Glasgow wholesaler JW Filshill, which supplies 175 KeyStore convenience outlets across Scotland, has reported an increased operating profit of £1.1m in the year to January 31, 2017 despite a 0.5% fall in revenue to £142m.

The profit figure compares to £0.9m for the previous year, and was achieved largely through a change in business mix away from tobacco and towards food and drink, helping to deliver a 0.6% uplift in gross profit percentage, up 8% on 2016.

Managing director Simon Hannah, the fifth generation of his family to run Filshill, said: “Our market is evolving with further changes to tobacco sales regulations likely to drive the same trend for coming years, forcing convenience operators to focus more heavily on growth areas such as local sourcing, food to go, and fresh and chilled foods.

“We have ramped up investment in our workforce to enable us to engage more closely with our KeyStore customers and manage the principal risk of losing customers to other groups by offering strong promotions and wide-ranging advice and support, including store layouts, planograms, consumer leaflets, digital social media and Epos till installations.”

The group’s international division, which exports craft beer, craft spirits and other grocery products to the rest of the world, Asia-Pacific in particular, continued to grow. “We are pleased to see our international business starting to generate profit,” continued Hannah. “The markets we operate in remain highly competitive but we are well positioned to take advantage of the opportunities we are creating.”

Ian McDonald, one of the chief architects of the KeyStore business in Scotland, is due to retire from Filshill in January 2018 after over 40 years with the company. He will be replaced by Craig Brown in the newly-created position of retail sales director.