Difficult market conditions and high restructuring costs led to a drop in profits for Sussex-based Body Shop.

The company reported profits for the year to March 3 of £25 million, down from £31 million last year.

But there was good news for the Littlehampton-based company in the figures. Worldwide, retail sales were up seven per cent to £691.4 million and turnover was up 13 per cent to £374.1 million.

Chief executive Patrick Gourney said he was confident about the company's future.

He said: "The strategy now in place will deliver results over the medium and long-term."

Finance director Alistair Murray said the company was being honest about mistakes it had made.

"We have learned by the mistakes and we are cautiously optimistic about the future. For the current year, we are anticipating a reasonable improvement in profits as the benefits of our actions begin to feed through to our results."

Last year, the company opened 111 new stores worldwide bringing the total to 1,841 stores.

Other significant factors affecting group profits were additional costs of approximately £3 million from carrying higher levels of stock and an increase in overheads.