REDUCED costs and a more balanced customer base have helped Richmond Foods to improved profits.

In the year to October 1, pre-tax profits increased by 25 per cent to £3.77m, compared with £3.023m in the previous 12 months.

During the year, Richmond, based at Leeming Bar, acquired Allied Frozen Food's ice cream business for £19m, which is expected to double the company's turnover, which currently stands at £70.6m, up 36 per cent on the previous year.

However, the deal has led to the axing of 120 jobs in the Allied business, because of duplication.

Richmond Foods now employs 800 staff, around 400 of them based at its Leeming Bar headquarters.

James Lambert, chief executive of Richmond Foods, said: "The major reason for the acquisition of Allied's ice cream business was to allow Richmond Foods to trade with all the major supermarket groups.

"A further reason for the acquisition was that Richmond is strong in the water ice and family two litre markets, but weaker in the growing premium tub, cones and chocolate product markets.

"This has been improved with much better representation in all product categories."

Richmond already produces Treats brand products as well as ice cream brands such as Ribena, Heinz and Nestle.

Mr Lambert said the company was currently looking at more deals to produce major name products.

However, the market for Treats products was affected by the wet, dull summer. As a result sales fell by £1.3m to £8.3m.

The take home supermarket sector continued to grow throughout the year, and is now worth more than £500m per annum.

The own label market accounted for 36 per cent of that total, of which Richmond accounts for 63 per cent.

For the second year running, Richmond Ice Cream won the British Frozen Food Federation Retail Product of the year.

Plans for the coming year include enlarging the dairy filling and hardening capacity at the Leeming Bar base, to accommodate additional lines.

Commenting on the results Mr Lambert said: "This has been a very good year for the company, with profits up 25 per cent, a better balance of customers and more than £2m of cost reductions."

He added: "I am very confident that we will continue to build on this improved performance during the current year."

Shareholders will receive a final dividend of 2.5p per share