PEEBLESSHIRE'S largest private employer suffered a downturn in profits last year.

But the chairman of Glenrath Farms Limited is still predicting a bright future for the family business.

Sir John Campbell announced the egg-producing company's pre-tax profits had dipped by almost 18 per cent to £6.76 million during 2016/17.

Sir John, who founded the company in 1959 with his wife Cathy, admits he had predicted the drop in profits as competition continues to hot up.

In his annual chairman's report, he said: "I have been long predicting the financial downturn in the industry and I do feel, in the present economic climate and market circumstances, this is a very good result.

"The market place competition has grown considerably with many smaller packers being very competitive - going direct to supermarkets with offers, which in return reduce prices.

"I anticipate this practice will continue.

"Fortunately, we are in a very strong position to compete in the market place and we are reacting to the challenges we face."

Glenrath Farms Ltd now employs a total of 216 staff, up by nine on the previous year, spread across its various sites in Peeblesshire.

Its wage bill increased from £5.10 million to £5.16 million during the same 12 months.

Although profits fell during the last financial year, sales increased by 1.7 per cent and the company's net assets have grown by seven per cent to £77.2 million.

Sir John, who was knighted last year for services to agriculture and entrepreneurship, believes ongoing changes across his Glenrath business will keep it at the forefront of egg production.

In his chairman's report, he added: "We have recently converted one large laying house from colony to barn production at considerable cost and we are in the process of securing orders for barn production.

"Going forward I believe the UK shell market could well move to freerange-only after 2025 when colony egg production will cease.

"Our contract model for freerange egg production is progressing well, utilising experienced stockmen to look after freerange hens.

"I believe this is a win-win situation for many farmers and our company.

"We are in the final stages of modernising all our production, packing and processing facilities, and we believe we have the most modern and efficient facilities in the UK."

Glenrath Farms Ltd is awaiting the outcome of an appeal with the Scottish Government to build a new poultry hut near Easter Happrew Farm near Stobo.