Storage company Norish has reported a slight uptick in its underlying performance for the first half of the year. Executive chairman Ted O'Neill has, however, cautioned against "over-optimism" for the remainder of 2006.

Norish recorded pretax profits of £300,000 for the first six months of 2006, down from £900,000 in the equivalent period of 2005.

However, last year's result was flattered by an exceptional gain of £700,000, leaving the 2006 profits slightly ahead on an underlying basis.

Turnover from continuing operations increased by £700,000 to £5.2 million over the same period.

Mr O'Neill said the firm had begun the year with high occupancy levels, but these had subsequently slipped back.

He highlighted Norish's Bury St Edmunds site, which he said did not perform as well as expected because of the loss of a customer that had closed a factory. "We are confident that we will replace this lost business in the second half," Mr O'Neill said.

In ambient food storage, Norish had full occupancy for the first six months and had needed to use third-party warehouses to cope with additional business.

Mr O'Neill said this level of activity should continue into the second half, but he played down the firm's overall prospects.

He said Norish was struggling to pass on the full impact of higher energy prices to its customers, while its general trading environment remained "difficult".

Separately, Norish has appointed Aidan Hughes to its board as finance director.

Mr Hughes had already been fulfilling the firm's finance function. He will retain his role as company secretary.

The company has also made Norman Hatcliff managing director.

Mr Hatcliff was previously operations director.

Norish shares closed 1p lower at 70.5p in London last night.