Innocent, the UK smoothie and Veg Pots maker, has reported a loss of GBP8.6m (US$14.4m) for 2008 as falling sales and the cost of building a European business hit the bottom line.

The company filed costs of GBP12m linked to developing its "nascent, high-growth" business on the Continent and said it would have returned a profit of GBP1.1m.

In a filing with Companies House, Innocent booked an operating loss of GBP10.9m and a post-tax loss of GBP8.6m for 2008 - compared to net profit of GBP8m in 2007.

Innocent described 2008 as a "challenging" year for the business, with sales down 12% to GBP99m and gross profit sliding 26% to GBP30.1m.

However, the company claimed its "underlying" UK business was profitable and was supporting the investment the group was making in Europe.

Looking at the UK, Innocent said it hung on to a majority of the country's smoothie market despite growing competition and claimed the launch of Veg Pots had been a "success".

"In the light of the entry of two multinational FMCG competitors and a challenging macro-economic environment, the directors are satisfied that we maintained the majority share of the smoothie category at year-end, demonstrating the inherent desirability of our products," Innocent said. "The launch of Veg Pots has been a success and is on-track to exceed GBP8m in revenue in 2009."