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FAMILY business Avoca recorded a 28pc fall in profits to €1.197m owing to an increase in expansion costs.

Avoca Handweavers Ltd and subsidiaries recorded an 2.2pc increase in revenues from €48.6m to €49.7m last year, but profits took a hit.

Managing director Simon Pratt said that the family was "disappointed with the performance to January 2012".

"But it was a year when we put into place some new structures to allow for future growth," he said.

"One of the factors in the reduced profits for 2011 was investing in areas of expansion that are already paying dividends in 2012."

The company has opened a standalone central bakery, launched a new food-only model at Monkstown and opened a 20,000 sq ft store in Malahide, creating 170 new jobs, in the past two years.

Avoca had its busiest Christmas retail business since 2007, with like-for-like sales on 2011 up 5pc and the MD said that there "appears finally to be more positive sentiment".

Avoca now employs 750 people and Mr Pratt confirmed the year-to-date turnover is up over 15pc for the retail and cafe business.

The company is showing improvements in 2012 after restructuring the wholesale operations.

"The current [financial] year is proving more positive in terms of both sales and profit increase. We have expanded our retail operations, with the first full year trading of our Salt Cafe and Avoca Food Market in Monkstown and the opening of Malahide Castle, and consolidated our wholesale business," he said.