The parent company of post-production facility Blue, film specialists TMR and commercial post house K Post has blamed the recession in advertising, a drop in programme budgets and a poor economic climate for the UK film industry as contributors.
VTR Plc's managing director, Paul Tracey, insisted that the company's activity had not declined but pressure on their rates had increased. "Clients are much tougher in negotiating because they themselves are being severely squeezed," he said.
Tracey added that while the financial figures were "very disappointing" they were not unexpected and the company had warned its shareholders that figures would be poor this year.
VTR has consequently restructured its management division and cut staff in other roles by around 40 through "a combination of natural wastage and redundancies" across all its subsidiaries, slashing costs by£1.9m. Tracey added there were no more planned redundancies and that "£2m of cost-cutting is enough".
It's the second restructure the company has gone through in just over a year. Former managing director John Banks, who resigned in May, restructured the group in August last year, cutting 12 jobs.
Tracey said that the company is now looking closer at revenue streams in the fields of new media, digital asset management, content management and delivery, and mobile technology.
Tracey revealed that VTR is seeking to move from the stock market to AIM and an EGM will take place on 1 December to discuss the plan. The move is expected to take place - subject to shareholder approval - in January next year. VTR Plc's finance director, Peter Samengo-Turner said the move would benefit VTR Plc because being on the London Stock Exchange, the company is "too small to be on any main shareholder's radar".