Iain Black, sales and marketing director of the Paragon Group (previously listed as Grenadier Holdings), said that investment should be made to meet existing customers' needs.

"Don't invest speculatively in the hope of attracting new business – it doesn't work like that," he said. "Some businesses invest in new kit but have little idea how to get to market. You have to invest to meet demand."

Black's comments come as the UK- and Europe-based company geared up for the installation of a Kodak Nexpress Digimaster 110 and a Digimaster 2100plus to cater for the growing demand for short-run work.

The Kodak installation follows its recent investment in a Morgana Digifold 5000P and a Horizon StitchLiner.

Founded 10 years ago, Paragon has grown substantially to become the UK's 16th largest printer with a turnover of £107.9m, according to last week's PrintWeek Top 500.

The company came top of the return on capital employed rankings with a 352% return. Black attributes the success of the company to its willingness to make brave decisions.

"We are not scared of new markets," he said. "We are also not scared of buying troubled businesses and turning them around."

Black added that to maximise returns on investment, a business must be highly responsive to market conditions and be willing to be flexible with the allocation of resources.

"We back growing markets and are prepared to shift assets to allocate more investment in growth areas," he said, citing the company's recent expansion in Romania.

In an interview with PrintWeek, Black predicted that the next 12 months would be tough for many printers but claimed that niche players would get stronger. He added he anticipated significant consolidation.

For more, see next week's PrintWeek.

To order your copy of the PrintWeek Top 500, e-mail kathrine.bradley@haymarket.com.