The Daily Sport, which relaunched on April 21, experienced a severe fall in sales during the early part of May, but showed signs of recovery during the latter part of the month, according to the group's trading update.
said that the daily's circulation is now averaging around 85,000 copies.
The company's share price fell 14.3% this morning to a low of 18p, down from 70p a year ago.
The group said in a statement: "The initial reaction to the re-launch has been disappointing, although the board remains confident that the revised style of the paper will attract new readers and advertisers.
"However the board also recognises that this may take longer, and require more promotion than previously expected."
Sport said that as a result of the continued decline in sales, pre-exceptional pre-tax profit for the year ending July 31 will be lower than current market expectations. However, the group said that pre-tax profit should hit in excess of £6m.
The group said that its outlook for 2008/9 remains positive because "the benefit of a full years' trading from the Sport, significant cost reductions already implemented, and enhanced cross-selling opportunities between the interactive business, the newspaper and the newly acquired magazine titles, will be fully realised for the first time".
However, in response to the company's recent poor performance, the board is undertaking a strategic review of all options regarding the future of the group.
Andrew Fickling, group chief executive officer, said: "The reaction of our share price during the period since the acquisition of the newspaper business (in September 2007) has been a cause of concern to the board, and we are now reviewing all the options for the group's future.
"Further updates on this will be provided as necessary."
Simon Hume-Kendall, non-executive chairman, is stepping down from the his role at at the group once the strategic review has been completed, but will remain on the board as a non-executive director. Hume-Kendall said his decision was due to increased business commitments.
Separately, for £125,000 in cash and has agreed to repay loans totalling £140,000 made to Flip by its previous owners.
Flip owns the monthly lad's magazine Front, which has a circulation of over 40,000 and is sold throughout the UK, as well as overseas.
_1.jpg)
.jpg)
