SMG, the Scottish Media Group, ran up a loss of £84.6 million last year. Heavy writedowns relating to Virgin Radio and Pearl & Dean, coupled with detoriating ITV advertising revenues meant that the business had a difficult year.

There was no word on the expected £60 million sale of Virgin Radio to privately held Absolute Radio, and an outlook statement that showed no growth in national television, radio or cinema advertising, except in the area of regional Scottish television campaigns.

A total of £49.2 million was written off against the value of Virgin Radio — once acquired for £225 million by previous management — although the rock and pop radio network did increase profits in 2006 by 87 per cent to £4.3 million, helped by improved advertising and lower AM licence fees.

SMG said that the sale process was making "good progress" and the company reiterated that it was "not a forced seller". However, a sale is expected to be announced soon, as the company reduces its business to concentrate on Scottish television.

A further £15.4 million provision was taken against losses at Pearl & Dean's cinema advertising contract with the Vue chain.

The core Scottish television business — the two ITV1 franchises covering both the lowland and highland regions of the country — saw its earnings tumble 30 per cent to £11.1 million after revenues eased 6 per cent to £119 million. Peak time audiences were 26 per cent, ahead of BBC One's 22 per cent.

Advertising revenues marginally outperformed the rest of the ITV1 network, but the operation was hurt by a contract with Setanta Sports to produce its Scottish Premier League coverage. That contributed to a £1 million loss in the group's television ventures unit, the home to its outside broadcast activities.

This year began with regional television airtime sales up 14 per cent in the year to date, although that progress is tempered by a 2 per cent decline in national campaigns that run across ITV. Virgin Radio advertising is roughly flat after a weak April countered a healthy first quarter. Pearl & Dean is down 11 per cent following a period of poor film releases.

Rob Woodward, the chief executive, said that 2007 was a year of "commercial and creative restructuring". Brought in to turn around the debt laden company, he has already cut borrowings with a £91 million rights issue and the £47 million sale of the company's outdoor advertising business Primesight.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive