Johnston Press has announced record results for 2005, and an operating profit of £177.7m.

The group said the growth in pre-tax profits - to £151.4m - had been possible due to tight cost controls and increased business effiencies, as well as developing new revenue streams.

It said that despite a significant downturn in recruitment advertising - which fell by 17.3 per cent - overall revenues for the year were £520.2m, up 0.2 per cent on 2004. Operating margins achieved a new record of 34.7 per cent, compared with 34.1 per cent in 2004.

The group now publishes more than 300 local newspapers, boosted by a number of acquisitions in 2005, including Scotsman Publications and Score Press Ltd.

Excluding its new titles, advertising revenues for the year fell by 3.7 per cent, in a trading environment which chief executive Tim Bowdler described as "more difficult for the regional press than at any time since the early 1990s".

He said: "Against this challenging background, compounded by an increase in newsprint prices, it is pleasing to be able to report another set of record results.

"2005 was also a notable year for acquisitions with major advances in both Scotland and Ireland. Our digital publishing activities continued to exhibit strong growth, our major capital expenditure programmes remain on track and our ongoing organic growth plans delivered over 50 new publications in the year."

About half of the group's income comes from the sale of classified advertising, and during 2005, property advertising grew strongly, up 13.7 per cent, while motors fell by 5.2 per cent, but the group said there was a significant reduction in spending by companies and the public sector seeking to recruit staff.

Total online revenues increased by 32 per cent to £8.3m, producing a contribution to profit of £5.8m.

Chairman Roger Parry said the group believed the drop in recruitment advertising was "cyclical rather than structural" and reflected a general slow down in the economy rather than migration of spending to websites.

But he said the board of Johnston Press recognised that web-based recruitment advertising was attractive to employers and was devoting significant management time and resource to the continuing development of its own web-based products, including its CV matching service which saw revenues of £1.1m.