The print group’s pre-tax profit fell to £11.4m in the six months to 2 February, down from £14.2m in the same period a year earlier.

Turnover rose to £209.2m in the period, compared with £195.6m a year earlier, in part due to the addition of £8.7m of sales from Service Graphics, which St Ives acquired last November .

However, Service Graphics also contributed a small loss of £331,000, which St Ives put down to the traditionally quiet Christmas period.

The results also revealed that the failed Tangent bid had cost St Ives £750,000 in fees, an amount described by St Ives managing director Brian Edwards as “obscene”.

Tangent attempted a reverse takeover of the print group last summer, despite having a turnover of around £7m, compared to St Ives’ £420m. St Ives said the offer “significantly undervalued” the group.

Edwards described the market as “extremely challenging”, but was confident the group’s full-year results would be considerably ahead of its 2006 figures.

Chairman Miles Emley said: “Our increasing focus on specialist, non-commoditised markets and our group sales initiative continue to deliver results.”

Edwards added the company would continue to reject work where the margins were unsustainable, but confirmed that St Ives could be looking for acquisitions in the future.