In its full-year results, the firm posted sales of 42.9m compared to 44m in 2005 and made a pre-tax profit of 1.1m compared to 1.2m.

According to Litho Supplies chairman Bernard Clark, the decrease in profits and sales was due to a bad debt charge, which was higher in 2006 by 130,000.

Clark added: "Without this additional bad debt charge, trading profits from continuing business activities would have been slightly ahead of last year."

Chief executive Michael Hammond said: "Market conditions in the printing industry in 2006 continued to be challenging with weak demand and over-capacity in the market. Considering these trading conditions, I am pleased with the results for the year.

"The strength of the group's balance sheet and cash position provides opportunities for both organic growth and acquisitions. I am particularly encouraged by our opportunities in the wide-format and office equipment markets."