Trading Update

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Monday 22 September 2003

(London - 22 September 2003) This statement updates investors on the Group’s progress in the current year, ahead of the Group’s year end on 28th September, 2003.

Trading
Those businesses within the Group that are most dependent on advertising have continued to experience challenging trading conditions, particularly those of Associated which have seen continued weakness in national display advertising revenues and in the London classified market. In these conditions, the Daily Mail and Northcliffe have performed well, as has DMG Information's business to business division.

The circulation of Associated Newspapers’ national titles has remained strong with both the Daily Mail and The Mail on Sunday increasing their sales in the six months to August against a declining market. The circulation of the Evening Standard was only 1% down in the same period, despite a 5 pence cover price rise in January. Metro continues to perform well with its average circulation up by 5% to 880,000 and its profits steadily increasing. Ireland on Sunday has doubled its average circulation to 160,000 in the eleven months to the end of August, compared to the same period last year, but remains in loss.

Associated's display advertising revenues declined by 3.5% for the eleven months to the end of August, compared to the same period last year, but the decline slowed in July and August. By category, retail is still holding up and travel has recovered to pre-Iraq war levels, but most other major categories, particularly financial, have remained weak. Overall classified advertising revenues were up by 3.3% to the end of August, but those of the Evening Standard are still declining: they were down by nearly 10% compared to the eleven months to August 2002 with the recruitment category down by 11%. All titles have maintained their policy of holding and improving their yields.

Revenues continue to rise at Northcliffe Newspapers. Circulation revenues for the eleven months to August were 4% ahead of the same period last year, although volumes of its daily titles declined by 3.2% in the six months to June, a slightly better performance than the industry average. The effort to reduce the level of bulk sales continues, with actively purchased sales increasing by 0.5% to 97.6% of total sale. Northcliffe's weekly titles maintained circulation levels, whilst also improving actively purchased sales.

Northcliffe's advertising revenues for the eleven months to August were 3% ahead of the same period last year, with strong performances from property (up 13%) and recruitment (up 3%). Other categories were up 1%. Volumes continue to be ahead of last year and the yields in all key categories improved.

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

Teletext's revenues are expected to finish the year around 3% down on last year, with holiday advertising slow to recover after the conflict in Iraq. A programme of cost reduction and a lower ITC fee payment are expected to offset this fall.

DMG Radio Australia's stations have recorded impressive results in recent independent listener surveys. Nova Sydney and Nova Melbourne continue to increase advertising revenues in competitive conditions and the regional stations have also made gains in advertising revenues.

DMG World Media continues to perform well overall. The home interest sector remains buoyant with the Daily Mail Ideal Home Show in London a notable success, but the Art & Antiques market remains weak.

DMG Information's business to business division has generated strong revenue growth at both Risk Management Solutions and the property information businesses. Within the careers division, Study Group's gradual recovery from the effects of the terrorist attacks of September 2001 has continued, but corporate graduate recruitment remains weak.

Preliminary announcement
The Group expects to announce its preliminary results for the year to 28th September 2003 on the morning of Thursday 27th November 2003.

Enquiries:
Nicholas Jennings, Company Secretary, 020 7938 6625
Adrian Perry, Deputy Finance Director, 020 7938 6626
Andrew Honnor, Tulchan Communications, 020 7353 4200