Profits at Forfar textile firm Don & Low fell by more than 80% before the firm announced job cuts earlier this year.
Newly filed accounts show sales remained steady at £64.9 million for the year ending December 31 but pre-tax profits fell from £3.7m in 2017 to £588,000 last year.
In June the Glamis Road firm told hundreds of staff that their jobs were at risk as they planned to axe 55 roles due to tough trading conditions.
The job losses were blamed on a shift in consumer tastes towards hard flooring as impacting on demand for carpet backing – one of the main products produced by the Angus base’s technical textiles division.
“Both internal and external factors affected performance during 2018,” company secretary Colin Johnson said in the strategic report within the company accounts.
“The results for the year, although disappointing, reflects the ongoing transitional period as new investments become established and significant capital expenditure will continue in 2019.
“The group also faced raw material price increases during the year and general trading conditions remained challenging.”
The firm, which employed around 500 in Forfar before the round of redundancies, saw its operating profit before exceptional items fall 58% last year from £4.5m in 2017 to £1.9m.
More than £20m has been invested into Don & Low over the past two years as the company sought to move into more technologically advanced markets with higher barriers to entry.
Most of these investments are in production processes that are less labour intensive.
Mr Johnson said the firm was making “good progress” on its plans to expand and upgrade production capabilities.
He added: “The directors expect to be faced with continued economic and market challenges during 2019.
“However capital expenditure projects that are designed to improve capabilities, cost structures, competitiveness and long term performance will reach a milestone during the year and significant additional capacity will become available.”
The company can trace its roots in Angus back to the 18th century, when a cloth business under the name William Don & Co was formed in Forfar in 1972.
In 1999 Don & Low was acquired by Thrace Plastics, part of the Greek-based Thrace Group, which has 20 firms worldwide.