rise in farmer-to-farmer trading of store and breeding stock.

"As a board and as a group, it's our firm intention to provide farmers with a financially sound and sustainable livestock marketing system for years to come," he said.

H&H Group chairman Ian Walker, who was due to retire at the meeting, was re-elected to continue in office until his successor, David Trimble, of Dalston, takes over in the spring, after relinquishing his role as High Sheriff of Cumbria