According to the company, the goodwill impairment was necessitated by the "challenging market conditions" that have put "significant pressure" on both volumes and pricing in the printing market.

The £179.6m loss, which was down more than 380% on the previous year's loss of £37.3m, also included costs of £24.3m primarily relating to "redundancies, business reorganisation costs and vacant site costs".

External borrowings for the year ending 30 September 2008 totalled £168.7m, however, a major restructuring of the group's finances was completed on 25 November that year, resulting in a substantial strengthening of its balance sheet.

As a result of the restructure, Polestar's owners, which include JPMorgan, Bluebay and Contrarian, agreed to swap £165.7m of external debt and accrued interest for ordinary shares in the group's parent company, Ink Acquisitions Limited.

Following the debt-for-equity swap, £3.4m in previously capitalised debt issue costs will be written off in the company's next accounts, for the year ending 30 September 2009.

Group finance director Peter Johnston said: "The balance sheet of Polestar is much stronger now than it has been in its entire history. [However] there is a significant amount of lease debt still on the balance sheet and the priority is to pay that off.

"Most of that will be paid down in the next two to three years, and the sooner it gets paid down the sooner Polestar's liquidity will return, [leaving] it poised to take advantage of whatever opportunities present themselves."

For more, see this week's PrintWeek.