The commercial, magazine and book printing plc reported sales to 29 July 2005 of 419.5m (2004: 410.3m), while underlying pre-tax profit was almost unchanged at 39.1m (2004: 39.7m).

Pre-tax profit was down to 11.4m from 14.9m after 27.7m of charges for exceptional items and goodwill, including 14.1m relating to the sale of Johler Druck and 9.9m for the consolidation of its UK operations, including the closure of Caerphilly.

The results include an initial 46-week contribution to operating profit of 4.15m from SP Group, which was acquired last September.

Chairman Miles Emley said that the group continued to face little growth, downward pricing pressure and over-capacity in most of its markets, apart from books and Point of Sale (PoS).

Sales in books were up 8.6%, which was partly but not wholly down to a boost from Harry Potter 6. Direct response, commercial and point of sale suffered from a sharp reduction in mailings from financial institutions but PoS remained steady.

Demand for financial products was low in the UK but paginations were generally up in report and accounts, due to the introduction of new financial reporting procedures.

Magazines sales were "modestly reduced," said group managing director Brian Edwards and the sector remained over-supplied and price competitive.

To offset the tough trading climate, the group would continue to focus on adding value and offering products other than just print, said Emley.

"Are we going to put in a third 100m gravure plant? Not on your life," he added.