Express Newspapers saw operating losses of £1.1m last year, its latest figures reveal.
The company, which publishes the Express and Star titles, blamed a 25 per cent increase in newspaper costs – accounting for additional expenditure of £10.5m.
In 2010 the newspaper group had an operating profit of £335,000.
Over the last year, staff costs remained stable at £49.8m, but earlier this year the company announced plans to make up to 100 staff redundant including around 70 journalists.
The proposals, which have already seen several high-profile figures leave the Express and Star, are part of a £5m cost-cutting programme.
Between 2010 and 2011, the number of staff employed by Express Newspapers rose from 502 to 505.
Despite the operating loss, turnover rose 5 per cent in the 2011 financial year to £228.7m
Financial profit stood at £26.7m for the year ended 31 December 2011, but this was down to an expected tax rebate of £28.4m.
Express Newspapers reported that this was due to an adjustment to the amount paid in previous years.
In the director’s report accompanying its accounts filed at Companies House, the company said it was committed to ensuring its papers were competitively priced, despite cover price reductions resulting in costs of £20.3m last year.
In May, Express Newspapers’ parent company Northern & Shell, which owns the Channel 5 network, reported a 40 per cent rise in group turnover to £688m in the 2011 financial year and profits of £40m.
N&S said the figures were powered by the first full-year contribution from Channel 5 since its acquisition in July 2010, with revenues up 23 per cent to £353m in the 12 months to 31 December. The broadcaster reported operating profits of £26.1m in 2011.