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Despite not being able to forecast beyond the Christmas period, DMGT said that October/November advertising revenues for Associated, which publishes the Daily Mail, the Evening Standard and Metro, will be up 5%, although against weak comparative figures, and for its regional newspaper group Northcliffe will be up 6%.

The group reported preliminary adjusted pre-tax profits up by 3% from £177.5m, as turnover across the group fell slightly, down 1% to £1.94bn from £1.96bn in 2001. Shares in DMGT were up 0.41% to 612.5p in early trading.

The group's two newspaper divisions reported a small reduction in profit. For Associated, a sharp fall in advertising revenues was offset by increased circulation revenues, a lower newsprint price and reduced costs.

In a statement, DMGT said: "The group is having an encouraging first quarter, with the newspaper divisions particularly taking advantage of improved advertising markets. However, it is very difficult to predict advertising performance beyond Christmas. We remain confident in the largely market-leading positions of our titles and businesses."

Associated saw operating profit fall 3%, but The Daily Mail's average circulation was up 6,000 to 2,437,000 and The Mail on Sunday was up 1,000 to 2,360,000. The Evening Standard's circulation revenues rose by 8%, in spite of a fall in average circulation to 417,000, largely due to the elimination of days with a reduced cover price.

DMGT said display advertising remained volatile and unpredictable. Retail and travel advertising remained strong, but financial and IT continued to decline. Classified advertising was depressed by the reduction in the recruitment category, where the Evening Standard experienced a massive 38% fall.

The group said that Metro recorded a small profit for the last quarter of the financial year and Loot, acquired in October 2001, achieved a 10% growth in advertising revenues. Ireland on Sunday increased its sales from 48,000 to an average 150,000 following its relaunch in May and Associated New Media recorded reduced losses.

At its Northcliffe regional newspaper division, profits fell by £7m to £90m, due to lower contract printing profits, and evening newspaper titles recorded a decline in circulation of 2.9% in the ABC-audited figures for the half year to June 2002.

Advertising revenues were unstable, but overall increased by 1%. Recruitment advertising was down 3%.

DMGT said its strongest performing divisions was its exhibition business, DMG World Media, and its business-to-business section of DMG Information. Both DMG Broadcasting and, particularly, Euromoney Institutional Investor cut costs as revenues fell allowing them to increase profits.

Within DMG Broadcasting, Teletext recorded only a small reduction in operating profit. DMG Radio Australia recorded a small and reduced loss.

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