Beds and furniture group Silentnight said it was set for growth after suffering "one of the most challenging years ever" in 2001.

Chief executive Bill Simpson said the basis of a strong business was in place despite full-year pre-tax profits slipping 13 per cent to £12.1m.

Sales in the group's core beds division had continued to climb helped by its advertising activity, centring on Silentnight's Hippo and Duck characters.

And while orders of upholstery and cabinets had weakened recently, Mr Simpson said the furniture division should "advance" in the coming months.

He said: "We remain confident that we have the basis of a strong business that will deliver the required growth in the medium term."

Silentnight added Ducal and Cornwell Parker to its furniture division in late 2000 and the deals pushed group turnover up 31 per cent to £300.3m last year.

But restructuring work at both businesses and tough trading pushed operating losses at the arm to £3.2m from £495,000 the year before.

Mr Simpson said the operations of both Ducal and Cornwell Parker had been strengthened in the past year with the latter's fabric business sold off.

He added Silentnight's furniture factory in Keighley had closed under plans announced last month, with the loss of 180 jobs.

Production is being moved to the Homeworthy operation, in the Southwick area of Sunderland, where Silentnight has invested £6.5m over the past two years. The factory currently employs 700 staff.

The group's core beds division enjoyed a far better year with sales up seven per cent to a record £162m and operating profits up 12 per cent at £15.5m.

Mr Simpson said there was no sign of this growth slowing. "People buy beds through need and upholstery and cabinets through desire. That's the difference."

Shareholders will receive an unchanged total dividend of 13.50p per share.