Mr Hughes addressed the workforce with the upbeat message at a buffet lunch celebrating the company’s bicentenary.
He said the Berwick-upon-Tweed business had enjoyed a turn-around in 2011 with significant new business wins, followed by a strong start in the first quarter – which saw a profit for the first time in 10 years.
But he warned the second quarter would be very challenging.
"The core traditional business is suffering from the impact of recession and government cutbacks in funding of 25% to social housing," he said.
"We need to be aware of the market dynamics, hold our nerve and, above all else, keep to our clear strategy for growth, investment and future success."
Mr Hughes said Allan Brothers was looking to become the number one player in the timber windows market over the next three to five years.
"This will come from a combination of focusing on the consumer market while growing the organic business alongside the potential for acquisitions in a fragmented market where consolidation is inevitable."
Swedish parent group Inwido’s CEO Hakan Jeppsson also addressed employees, saying the market for timber windows and doors in the UK offers an "excellent platform" for European expansion by Inwido.
"We will be Europe’s leading supplier of windows and doors by focusing our resources, products and services on people’s needs and this at a time when we are seeing a very definite trend towards timber products in the UK," he added.
