While group sales of £26.3m were only marginally down on the prior year (2014: £26.5m), gross profit margin dropped 2.2% as sales of higher margin products "notably business cards" declined and were replaced with lower margin sales.

This had a direct impact on underlying operating profit, which at £1.2m was less than half the £2.5m Tangent posted in 2013/14, and pre-tax profit, which was also impacted by higher redundancy and restructuring costs totaling £589,000 and a one-off relocation expense of £119,000 relating to the group's London-based businesses.

Tangent chief executive Timothy Green said: "2014/15 was a challenging year for Tangent; our profits were down and performance in certain areas of our business fell short of expectations.

"People and businesses will continue to buy more print online and the range of products they demand will expand. Tangent remains well positioned and committed to grow its share of this exciting marketplace.

"We are moving towards a more streamlined approach to the online print market to allow us to maximise our potential and ensure we are providing our customers with the best possible choice, value and experience."

Goodprint, the specialist online business cards printer that Tangent acquired in 2012 for £10.2m (£6.8m net of cash), continued to struggle and suffered an "acute" decrease in sales for business cards, down 34% to £2.1m (2014: £3.2m).

In Goodprint's last results prior to its acquisition by Tangent it posted an underlying operating profit of £1.2m on turnover of £4m across its two brands: Goodprint in the UK and Smileprint in Europe.

Following the acquisition, Green said: "Goodprint will sit alongside the existing Printed.com business to create a multi-brand web division."

However, having already rationalised Goodprint's production into its Newcastle print facility, Tangent now intends to merge Goodprint's brands with its own Printed.com brand. It will also no longer report the performance of the business separately and will instead report the combined performance of its online businesses Printed.com, Goodprint, Ravensworth and T/OD.

Collectively, these three businesses reported sales of £17.2m (2014: £15.9m), excluding inter-segment sales, and underlying operating profit of £899,000 (2014: £1.8m).

Ravensworth was said to have benefitted from a strengthening in the residential property market in the early part of 2014, before suffering from a significant cooling of the market, which resulted in sales from October dropping 20% below the trend for the first eight months of the financial year.

While sales for the year were up 12.4% at £7.5m, the cooldown from October onwards "severely impacted profitability in the business"; Tangent said that costs had now been reduced to reflect current business levels.

Tangent's digital marketing agency Tangent Snowball suffered an 18.5% drop in revenues to £6.7m as a result of budget cuts from two key clients at the start of the year and the divestment of its Australian operations. Tangent said that it was starting to see the benefit from reduced headcount at the business and that "senior management changes" had taken place.

The group warned that while it had started the current financial year in line with expectations, "profits are anticipated to be lower year on year in the first half".

Tangent's share price fell 25% to 3p in early trading, before recovering to 3.65p at the time of writing (down 8.75%).