Chrysalis, one of the UK's last big independent music groups, warned on Friday that profits had been hit by poor sales on some new releases along with consumers' reluctance to spend.

Abortive attempts to find a buyer for the group, which has sold off its radio, TV and book businesses, had already weighed heavily on its interim performance.

And the company was further undermined by a warning that a key measure of profitability would fall over the year for the first time in a decade.

With a roster that includes the early works of Blondie and David Bowie, Chrysalis had hoped to emerge from a difficult period and return to former glories.

Yet the company, which boasts some of the most critically acclaimed artists on the contemporary scene such as Four Tet and Mogwai, has suffered poor sales of some new releases.

Chrysalis expects its crucial fourth quarter to the end of September, which accounts for about 35 per cent of sales, to be extremely tough because of the deteriorating macroeconomic environment.

As a consequence, Investec, the company's house broker, said annual net publishers' share, the measure of gross profit in the publishing business, was expected to fall about 8 per cent.

"I think they're gutted," said Steve Liechti, analyst at Investec, who had forecast a normalised pre-tax profit of £500,000 for the full-year to September. It now forecasts a loss of £800,000 although about half of the downgrade is due to a change in its year-end.

However, overall, net publishers' share rose 12.8 per cent in the third quarter, broadly in line with expectations.

The downbeat outlook came in spite of strong performances from releases by Portishead and Estelle, whose single American Boy reached the top of the UK chart.

However, there have been higher write-offs for new unproven artists and the Echo recording business had performed below expectations. The new Gnarls Barkley album "just didn't do as well as we hoped", said Andy Mollett, finance director.

"Some of the things we thought would be successful just haven't come up trumps."

In April, Chris Wright, executive chairman, turned down an offer of 155p a share from EMI, run by the venture capitalist Guy Hands, which would have given the 40-year-old company an enterprise value of about £133m.

"It's a bit unlucky I'd say, said Mr Mollett. "Coming out of a process [like the auction] is very hard work if it hasn't been successful and it's been very hard work to get the company back on its feet. [Then] . . . along comes what is a major recession.

"It was challenging anyway, but now it's twice as challenging."

Chrysalis said it hoped new signings - who include Laura Marling, the Mercury Prize award-nominated singer-songwriter - and its back catalogue, would help the music publishing business return to NPS growth "in the medium term".

The shares nudged up ¼p to 98 ¾p.