Zetar, the UK snacks and confectionery group, has seen underlying annual profits climb 14% on the back of rising sales.

The company today (23 July) reported a 14% increase in adjusted operating profit from continuing activities to GBP8.7m (US$17.3m) for the year to 30 April.

Revenue rose 12% to GBP106m, Zetar said.

Chairman David Williams said the last 12 months had been the "most challenging" Zetar had seen since it was set up three years ago.

"The collapse in the credit markets last year, the knock-on economic effects and the related negative stock market reaction have been, and are increasingly being, felt by all companies dependent on consumer confidence, including those in the food sector," Williams said.

The rise in profits came despite rising raw material and energy costs - and this year's early Easter - hitting margins and sales, Williams said.

Over the last 12 months, Zetar continued its acquisition spree with the purchase of Irish chocolate maker Lir.

However, chief executive Ian Blackburn said the current economic climate would make it difficult for Zetar to continue that expansionist strategy.

"For the foreseeable future, the financial markets will make it difficult to grow the group by acquisition," Blackburn said. "However, last year's investment in manufacturing capacity and the group's entry into the emerging healthier baked snacks and growing luxury indulgent box chocolate sectors, as well as the addition of the Baileys licence for chocolate will enable the group to grow organically."

Blackburn added that Zetar has made a "solid" start to its current financial year, with sales up 13% over the first 13 weeks.