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North East furniture company Be Modern has said it is preparing for 鈥渁nother challenging year鈥� despite returning to profit in 2019.

The Jarrow-headquartered firm saw its sales remain relatively flat for the year ending May 11 2019, with turnover coming in at 拢20.66m.

But despite the flat revenue figures, Be Modern managed to make an operating profit of 拢170,000 during the period, up from a loss of 拢51,000 in 2018.

The company specialises in designing and manufacturing household furniture and fireplace products but said that its sales had been hit by 鈥渃ontinued cutback in local authority spending in the social housing market鈥�.

Be Modern added that its margin had been negatively impacted because of the above inflation increase in the living wage and the effect this had on wages across the market.

However, despite the increased labour costs the firm managed to lower its cost of sales, distribution costs, and administration costs by a total of 拢184,000.

The business said it had managed to offset its costs through changes made to its sales mix.

But despite the strong profit figures Be Modern鈥檚 chairman Walter Bloodworth said he still expected the current financial year to be a challenging one for the business.

Speaking in the financial accounts, Mr Bloodworth said: 鈥淚t is projected that 2020 will be another challenging year for the company. Efforts made over recent years to identify and develop new markets continue to be actively pursued to generate new revenue streams.

鈥淲hilst turnover for the first half of the 2020 financial year is marginally down on the previous year it is anticipated that this trend will reverse over the remainder of the year as the company has a healthy order book and continues to invest in the launches of new product ranges which should have a positive impact on the group鈥檚 performance in the short to medium term.鈥�

During the year Be Modern reduced its headcount by 11 members of staff bringing its total number of employees to 301. This had the effect of reducing the company鈥檚 staffing costs from 拢8.2m to 拢7.9m.

The accounts also show that the firm鈥檚 directors were paid less overall, The total payments to directors came in at 拢718,000, down from 拢806,000.