Andrew Flanagan: "A tough year"

The release of the group's results was delayed by a month as it sought to conclude negotiations to restructure its debts.

As at 31 December, SMG's debts were �394m, but, on Thursday, it said it had successfully renegotiated its borrowing facilities until June 2003.

That means shareholders will receive a total dividend of 3p per share, down on last year's 6.8p payout.

SMG chairman Don Cruickshank said advertising had yet to show any major signs of recovery.

But he added: "Encouragingly, the market is becoming more predictable and buying activity is reverting to more traditional patterns."

SMG runs the Scottish and Grampian ITV franchises and owns Virgin Radio after striking a deal with Chris Evans in 2000.

Its newspaper interests include the Glasgow-based Herald, Sunday Herald and Evening Times. The group also has a cinema and billboard advertising arm.

Mr Flanagan refused to comment on recent speculation that SMG had received approaches for parts of the group, although he conceded: "There are a lot of bottom-feeders out there who will try and get it on the cheap."

SMG said Scottish and Grampian TV had renewed their ITV licenses until 2011, although a "harsh" increase in the cost had hit profits.