Outdoor advertising company Maiden has said that brisk business last year has been cancelled out by falling billboard sales and time delays in signing new rail contracts.

However, the company reported that 2005 has got off to a very good start, with January sales 13% ahead of a strong performance in the same month last year and up on December.

In a trading update issued to the City as it enters the close period ahead of its preliminary results on 31 March, Maiden said it expects £7m pre-tax profit before exceptionals and goodwill amortisation for 2004, compared to £5.3m in the previous year.

It said the quality of its retail - shopping centre and supermarket - poster sites were improved and, despite a 25% reduction in the number of sites, sales were up "significantly" reflecting higher prices and occupancy.

Last year the company won a major victory with a 10-year extension to its Network Rail contract to operate poster sites at main stations including King's Cross, Manchester Piccadilly and Birmingham New Street - a contract expected to generate £477m.

In the trading update Maiden said "excellent progress" was made in the rail contract re-tendering process, with contracts representing 89% of its rail revenue having been re-won.

The group also said its long-term financial position had been strengthened by the renewal of banking facilities.

But Maiden said the billboard advertising market under-performed "relative to the rest of the UK outdoor market, reflecting commodity pricing and volatile demand, particularly in December."

As a consequence, its billboard division "performed below initial expectations".

In addition it said that problems getting the new rail contracts started on time had also affected the group's overall figures for 2004.

"These two issues have affected the performance of the group, despite the good progress elsewhere," said the company.

But it said the billboard market was rebounding and that retail and rail sales were going well in the first three weeks of 2005.

" Forward bookings into February also look strong and at the end of the third week in January the group's booked first-quarter sales are already 93% of last year's first quarter out-turn," said the statement.

Last September Maiden announced a 75% increase in first-half pre-tax profits saying the market in poster and billboard advertising growing almost twice as fast as newspapers.

Buoyed by the new Network Rail 10-year contract and cost-cutting measures across the business, the outdoor advertising company said first-half profits before amortisation charges rose to £2.1m.

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