The publishing giant recorded a £54.5m profit on a turnover of £331m to 1 January 2012. In 2010, its £323.8m turnover produced £58.9m of profit.

According to TMG, the fall in profit was down to the rising cost of newsprint, which shows no sign of decreasing, and investment in its digital division.

It said: "Our total revenues increased 2.2% with growth across our advertising, digital and consumer revenue categories. Circulation revenues, benefiting from cover price increases, remained flat year-on-year (in November the cover price of the Daily Telegraph increased 20% to £1.20).

"The improved revenue performance was impacted by a significant increase in newsprint costs. The company has continued with significant investment in digital during 2011."

Looking forward, the company anticipates a "difficult" 2012, with advertising still a challenge, despite buoyant market periods, such as the Queen's Diamond Jubilee and the London Olympics.

In its results, TMG also noted that the circulation of both its flagship titles, The Telegraph and Sunday Telegraph, decreased year-on-year. The Sunday title suffered a large drop, from an average of 508,604 copies to 483,490, while the weekly title went from 672,874 to 620,947.