The company, whose titles include the Yorkshire Evening Post and the Sheffield Evening Star, said advertising revenues for the six months to late June rose by just three percent compared with the same period last year.

Johnston said ad sales were buoyed by strong growth in property advertising, partially offset by weaker growth in advertising by businesses.

But Johnston chief executive Tim Bowdler played down hopes that the market was poised for recovery, saying he expected "continued modest advertising revenue growth" in the months ahead.

Profits bounce

Newspapers and broadcasters have been hit hard by a steep decline in advertising spending over the last two years, with businesses reining in their marketing budgets in response to global economic uncertainty.

The fall off in advertising revenues contributed to the collapse of pay TV service ITV Digital last year, and has also helped push the Financial Times newspaper into the red.

Last week, Martin Sorrell, head of advertising giant WPP, held out hope of a recovery, saying conditions in the US had shown signs of improvement over the last six months.

Advertisers are hoping that the global advertising market will pick up next year in the run-up to Presidential elections in the US and the Olympic games in Athens.

Johnston's advertising update came as the company unveiled first half pre-tax profits of �66.7m ($107m), 51% up on the same period last year, and ahead of City expectations.

The increase reflected tight cost controls and the succesful integration of earlier acquisitions.