In an interim management statement this morning, the group, which owns titles including the Yorkshire Post and Lancashire Evening Post, said total advertising revenues fell 10.6% in the 18 weeks to 7 May.

However, advertising performance, while still below last year's levels, has improved in the second quarter of its financial year compared to the first quarter.

Public sector cutbacks contributed to a 30% fall in jobs advertising in the first quarter. But Johnston Press expects the impact of this to reduce throughout 2011, and said full-year results should be in line with current market expectations.

The company also warned that the cost of newsprint was 'significantly' higher than last year.

John Fry, Johnston Press chief executive, said: "We had an increase in newsprint prices last July of about 10% then another increase in January of about 20%. Pricing for the second half of this year hasn't been fixed yet and where it moves next I wouldn't want to predict.

"The cost of fibre has also been going up because of demand from the Far East and fibre is needed for recycled newsprint.

"We're trying to cut waste in all sorts of ways, such as making sure we supply the right quantities of newspapers and focusing on waste in printing plants.

"We've been through a period of printing closures and have consolidated to two very large main sites [in Dinnington and Portsmouth] and some slightly smaller ones.

"We don't print anymore in Scotland and have outsourced it to News International and Trinity Mirror, but we have taken in work from News International and Daily Mail Group in England."

In March, Johnston Press announced that Fry would step down within a year. The company has appointed headhunters to look for his successor, but he said it was "too soon" to reveal progress.

The group also said it should save £500,000 in interest costs this year after bringing forward a £20m reduction of its debt facilities from June 2012 to 28 April 2011.

Net debt stood at £388.7m at the end of April, compared to £419.1m at the same time last year.

The company's share price rose 1%, to 8p, following the interim statement. But it is still well below levels seen this time last year, of around 30p.

Johnston Press has seven printing centres around the UK and, as well as printing its own newspapers, prints titles under contract for publishers including News International. Its two main print sites are in Dinnington, near Sheffield, and Portsmouth.