The UK's second-largest local newspaper group warned it could see "no discernible improvement in advertising revenues".
Despite the group growing digital ad revenues by 13.4% from £4.2m to £4.8m, the overall ad revenue figure excluding acquisitions was down because of a 9.2% decline in print ad revenues from £200.8m to £182.3m.
Recruitment and motors were the worst hit categories, while display was down and only property grew.
However, the group was able to point to overall revenue growth through acquisitions and tight control of costs as evidence it is "well positioned for any recovery in the advertising cycle".
The £160m purchase of The Scotsman Publications Limited, including The Scotsman newspaper, completed in January, helped first-half revenues grow 18% year on year from £264.6m to £312.2m.
It also achieved record operating profits of £101.6m, up 7.8%, but the cost of the acquisition and investment in new printing presses hit pre-tax profits.
The total circulation of the company's print titles is down, dailies more so than weeklies, although like-for-like circulation revenue grew 1.9% due to cover price increases. In contrast, the company's websites attracted 65% more unique users.
The company explained: "While management remains focused on actions to address circulation declines, equal effort is being placed on new product launches to layer our markets more effectively such that, when combined with our rapidly growing digital platforms, we deliver an increased total audience resulting in improved advertiser reach and response."
The new launches include more than 30 community newsletters aimed at small rural communities and selected suburbs of larger cities.
The company is developing a "newsroom of the future" in Preston where staff gather news for simultaneous release across a variety of print and digital platforms and generate audio-visual content.
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