The warning came as Chrysalis reported interim pre-tax profits of pounds 104,000 for the six months to 28 February on turnover of pounds 39.2m ( pounds 38m).
The group made pounds 10.6m the previous year, but all of that came from profit on the sale of its 50 per cent remaining interest in the Chrysalis record companies to Thorn-EMI.
Operating losses were slightly lower, however, at pounds 853,000 against pounds 913,000 last time. Chris Wright, chairman, said that reflected better performance from all the group's businesses except the fruit machine and juke-box arms.
He said a new management team was restructuring those businesses. 'We want to try to consolidate into more profitable locations, which will involve getting rid of a lot of machines in unprofitable, obscure parts of the country.'
He added that he did not yet know how much the restructuring would cost, athough the amusement machines division is expected to lose more than pounds 5m this year.
Mr Wright said that plans were under way to launch Chrysalis's new record label, but that nothing would happen until more artists and repertoire staff had been recruited and some artists had been signed. But he expected the label to be in business by the end of the year.
Chrysalis is also bidding for two commercial radio franchises in London, having failed to win the North-West England franchise. Tenders close on Tuesday.
Mr Wright said the group's television interests were making good progress and that Chrysalis was the fifth-biggest independent supplier of programmes to the networks. He added that more sports outside broadcasts were being awarded to independents and that Chrysalis would bid for 'Glorious Goodwood', which the BBC is contracting out.Reuse content