The Scotland-based Macfarlane Group, which has been trying to refocus as a distribution company after decades as a packaging manufacturer, sank into the red in the six months to 30 June, according to a report in the Glasgow Herald.
From its headquarters in Glasgow, the company reported and an interim pre-tax loss of £134,000 (€213,000), before costs, compared with £7 million underlying profit in the previous first half.
Iain Duffin, Macfarlane's chief executive, highlighted a 30 per cent drop in business with its electronics sector customers in the space of two years, although other sectors including its involvement in the food packaging sector remained steady. The company is now trying to reinvent itself by selling other firms products and related services.
John Ward, chairman, said difficult overall market conditions "continue with no indication of improvement in the short term".
Analysts have downgraded expectations for the full year results, but also expect the second half to show some improvement over the second half due to the sale of properties.
Macfarlane has continued its programme to restructure its manufacturing and distribution operations by replacing trading branches and manufacturing sites with "15 state-of-the-art regional distribution and fulfilment centres coupled with two manufacturing centres of excellence".
But the company has said that the restructuring is "taking longer to achieve and causing greater costs and disruption in the business than originally envisaged". Tougher economic conditions had also exacerbated the situation, the company claimed.
Duffin did however state that a slight "uptick" in the electronics packaging sector and further acquisitions were expected to strengthen the company's position in the immediate future. In the past successful acquisitions have included British Polythene Industries, back in 2000.
Macfarlane was unsuccessful with a £114 million hostile bid for Greenock-based rival British Polythene Industries back in late 2000.
The Macfarlane Group currently employs a workforce of 1320 people. The restructuring process will, by the time it is finished next year, have seen the group workforce reduced from more than 2,000 to just 1,200.