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Stiller Group says it remains confident about the future despite revealing poor results for the year to 31 December 2007, including an update on its 2008 trading, which "may cast a significant doubt on its ability to continue as a going concern".

The accounts show that it was in breach of its banking covenants during 2008, relating to the profitability of the business.

Andrew Winney, financial director at the  Stockton-on-Tees firm, explains: "As the recession deepened, we shared with the bank [HBOS] our trading position and it was clear that the general haulage side of the business was suffering from a severe slowdown in steel and construction."

As a result, the firm has had to abandon the support offered by its overdraft - which stood at £3.4m in 2007 - instead opting for a £5m invoice discounting facility, also from HBOS "who continue to support the business", according to Winney.

This, plus the availability of other long-term loans, leads the accounts to state that the directors have prepared projected cash flow information for the 12 months to the end of January 2010.

"On the basis of this cash flow information, the directors consider that the group will continue to operate within the invoice discounting facility recently agreed."

However, with the company exposed to the steel and construction industries, there is a concern that these cash-flow predictions may  already be out of date. Winney adds: "It would be naïve to say there is no threat to the business. However, the strategy entails nurturing the profitable parts of the business with investment in specialised activities, which we see as the long-term future of the group."

The firm's specialist division and tanker business have both held up well, he adds.

Other cost-cutting measures during 2008 - notably a 30% reduction in its workforce - have reduced its levels of debt, however, the group is not predicting a profit for the trading year to December 2008.

In the year to 31 December 2007, group turnover fell to £46.4m, from £49.4m in 2006 pre-tax losses hit £980,000, down from pre-tax profit of £808,000 the previous year.