Trading Update

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Monday 23 September 2002

This statement updates investors on the Group's progress in the current year, ahead of the Group's year end on 29th September, 2002.

Trading
The Group's businesses have continued to perform resiliently in difficult trading conditions and despite the extended weakness in some advertising markets.

The circulation of Associated Newspapers' national titles has remained strong in the face of cover price cutting by other national titles. The ABC figures for the six months to August 2002 show the Daily Mail and The Mail on Sunday maintaining year-on-year sales of approximately 2.4 million and 2.3 million respectively, with the August circulation for the daily title being the highest since records began. Display advertising remains volatile and unpredictable. The year-on-year figure for this category for the second half is expected to be broadly flat, giving a full year decline of around 9%. Retail and travel advertising have remained strong, but the financial and information technology categories have continued to decline. Both titles have been successful in raising advertising yields.

The Evening Standard's classified advertising remains weak, with the key recruitment category currently running about 25% down year-on-year. Metro is making good progress and expects to record a small profit for the last quarter of the financial year. Loot has performed well in its first year in the Group's ownership, though considerable reorganisation has been necessary. Ireland on Sunday has been re-launched in the second half of the year. It has become the third biggest selling national newspaper in its market and will now look to win advertising revenues commensurate with its circulation.

Northcliffe Newspapers is still achieving modest growth in revenues. It has continued its policy of increasing investment in editorial and marketing, allied to selective rises in cover prices. As a result, circulation revenues are running ahead of last year for the first time in many years. Northcliffe's evening titles recorded a decline in the six months to June 2002 of 2.9%, back in line with their peers and a considerable improvement on the decline in 2001. A number of daily titles are showing increases, as are almost all its weekly titles. Advertising revenues are volatile, but overall continue to be around 1% up year-on-year. Recruitment advertising will be around 3% down year-on-year, with the other major categories all showing modest increases. Contract printing revenues are, as expected, approximately 25% down on the previous year with an equivalent fall in profitability. The net cost of electronic publishing activities continues to fall.

Euromoney Institutional Investor is a separately listed company and, as such, no comment is included in this statement.

Teletext's revenues have improved from those late last year, but are still expected to finish the year around 6% down on last year. The largest reduction has been seen in its general display advertising, with holiday advertising falling only 3%. A programme of cost reduction and a lower ITC fee payment are expected to offset these falls.

DMG Radio Australia's regional stations are experiencing some recovery in profits from last year's depressed levels. The Nova stations in Sydney and Melbourne continue to perform ahead of their business plan and the long established 5AA in Adelaide is doing particularly well. The transaction with GWR, announced last month, whereby DMGT repurchased the 25% of DMGRA it did not already own, is due to complete later this week.

DMG World Media continues to perform well with, among others, the Ideal Home Show in London, the California Gift Show in Los Angeles and the Global Petroleum Show in Calgary all resounding successes in recent months. The home interest division in particular is showing pleasing growth across its geographic areas of operation.

DMG Information's fortunes remain mixed. The Business to Business division continues to perform strongly: EDR's acquisition of Vista has been very successful, EDR Landmark has seen continuing organic growth, and RMS is benefiting from the upheaval in the world's insurance markets. On the other hand, the Careers Division has seen little or no recovery in its markets, particularly in Hobsons' graduate recruitment advertising throughout Europe.

Other Items
We expect to report, as exceptional operating charges for the full year, reorganisation and redundancy costs of around £10 million arising from restructuring programmes across the Group. These will be offset partly by exceptional gains on the sale of assets, comprising certain surplus properties and non-core businesses.

In addition, the Group expects to report, under UK accounting rules, an exceptional loss of approximately £2.5 million, being its share of GWR's loss on disposal of its 25% interest in DMG Radio Australia to DMGT.

The Group expects to announce its preliminary results for the year to 29th September 2002 on Thursday 28th November 2002.

Enquiries to:
Peter Williams DMGT, Finance Director +44 207 938 6631
Nick Jennings DMGT, Company Secretary +44 207 938 6631