Trading Update

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Thursday 14 March 2002

The Group's businesses continue to perform well despite difficult trading conditions. They are reaping the benefit of investment over a long period and generally proving to be robust in terms both of market position and profitability.

The circulation of Associated Newspapers' national titles continues to grow, despite cover price increases imposed during 2001. The ABC figures for the 6 months to February 2002 show the Daily Mail up 3.4% and the Mail on Sunday up 2.6% year on year. Display advertising remains soft, but appears to be improving somewhat from the 15-16% year on year declines seen in October and November 2001. The equivalent decline for February was down to 8% and prospects for March are similarly encouraging. By category, retail advertising continues to be strong with improvements in motors and travel, but the financial and IT categories show little sign of improvement. The titles are adhering to their policy of improving yields to reflect the higher circulations. The Evening Standard's classified advertising remains weak, with the key recruitment category still over 40% down year on year, as in the last quarter of 2001. Metro is making good progress and despite the advertising weakness we still hope that it will be trading around break-even by the end of the year. In order to mitigate any effect of reduced revenues across the division, cost saving initiatives have been introduced.

Northcliffe Newspapers continue to see growth in overall advertising revenues. These rose 3.5% in February following a 1.8% rise in the quarter to December 2001. Recruitment advertising is currently running 4% down. Increased investment in editorial and marketing is beginning to help improve circulation performance as well as provide the basis for increased cover prices. Overall circulation revenue is currently running ahead of last year for the first time in many years. However, as anticipated, contract printing revenues are approximately 20% down on the previous year. Net digital publishing investment continues to reduce as this activity is better aligned with the newspapers, with employee numbers substantially reduced and revenues up 50%.

Newsprint prices have been agreed for calendar 2002 at levels that will reduce the Group's newsprint bill by approximately £25 million in a calendar year. Due to the timing of this decrease and of the previous year's increase in price, the benefit in the Group's current financial year is limited to approximately half this amount, all falling in the second half of the financial year.

Euromoney Institutional Investor is a separately listed company and, as such, no comment is included in this statement. It will be announcing its results on 22 May.

Teletext revenues are showing signs of recovery after some weakness following 11 September. DMG Radio Australia's metropolitan Nova stations continue to perform ahead of our expectations, especially in Melbourne where our station's debut result last month showed it to have achieved a market leading position for its target audience less than two months after launch. The regional stations are recovering gradually from the previous year's depressed levels of profitability.

Many of dmg world media's exhibition businesses are local or regional in nature and are therefore tending to hold up well. The North American home interest shows have seen higher attendances and the Daily Mail Ideal Home Show in London, currently on, has started well. The gift trade and art and antiques sectors are seeing tougher trading conditions.

A presentation on DMG Information was given recently and is displayed on the Company's web site. The Business to Business division is performing well. Within the Careers Division, Hobsons' graduate recruitment markets remain tough, especially in Europe. In the US, student numbers at Study Group have not seen any appreciable recovery from the sharp drop experienced as a direct result of the events of 11 September, but its UK and Australian operations are growing.

In summary, the Group is taking advantage of the strength of its businesses to improve market positions while times are tough. Looking at the financial year as a whole, a satisfactory outcome is currently expected.

The Group's interim results to 31 March, 2002 will be announced on 30 May 2002.

Enquiries to: Peter Williams DMGT +44 207 938 6631
Nicholas Jennings DMGT +44 207 938 6625