Dove said a major relocation and expansion plan begun before the recession had also affected its cost base. This involved moving its head office to Newburn Haugh industrial Estate on Riverside Way in Newcastle and opening three plumbing and heating sites at Ashington, Birtley and Newburn.
The company has twelve sites in the North East handling orders, rather than handling orders through its former Newcastle head office, a model it believes allows it to be more responsive to its customers.
The directors' report said: "We believe our new openings will take advantage of the plumbing and heating sector quickly. Plumbing and heating has not suffered as much in the recession. These businesses will make maximum use of our freehold assets. While the timing of moving branches was not ideal, we had no real alternatives to the relocation.
"Each new sites takes at least an 18-month lead in time to complete, thus there was no sign of the depth of the downturn at the inception of these projects."
The company saw bad debts and debt collection costs rise, up 27% at £318,000, but said it had a strong balance sheet with shareholder funds of £9.8m.
"The business is in ideal shape to take advantage of the upturn, with ten out of 11 sites, accommodating our 17th profit streams, either relocated or refurbished. Whilst trading conditions remain difficult we are confident the business is in better shape than when it entered the recession," the directors said.
Cost saving measures included reducing staff by 32 to 156 reduced payroll costs by £1m to £3.9m, including pension liabilities.