Those tough conditions mean that, despite the firm becoming Emap's primary print supplier, it is planning further restructuring to control costs.

"The print market is not sustainable as it is," said chief executive Barry Hibbert (pictured). "Companies will start going to the wall soon and others will look to take advantage of mergers and acquisitions."

Commenting on a previous promise that Sheffield would deliver a "step change" in profitability, group finance director Peter Johnston said: "All things being equal, we would have seen a step change, but the state of the market hasn't been as beneficial as we'd hoped."
He added that the full benefit of Sheffield would be seen in 2006. The site's fourth press, a unit moved from Purnell, will be running in the next three weeks, with the fifth, another secondhand machine, running in four months' time.

Polestar is planning further restructuring to address "depressed" trading conditions. It has received a provision of 100m from Investcorp for investment and restructuring. This is on top of the 95m in 2005, of which 70m was spent on Sheffield. Some of the money will be used to repay bank debts with 16m to be spent in 2006 and a further 42m in 2007.

The firm has begun discussions with staff and unions at Varnicoat and Greaves about improving productivity.

"Our legacy plants need to be equally competitive, especially with the loss of the News International contracts," said Johnston. "There are question marks hanging over Greaves and Varnicoat in the future it's a very stark reality."

The company is also addressing its web offset capacity and efficiency. "We will be looking at shift patterns and press efficiency," he said. "Where necessary, we will take out shifts and presses."

Polestar results
Turnover from continuing operations
2005: 375.9m
2004: 381.2m
(%): -1.4

Operating profit from continuing operations
2005: 20.3m
2004: 14.9m
(%): +36.2

EBITDA from continuing operations
2005: 71m
2004: 65.4m
(%): +8.6

Turnover
2005: 428.1m
2004: 474.7m
(%): -9.8

Loss on ordinary activities before tax
2005: 126m
2004: 121.9m
(%): +5.8

Loss on ordinary activities before interest
2005: 43.5m
2004: 47.8m
(%): -9.0