Most notably, freesheet thelondonpaper posted a loss of £16.5m for the first 10 months of its operations. It generated revenues of £8m, or around £35,000 per issue, during the period.

The circulation of thelondonpaper continued to rise however, outstripping its rival London Lite – published by Associated Newspapers – by more than 100,000 per issue. A sign, the company claimed, that it is winning London's freesheet battle.

Turnover at its subsidiary News Group Newspapers, which publishes the Sun and the News of the World, fell by £20m in the last financial year to £623.3m, caused in part by declining sales of the Sun and continuing price-cutting in the Scottish market.

Advertising sales were down slightly due to the absence of a major sporting competition during the year, the company said.

A statement said: "In common with other newspaper groups, the company faces challenging advertising markets in the short term, and a wider competitive set, particularly from the internet in the longer term."

At the same time, its consumer magazine publishing arm, News Magazines, which publishes Love it! and the Sunday Times Travel Magazine, lost almost £10m in the year, citing "challenging advertising conditions".

However, sales within the Times Newspapers division, which publishes The Times and The Sunday Times slashed its losses by half to £43.9m, with turnover rising 2.5% in line with improved circulation.

It is expected that results for the coming year will improve following the company's opening of the printing super site in Broxbourne, Hertfordshire.