sherborneWest Yorkshire upholstery producer Sherborne has posted its first seven-figure profit in 13 years, with a 320 basis point swing in gross margin a contributing factor.

The Bradford based producer of recliners and adjustable furniture made £1.6m (2013: £737k) at the operating line in the year to end June, with gross margin rising to 27.6 per cent.

Pre-tax profits totalled £1.8m, additionally buoyed by interest and similar income. The last time Sherborne registered profits north of £1m was back in 2000–01, when it made £1.6m before tax.

Privately owned Sherborne said it had benefited from favourable exchange rates and material cost stability in the latest period. Sales were up 2.8 per cent to £23.8m, with rising UK revenue (+3.4pc) making up for lower exports (-10pc).

The business generated a net £1.7m cash from operations and a similar sum overall as year net cash reached £5.9m (2013: £4.5m).

Shareholder funds — however — declined to £9.9m (2013: £10.1m), reflecting a £2.1m actuarial loss on its defined benefit pension scheme.

Post year-end Sherborne commissioned a Scheme Funding Report — the results of which are not reflected in its accounts — which concluded that its shortfall had reduced from £2.3m in April 2013 to £1.1m at July last year.

Notes to the manufacturer’s accounts highlight it having decided to pay contributions of £12k per month over 12 years from 1st April 2013 to make good the shortfall.