The federation significantly boosted its cash reserves following the sale of all of its investments prior to the financial crash. At the year end, it had cash deposits of £668,000, compared to a peak overdraft of £1m the previous year.

However, a pension liability of £1.3m for the year resulted in a total deficit to members' funds of £484,000. In 2002, the BPIF's pension deficit stood at more than £4.5m.

Membership has increased by 6% in the past year, complementing a 9% turnover boost to £7.7m.

Chief executive Michael Johnson said he was pleased with the "major achievement" of returning the federation to profit, adding that the pension scheme was now "under control".

"We are back in a strong position," he said. "We have taken the hard knocks that this year has brought and held the pension deficit at the same level against a falling market."

In a year that has seen the launch of a number of new initiatives including the BPIF Directory, the new membership magazine Inprint, a carbon calculator, and the BPIF Financial Alliance.

Johnson said the BPIF now offers more than 200 products to both members and non-members, but said that it was "a pity" they were not used more frequently by companies.

However, departing president Mike Taylor warned of a tough year ahead, with the industry body facing "an uphill struggle" to maintain income levels in the face of reduced turnover of member companies.

To mitigate this challenge, the federation has frozen the pay of its staff, as well as reducing headcount by 20% during the past 18 months.

Taylor will be replaced by Trinity Mirror's Rupert Middleton at next week's AGM when his two-year term comes to an end.