Car manual publisher Haynes said yesterday a challenging market dogged by lower consumer spending and increased supply costs had dented profits.
The Yeovil-based company reported pretax profits for the year to May 31 fell to £8.3 million from £9.2 million after turnover slid six per cent to £34.2 million.
Haynes boasts a 2,000 strong portfolio of books and DVDs on car and motorbike repair, as well as publications on subjects including camping, DIY and photography.
Chairman John Haynes said the global impact of rising fuel prices had blighted customer spending, while the firm also suffered from pressure on the cost of paper.
Mr Haynes pointed out it was still the third highest full-year profits result since the company was founded in 1960, but also warned of tough times ahead.
He said: "The past 12 months have seen some challenging market conditions and this is a position we can expect to continue."
Haynes, which also has a base near Los Angeles, has put up prices in a bid to ease margins, but said further price hikes remained a possibility. It said higher utility bills, along with the increased cost of running a car - estimated by the RAC to be £14 a day - had meant a cut in spending.
But the company thinks it could also benefit from the hike in costs as cash strapped consumers look to take on repair jobs.
Chief executive Eric Oakley said: "People having less disposable income would suggest we may see some improved levels of DIY income."
Management has been tasked with "reducing costs", which includes a new computer system aimed at streamlining the publishing process.
But Mr Oakley stressed the company was already "lean and mean" when it came to staffing levels - 200 work in the UK and another 100 in the US - and there were no plans to cut jobs.
The group will print its first books as the RAF's official publisher in autumn 2007, while it is looking forward to more success from Formula One and MotoGP season reviews. Since Haynes Publishing was started around 150 million manuals have been purchased throughout the world.