The US suffered a 20% drop in sales this year, largely down to the consolidation of Florida plants at the end of the last financial year.

However, between August and May, total sales grew by 4.6% on the previous year, with Service Graphics, which it acquired in November 2006, posting a growth rate of 9%.

The statement said: "Overall market conditions have been more challenging than we had expected when we issued our half-yearly statement, but we continue to seek ways of reducing cost and increasing revenues to mitigate the effect."

Since 1 February 2008, demand for books has remained steady, according to the company, which warned that, although new contracts for magazine printing were being won, pagination was unpredictable.

Sales in the company's multimedia and music division were down but Brian Edwards, chief executive of the company, would not be drawn on plans for a disposal of this business, saying a sale of its Dutch music division remained "under review".

He added that the company had no plans to move into colour book printing at its Clays site, despite the demise of Butler and Tanner.

"With mono work, there is a time sensitivity which means that it has to be produced locally," he said. "With colour work there does not tend to be so many repeat runs meaning that it can be printed at a lower cost elsewhere."

The transition of work under the Royal Mail contract (announced in October 2007) will be completed by the beginning of July 2008.