The group, which owns Virgin Radio, The Herald and Scottish Television, blamed the slowdown in global advertising markets for the 33.3% drop in profits, as reported in its interim results.
Behind the fall in profits were, SMG said, the increase in costs of ITV licences for its Scottish and Grampian stations; the foot-and-mouth outbreak for the loss of revenue on its Scottish Farmer title; and the dotcom collapse.
Hardest hit of SMG's divisions was television, which saw an 11% drop in airtime revenues -- slightly better than the average of 15% for ITV as a whole. The radio division also saw decreases in revenues of some 20%.
Publishing fared better, with advertising revenues growing by 3% for the period. Overall turnover fell from £152.7m to £139.7m for the period, a decrease of 8.5%.
Andrew Flanagan, chief executive of SMG, said, "This is the toughest advertising market of recent times, and visibility is poor enough to make predictions unwise at present."
He added that the group was making cost-reduction measures early, including postponing recruitment and freezing management salaries.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .