Richard Desmond's parent company RCD1 Limited, owner of the Daily Express and OK! magazine, today announced annual pre-tax profits tumbled 25% to £41.6 million as recession hit margins.

Revenues at the privately held group, which also publishes the Daily Star and operates adult movie channels, was slightly down from £485 million a year earlier to £483.9 million.

Accounts filed at Companies House warned that turnover and operating profits in the year to 31 December 2008 fell in the “highly competitive” pay TV market — partly because of “the growth of unregulated material on the internet”. Pre-tax profits at the broadcasting arm fell to £5.8 million from £8.2 million a year earlier.

Desmond's firm said it was increasing its telephone pay services, which accompany its TV channels, to boost profits.

Publishing activities in the UK and overseas, apart from the United States, generated pre-tax profits of £45.1 million, down from £71.2 million a year earlier.

US publishing activities, which include American OK! magazine, recorded a pre-tax operating loss £14.2 million, which was better than the £18.1 million loss a year earlier. The directors of RCD1 said overall performance was “highly satisfactory”.

Many other media firms have admitted profits crashed last year as advertising fell and some, such as Trinity Mirror, have posted an annual loss.

RCD1 paid no dividend and Desmond paid himself a salary of £641,000, including pension. This year's Sunday Times Rich List estimated him to be worth £900 million and has paid himself more than £200 million since his subsidiary company Northern & Shell bought the Express and Star in 2000.

Desmond's company also took a decision to switch £114.4 million of surplus cash into short-term government bonds last year.