A No 1 album for artist David Gray gave Chrysalis a lift in September

Pre-tax profits before one-off items sank 72% to �2.7m ($4.72m) over the year to August, while turnover dipped to �133.6m from �136.7m.

The group's radio operations fared particularly badly amid an unexpectedly weak advertising market with total revenues down 7% to �62.9m.

Chrysalis is the UK's fourth largest radio group.

It owns the Galaxy stations around the UK as well as LBC in London and the capital's most popular commercial station, Heart 106.2.

2005 was a difficult year for the Chrysalis Group Richard Huntingford, Chrysalis chief executive Check Chrysalis Group's shares

Many media outlets have been feeling the squeeze from the rise in online advertising.

In April this year a report from the Interactive Advertising Bureau revealed the amount of money spent on internet advertising in the UK had exceeded the amount spent on radio ads for the first time.

Online advertising's take jumped 40% to �653.3m in 2004 from a year earlier - representing 3.9% of the total spent by advertisers compared with the 3.8% that went to radio.

'Difficult year'

Chrysalis said that its advertising fortunes had worsened during the second half of its financial year.

"2005 was a difficult year for the Chrysalis Group, reflecting advertising conditions in the UK and continuing problems with our books division," said chief executive Richard Huntingford.

The group also blamed the cost of restructuring its music recording business for the "disappointing" results.

In an effort to turnaround its fortunes the group last week announced it was selling its loss-making books division to managers of the unit for �12.5m.

The division lost �2.8m in the year to August 2004, on sales of �27.4m.

Mr Huntingford said he was confident about the group's prospects after a good start to the current financial year from its music and radio divisions.

Chrysalis Music had been given a boost by a number one album for David Gray while Chrysalis Radio revenues have risen 4% in September and October.

"(This) gives me confidence that the current financial year will be a successful year," Mr Huntingford added.