The Manchester-based print franchise business posted a 7.3% increase in turnover, to £14.5m, but was hit by a 15% slide in pre-tax profit, which fell from £2.4m to £2.1m.

However, the fall in profitability was in-line with market expectation – given the recession – and Printing.com's share price rose by 17.2%, to 37.5p, in early trading following publication of the results.

Printing.com chief executive Tony Rafferty attributed the decline in margins to the financial assistance the company has given to its franchisees, in the form of marketing ventures worth "several £100,000" and an increase in sales of discounted items.

Rafferty added that the company had deemed it prudent to make some provision for a number of doubtful debts, although this had not yet been called on.

The chief executive was bullish about the company's prospects, especially in comparison to its traditional competitors.

He said: "The fact we centralise production means that we can offer far more pungent prices than if we produced work locally, and I would argue that we produce a more comprehensive suite of marketing collateral than any of the other high-street printers.

"Moving forward, I think we are very well positioned, provided we can hold our own and assist our franchise partners, to emerge a much stronger creature [after the recession]."

Printing.com increased its number of outlets from 249 to 283 over the course of the year, leading to a 7% increase in total retail sales, from £24.6m to £26.3m.

Meanwhile, the company also granted a Master Licence Agreement in the US, to Florida-based Raintree Graphics.

Printing.com also announced the payment of a special dividend of 2p per qualifying ordinary share, in addition to the total annual dividend of 3.15p per ordinary share, thus returning an additional £887,000 to shareholders.

Rafferty said: "The reality is that we are cash generative and, even taking a cautious view, we felt it was appropriate to return that additional £887,000 to shareholders.

"We are aggressive, well-placed and, even given the difficult times, structured in such a way that we can do that."