The group’s operating and net results were also negative – a £4.7m loss and £3.5m loss respectively – although its adjusted EBITDA came in at £3.5m.

Chairman Mark Scanlon said that 2009 had been a difficult year, owing to weak advertising revenues, reduced paginations and smaller print runs and had not been helped by aggressive pricing by "certain industry participants".

He said: "Some companies have, regrettably, been forced out of business already. Others will follow. We do not intend to join them.  Our industry is suffering from weak demand and too much capacity, and there is no sign that the position will reverse any time soon.

"We will therefore continue to seek efficiency improvements in all areas in order to give our clients the service they require at the price the market dictates. In the medium term we believe there will be some adjustment in the supply-demand balance in our sector, and I have to say I am looking forward to the day when that happens."

Southernprint, which was acquired in July last year, contributed a loss of £733,000 including exceptional items on a turnover of £16.3m, while existing Wyndeham operations accounted for £59.6m of group turnover.

Walstead’s net debt increased from £30.8m to £35.1m, which the company said was the result of the Southernprint acquisition.

The increase included an additional interest free loan of £2.5m from Cigala, which is controlled by Walstead directors Mark Scanlon, Richard Fookes and Stephen Hargrave, on top of the £10m already owed to the limited liability partnership.

Meanwhile, the group refinanced and extended its £5.6m loan facility with Leumi bank to £7.1m, repayable by 36 monthly instalments of £197,222 commencing 1 June 2010, with interest currently charged at 3.5%.

Repayment of a further £5m loan from Landsbanki Islands, which had been due to commence in January 2010, has been pushed back to January 2011.