Community media company Archant, whose titles include the EDP and Norwich Evening News, has seen a fall in operating profits while continuing to invest in its future business development and generating increased digital media revenue.

company Archant, whose titles include the EDP and Norwich Evening News, has seen a fall in operating profits while continuing to invest in its future business development and generating increa-sed digital media revenues.

In a preliminary statement to shareholders, chairman Richard Jewson said results in the year to December 31, 2012, saw operating profit before amortisation and exceptional costs at £6.3m (2011: £10.4m) down 39.5pc, on full year turnover down 2.7pc at £131.4m.

Operating profit in the second half at £4.4m (2011: £7.8m) grew from £1.9m in the first half (2011: £2.6m), on turnover of £64.9m, down 4.2pc compared to the same period in 2011 of £67.8m.

Operating costs before amortisation and exceptional items, at £125.1m (2011: £124.6m) were up 0.4pc after absorbing increased costs of contract printing of newspapers, investment in business development, an increase in the size of the sales force and specific programmes of sales force training.

Despite the pressures on trading results, the business remained cash generative with cash flow from operating activities of £7.6m (2011: £13.1m). Net debt at the end of the year was further reduced to £15.7m (2011: £17.4m). Revenues from online activities increased to £6.4m in the year and were up 15pc in the second half.

He said following a recent tax case involving another company, provision has been made in the 2012 accounts for a possible payment to HMRC in respect of corporation tax and interest of up to £13m dating back almost 10 years.

He said there is likely to be further litigation before the position becomes clear, but if the company is ultimately required to meet these liabilities, it will do so within its existing banking arrangements.

The underlying post-tax loss, after one-off costs and the impact of an impairment charge of £4.8m, relating principally to the write down of the carrying value of certain acquired newspaper titles, stands at a loss of £2.2m (2011: loss £1.5m).

Mr Jewson said: 'Archant has had a challenging year, but has remained profitable and cash generative, whilst making real progress in strengthening its traditional products and in generating increased revenues from digital media.

'These show through in a satisfactory start to the current year.'

Archant's annual meeting takes place at noon on Tuesday, April 23 at the John Innes Centre, on the Norwich Research Park.