South Tyneside furniture firm BeModern has warned of challenges triggering ‘measures to manage its cost base’ after seeing a fall in profits, despite seeing strong demand since the pandemic.

The Jarrow company, launched in 1964, has grown to design, manufacture and distribute fireplace products and household furniture across the º£½ÇÊÓƵ. Recent years have seen the company tackle the impacts of the pandemic, as well as cutbacks in local authority spending in the social housing market.

The company has now published accounts for the year ended May 2023, highlighting a profitable year following the Covid-19 pandemic, despite seeing a fall in turnover and profit. BeModern Limited saw turnover drop from £27.9m to £24.4m, while operating profit fell from £1.8m to £606,989. The company chalked up overall profit for the year of £559,472, down from the 2022 figure of £1.47m.

The company uses the accounts to detail investments made into new products, but also warns that price increases would need to be passed onto customers, while saying other cost-saving measures would also be explored.

Speaking in the accounts, bosses said: “The directors are pleased to report that the company has continued to be profitable following the impact of Covid-19 in recent years. Demand for the group’s products remained strong and despite a reduction in turnover gross margin has been increased.

“It remains to be seen how the continuing cost of living crisis caused by an unprecedented increase in the cost of power, fuel, interest rates and basic foodstuffs will impact on the demand for the company’s products over the coming year should customers reign in their discretionary expenditure in response to these cost pressures.

“The company itself is not immune to such cost pressures with the rising cost of electricity and diesel significantly increasing the cost base for the company, this together with continued pressures within the supply chain in terms of the supply of labour across all sectors and continued significant increases in the cost of raw materials means that unavoidably the company will have to pass these on to customers over the 12 months ahead if margins are to be maintained.â€

During the year the company reduced its workforce from 306 to 286. The accounts added: “As the company moves into 2024 it is faced with a great deal of uncertainty concerning issues addressed in the principal risks and uncertainties section relating to inflationary cost pressures within the wider economy. The directors are aware of these challenges and whilst continuing to invest in new product ranges which have had a positive impact on the company’s performance to date are also actively looking to take measures to manage its cost base.â€