A family-owned cold storage builder watched operating profits melt by nearly £1 million last year as margins were squeezed.

International Controlled Atmosphere, known as ICA, saw turnover slip to just below £13 million in 2014, compared to £15.2 million and £10.4 million in the previous two years respectively.

Operating profits fell to £544,000, down from £1.4 million a year earlier.

Pre-tax profits were largely the same, according to its latest accounts.

The Paddock Wood-based technology company, which has built stores for farmers since 1937, is expanding its mechanical and engineering operations to build developments for a variety of industries.

However it said its gross margin was 21.3% last year, a 1% fall, “due to lower margins in the mechanical and engineering division and partly due to highly competitive market conditions”.

General overheads increased by £186,000 mainly as a result of increased salary costs as it “continues to invest in people to support its growth programme”.

It said turnover had been hit by the introduction of an EU grant in the last quarter of last year, which meant some revenues were deferred to 2014 as customers applied for grant funding.

It said: “This was a significant factor in the 14% reduction in annual turnover compared to the prior year.”

However, bosses said the firm is gaining new work from customers taking advantage of new grants.

Its order books increased throughout 2014 and continue to do so this year.

It has invested £200,000 expanding its offices and production facilities.

The company was founded as a building firm by Harry Lawrence, the great-great grandfather of managing director Andrew Wills, in Five Oak Green in 1901.