The company said that the expansion into the warehouse space, a quarter of a mile from the company's existing site in Mansfield, could be the first step in a wider growth of its distribution and stock management activities.

The company has also recently signed major fulfilment contracts with two household name brands, although details were not available.

Linney Group managing director Miles Linney said: "As we've seen the trend to a lot more outsourcing of non-core work for customers, it's been an interesting avenue for us explore.

"Our customers outsource more and more, and this includes stock control and distribution of products."

He added that he expected to take on more space near the new warehouse as demand for non-print services continued to increase.

Linney Direct, which has a turnover of around 10 million, has grow by around 30% year-on-year over the last three years.

Linney also reported that the new 1,200-pallet warehouse, which is already two-thirds full, has created twelve new full-time jobs at the 150-employee Linney Direct.

Linney Group's 11-acre site houses around 10,500m2 of warehouse space, and the company was also leasing 2,000m2 which it has now given up.

The new warehouse, taken on a ten-year lease, is on a light industrial estate within an Enterprise Zone, which means that the premises will be rate-free until autumn 2005.

The Linney Group, based at Mansfield in Nottinghamshire, includes Linney Print, Linney Direct, Linney Design, Linney Connect and Quadrant.

Story by Josh Brooks