Archant, which publishes 85 weekly newspapers and four daily titles, said a strong performance in its contract magazines, which includes Property Mart and Agricultural Trader, contributed to a 23.7% year-on-year rise in profits at the division to £6.1m. The group described its 2006 results as a "robust performance in challenging conditions".
The group said its decline in profit margins was attributable to a sector-wide downturn in ad revenue in 2006, but said the market picked up in the second half of the year.
Richard Jewson, chairman of Archant, said that media fragmentation was continuing throughout the regional newspaper market, prompting the company to invest more in online media. Archant said web traffic had risen by 66% year on year across the group's digital assets, with 1.2m unique visitors recorded in January 2007 alone.
Jewson said: "The company has produced a robust performance in challenging conditions. While advertising revenues were still down on 2005, performance in the second half improved as the rate of decline in advertising revenue slowed.
"We expect conditions to remain challenging in 2007, with advertising demand likely to remain flat and costs, including salaries and newsprint, continuing to rise."
Jewson's statement emphasises an overall performance downturn in the regional newspaper market in 2006. In last week's six-month ABC figures for July to December, only two regional titles recorded a year-on-year circulation rise -- the Scunthorpe Telegraph and The Oxford Times.
In January this year, Archant sold off all of its 15 weekly Scottish regional newspapers and magazines to The Scotsman's owners Johnston Press for £11m. The portfolio includes Ayrshire Extra and the Fraserburgh Herald.
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