A packaging manufacturer has fallen into the red after a business restructure which cost £1.3 million.

The London Fancy Box Company, based in Dover, made a loss of £414,000 last year, after making a profit of £28,000 in 2013.

The firm, founded in 1894, conducted a business review in the first three months of the year to reduce overhead costs and put tighter controls on direct costs.

The move came as turnover declined by more than £800,000 to just under £18 million last year, according to accounts filed to Companies House.

The restructure actually meant gross profit increased to £818,000 but the exceptional cost of the £1.3 million restructure forced the company, which employs more than 190 people, into loss-making territory.

Director Matthew Lawson said the strategic review had led to a “strong improvement in operating profit despite a small reduction in volume”.

He said: “In June, the company entered into a supplier financing arrangement with a major customer which is the principle factor behing a significant reduction in year end trade debtors.”