Regional media company Archant experienced an overall revenue increase of 2.1 per cent at £98.5m, and an increase in total operating profit of 8.6 per cent at £10m, for the six months ending on June 30.

But its operating profit in newspapers and printing for continuing operations was down 1.1 per cent at £12.9m, reflecting inflationary pressures on costs and further investment of £0.6m in online activities, costs which were offset by productivity improvements.

Newspaper and printing revenue for continuing operations was up £200,000 - 0.4 per cent - at £69.1m.

Archant claims that there are signs of positive sector news with the announcement of its interim results statement.

Chief executive John Fry said that recent negative sentiment about the sector, and high profile disposals, had given the misleading impression that regional local publishing was in decline.

He said: "The challenge is greater than it has been but that doesn't mean that the sector is fundamentally flawed.

"Archant has put considerable strategic focus on changing our business to deal with changes in local market places.

"We have demonstrated that tight cost control, on the low growth areas of the business, allows you to invest in higher growth activities.

"Our web audiences are growing in excess of 60 per cent a year. The advertising revenue we generate from those audiences is also growing.

"Our local magazine business is showing audience growth, revenue growth, and an increasing number of the titles delivering profits as they become established."

Archant has been specialising in the development of a layered strategy of products after realising that although newspapers continue to be an important part of the local mix, many advertisers and consumers also want a range of complementary products.

The Norwich-based company now offers "quality" classified websites tied closely to its print and online brands.

The recruitment category, one of the toughest for the regional press, is showing solid growth at Archant, helped by online revenues.

John Fry said: "We expect the modest recovery in our markets, and our performance, to continue in the second half, although we are concerned about the potential impact of increasing interest rates and high levels of consumer debt on the housing market and consumer spending.

"As our digital platforms improve we have a growing confidence that we can develop increasing and significant revenue streams from them, in both classified and display advertising.

"We also expect the strong growth in our Life magazine business to continue."