Montgomery Litho, the Glasgow-based printing group, has been pushed back into the red and is slimming down its East Lothian plant having already closed its facility in Perth.

The group, which reported a turnaround in 2010 from a £279,000 loss to a £151,000 profit, slid to a £1.2 million pre-tax loss last year, according to accounts just lodged at Companies House.

Employee numbers were down from 368 to 310. Debt was more than halved, from £1.3m to £638,000, but shareholder funds also halved, from £2.07m to £1.04m.

Turnover fell from £24.2m to £19.9m as the company lost a major contract with Aviva, principal customer for its Perth operation.

Montgomery had already sold and leased back its headquarters in Elliot Street, Glasgow, and reduced wages as a temporary measure, but now finds itself having to make deeper cuts.

The annual report shows plans to reduce payroll costs from £7.8m at the end of last year to £6m this year and £5m in 2013, with the Haddington, East Lothian, facility taking the brunt.

It says sole director and 99% owner Thomas Montgomery has been "substantially reducing the company's cost base" with a redundancy programme at Haddington and "other redundancies where costs could be trimmed from the business".

Andrew Montgomery, an executive based at Haddington and brother of the owner, commented: "We recognise the market is challenging and we have reacted to that. We have a long history of investing that has stood us very well because we have the latest equipment in the industry ... that has helped us to continue on an even keel."

Montgomery Litho is the largest book printer in Scotland and customers include Pearson Education and the Folio Society. Two years ago it pushed into the direct mail market and developed a crossmedia marketing product for customers.