He said some medium-sized printers were "already in critical positions" and that failures should ease the problem of overcapacity.

Polestar has revealed a 42.1m hit in exceptional costs relating to the restructuring of its operations for the year to 30 September 2001.

Its turnover for the year rose 8% to 535.4m, including a 22.5m contribution from its Spanish operation, HelioColor. But its pre-exceptional EBITDA fell 28% to 63.7m.

Hibbert said Polestars results were in line with the rest of the industry.

A fall in advertising has resulted in reduced pagination, cancellations and increased price competition, and it is clear that in this environment only the fittest will survive, he added.

During last year Polestar invested 30m, including a new press at gravure site Purnell. Investment this year includes a group-wide CTP rollout and a new 64pp MAN Roland web.

Since its year end Polestar has received a 73m cash injection, which it said demonstrated the continuing support of its bankers and major shareholder Investcorp.

Its financial restructuring led to a 96m profit that will be recognised in its results for the year to September 2002.

Hibbert said Polestar planned to improve financial performance this year through its "demanding" operational efficiency plan, which has so far led to restructuring at Greaves and Chromoworks.