Smiths News has reported a 0.3% drop in total revenues despite increased newspaper and sticker collection sales.
Despite the decrease, trading was slightly ahead of expectations because of contracts from News International gained earlier than expected, the newspaper and magazine wholesaler said.
"Newspaper sales have increased year on year, benefiting from a number of recent price rises and from contract gains achieved across the past year," added CEO Mark Cashmore.
"The magazine market continues to prove more challenging with sales down on last year, although sales of sticker collections have been particularly strong."
Last month, the wholesaler opened a £1m distribution centre in South Wales. It plans to relocate its Cardiff and Bridgend businesses there by the end of February.