Canned food giant Princes suffered a sharp drop in profitability last year despite a £300m sales boost.

As a major auction for the group nears completion, newly filed accounts for Princes show the group fell to a £50.6m pre-tax loss in the year to 31 March. That’s down from a profit of £28.9m in the previous financial year despite sales growth from £1.44bn to £1.74bn.

The scale of the loss was down to £57.7m of impairments charges taken during the period, largely due to finance charges results from increased interest rates. However pre-exceptional profits also fell sharply, from £29m to £7.1m.

Princes suffered from increased cost prices, operational costs and overheads, but headline sales were boosted by inflation-driven price increases.

Princes MD Cameron Mackintosh said “extraordinary inflationary pressures” had reduced gross margins from 17.6% to 15.3%, but group performance had remained “resilient”. He said the company was well positioned for growth in the current financial year.

“Despite another challenging year for the food and drink industry, Princes Group remained resilient, continuing to adapt, transform and make important strides towards our targets,” Mackintosh said.

“Since the end of the reported financial year in March, we have seen significant improvements in our financial performance, and we want to build on this progress into next year.”

The accounts come as the sales process for the company, triggered by current owner Japanese conglomerate Mitsubishi Corporation, is understood to be close to conclusion.

It is believed that UK private equity player Epiris is in pole position to win the £400m-plus auction, having seen off competition from Italian food group Newlat.

Mitsubishi, which has owned Princes since 1989, tasked investment bank Houlihan Lokey with finding a buyer for Princes over a year ago. The process was paused in June after early bids fell well short of its asking price.

Despite uncertainty over future ownership, Princes has continued to invest in growth plans across major brands, Napolina and Princes Fish.

This included the next phase of Napolina’s £3m ‘Not So Humble’ campaign to champion quality staple ingredients as the heroes of Italian cooking, followed by the launch of a new £2m ‘Fish for Greatness’ campaign.

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