Insider Media Limited

Turnover rose by 20 per cent and edged closer to £50m at Shrewsbury-based Paterson Enterprises thanks to record volumes in its lubricant business. That's despite having to steer the division through "very choppy waters". However, profit slipped by more than £1.5m at the group, which owns Morris Lubricants and Morris Leisure, as its margins were squeezed by "unprecedented" levels of raw materials inflation.

For the year to 30 July 2011, turnover reached £47.5m, compared with £39.5m in the previous 12 months – with a record £45.65m generated from the lubricant division and £1.93m from leisure.

Pre-tax profits at Paterson, which employs more than 140 staff, fell to £5.4m for the year, down from £6.9m in 2010.

As well as being hit by rising raw material costs, profits were depressed by new employee share distributions and an additional good will write-off associated with its static holiday homes in Bow House Country Park in Shropshire.

"While the year's profit outturn is slightly down when compared to 2010 it is now at a level which is much more sustainable," chairman David Jones said in the accounts.

"We have continued to invest in both lubricants and leisure. While demand has slowed it remains substantial.

"We do expect in the longer term trading to return to more normal and sustainable profit levels."

Morris Lubricants, which has been manufacturing lubricants for a range of sectors, including automotive, industrial and agricultural, in Shrewsbury since 1869, achieved record volumes despite what it described as "exceptionally challenging trading conditions".

The division officially opened its new blending plant in October with a visit by the Princess Anne.

The logistics operation is now in the process of being moved, along with the installation of a new high-speed, small-pack filling line.

"Both of these projects will lead to significant improvements in our internal efficiency, and will reduce costs accordingly," Jones added.

To date, the group has invested £1.24m on the modernisation programme, with a further £880,000 planned for this year.

Morris Leisure, which owns four touring caravan and holiday home parks in the Shropshire countryside and in North Wales, performed "strongly" benefiting from the "staycation" trend.

Planning permission was granted in June for a new 135-pitch touring park at a 20-acre site in Ludlow.

An opening date of spring bank holiday this year has been announced by the company.