Profits were down from £10.5m last time as group turnover for the first six months to June 30 fell to £86m from £91.9m last time, which the company attributed to the continuing slump in national advertising.
The company said a fall in airtime sales at Virgin Radio contributed to a fall in operating profit to £11.3m, while earnings before tax, depreciation and amortisation fell to £19m from £24.7m a year ago.
Andrew Flanagan, chief executive of SMG, said: "The early part of the summer saw a continuation of the weak advertising markets that have been a feature of the first half, but we are cautiously optimistic about the second half of the year, where we are already detecting signs of significant improvement in each of our businesses."
However, Flanagan offered caution, saying that SMG believed that it was too early to take a view on whether or not this is the start of a sustained upturn.
The company recently completed the sale of its regional newspaper division, including the Herald in Glasgow, to US media firm Gannet for £216m. This helped reduce its debt, which a year ago stood at £400m, by 40% to £246m.
The company said the disposal had provided it with sound "financial footing" and that the company would be in a good position to take advantage of an improvement in the ad market when it comes.
"Overall, we anticipate a satisfactory performance for SMG in the second half of 2003, outperforming the first half. As the UK advertising markets recover, SMG will be well placed to generate faster growth," the company said.
During the period, the company also emerged the victor in a very public legal battle with former Virgin Radio owner and DJ Chris Evans. Evans paid the company a settlement of £7m after taking it to court over his departure from his job presenting the Virgin Radio breakfast show.
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