The independent Scottish fine paper manufacturer also reported a "solid strengthening" of its positive cash position for the year, up to £5.3m from £3.2m in 2008.

Despite hostile market conditions, group chief executive Chris Parr said the company had been able to increase its turnover by 6%, from £144m to £153m.

He said: "This was due a strict pricing discipline that we implemented and also because of a favourable movement in the exchange rates during the second half of the year for the euro and the dollar."

This movement has helped to offset the impact of increased energy and material costs, which were a significant feature during the first three quarters.

"Our industry, like most other sectors, faces a very challenging year ahead with market demand being heavily depressed and structural changes looking almost inevitable," he said.

However, Parr said the company remained "quietly confident" as it entered this period with "a very strong business, a robust strategy and an excellent management team".

Also see: Veteran green campaigner tours Tullis Russell's biomass plant site