The Croydon-based digital printer, which was founded by former Olwen Direct Mail partners Andy Ruddle and Peter Rivett in 2005, built on its first annual profit in 2010 with a further surge in profitability in 2011.

Both Rivett and Ruddle stepped down from their roles as chairman and group sales director in April 2011 and February 2012 respectively, although both have retained their shareholdings.

Operating profit more than doubled from £1.4m in 2010 to £2.9m in the current year, on revenues that were up just 17% at £16.3m (2010: £14m).

RDI's bottom line was further boosted by a £609,362 exceptional benefit, mainly arising from the £556,828 write off of an equipment finance liability.

As a result, pre-tax profits at the firm soared 296% to £3.1m (2010: £776,930), while net profits were up 89% at £3.5m (2010: £1.9m), following a £460,335 tax benefit.

RDI accrued a sizeable deferred tax asset in its first four years trading as its high level of debt relative to sales led to significant losses. These losses, added to accelerated capital allowances, have left RDI with a £13m deferred tax asset that will ensure it doesn't have to pay tax for several years.

Finance director Paul Reeves told PrintWeek: "Certainly for the next three years we would expect to be tax free, which is why we can use that money to aggressively pay down debt."

Net debt was reduced by £2.8m in 2011 while further debt reduction is planned for the current financial year. Reeves said that finance lease payments would be reduced by a further £1.9m in 2012, while the company's bank overdraft will be brought below £2m.

Net debt at 31 December 2011 stood at £7.5m, down from £10.3m on 1 January 2011. A total £1m dividend was paid in the year to 31 December 2011, providing an 8% return on investment.

For more see this week's PrintWeek.