The share price of Daily Mail & General Trust, the newspaper publishing group, bucked the media sector's downwards trend yesterday with a 13 per cent gain, despite issuing a mixed trading statement.
The company also said it would take a £10m charge related to restructuring as it moved to batten down the hatches amid weaker markets.
The group, controlled by Lord Rothermere, said circulation at Mail titles grew over the summer despite cover price increases in June. But it warned that the London Evening Standard, which was suffering from a fall in recruitment spending, had experienced an 11 per cent drop in classified advertising revenue in the second-half to September.
Commenting on the impact of the US terrorist attacks, the company said: "The Mail titles have seen a considerable short- term increase in circulation, but that was more than offset in revenue terms by a reduction in advertising revenue from the expected level. As a result of this and the weak third quarter to June, display advertising revenues for the second half of the year are estimated to finish 8 per cent lower than the previous year."
DMGT said display advertising on the Mail titles had improved in the current quarter, until two weeks ago, from a weak third quarter to June. In its regional newspaper business, which includes the Bristol Evening Post, advertising in the second-half was up 3.5 per cent, helped by a 13 per cent rise in recruitment advertising.
DMGT shares rose 55p to 558p, or by 11 per cent. That provided a partial rebound from three-year lows but left the stock well off its 1323p high which was recorded last year.
One analyst observed: "The statement stands in contrast with some other horrible statements from media companies, but there is some unreality surrounding the trends in advertising. In DMGT's case, recruitment now accounts for one-third of advertising revenue and if that driver falters it would raise question marks across the group."
Analysts have forecast that group pre-tax profit will be around £195m for the year to September compared with £176m a year earlier.
DMGT's trading statement came as AOL Time Warner, the world's biggest media company, said that the cost of covering the US attacks would hit earnings at CNN television and Time magazine. The company added that global advertising markets had "further deteriorated".
It said that 2001 revenue is expected to grow by 3-7 per cent rather than the 8-10 per cent forecast earlier. Operating profit its expected to grow by about 20 per cent to $8.4bn (£5.7bn).Reuse content