Crown Paints has warned of "another challenging year" as it feels the impact of a rise in raw materials costs, inflation and increased competition.
The Lancashire-headquartered company added that it also expects a volume reduction of market growth in 2022, returning to pre-pandemic levels.
The updates come in newly-filed accounts for the 12 months to December 31, 2021, which show the firm's revenue dipped from £212.8m to £205.3m and its pre-tax profits went from £16.9m to £13.9m.
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A statement signed off by the board said: "Both the retail and trade paint markets in the UK remain highly competitive trading environments.
"However, the trade sector rebounded with the increased large scale construction projects that were halted during the Covid-19 impacted previous year.
"Retail business performance during the year has been robust despite demand within [the] retail market falling from record highs in 2020 but Crown were on forecast as demand for home improvements continued to be strong at the start of the year.
"Due to the increases in raw materials the business has had to increases prices during the year which has benefited revenue, slightly impacting market share. Due to the fall in demand within the retail sector revenues are down 3.5%.
"The company continues to invest heavily in the brand and in delivering a continuing improvement in service levels, product choice and quality.
"It will also continue to invest heavily in manufacturing and supply chain, delivering best in class efficiency improvements in productivity and output."
It added: "In line with market forecasts, the company expects a volume reduction of market growth in 2022, returning to pre-pandemic levels.
"The directors believe that further increases on top of record highs around raw materials costs in both the trade and retail market together and increased inflationary costs with increased market competition will lead to another challenging year.
"The company will continue to offer value, innovation, service and choice to existing customers across the brand portfolio to maximise growth opportunities, whilst working with new customers to explore further opportunities for growth."
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