United denies Express sell-off rumours

United News and Media, publisher of the Express newspapers, is set to join a consortium bidding for regional titles being auctioned by Reed Elsevier, United management told City analysts yesterday, writes Mathew Horsman. But despite persistent rumours, it continued to deny it was planning to sell the Express titles.

The news, which accompanied the announcement of first-half results, did little to reassure investors about a decision to hold the dividend at 7.75p, however, and the shares plunged 19p to 514p.

Analysts said that the stock, which has attracted institutional support because of its traditionally high yield, might suffer from further weakness, depending on trading performance in the second half.

Pre-tax profits in the six months to June declined to pounds 65.1m from pounds 69.9m after exceptional items, on revenues up to pounds 527.7m from pounds 508.1m.

Profits from the company's exhibitions operations in the US and the Far East helped compensate for difficult trading conditions in the national newspaper market, where higher newsprint costs, up by pounds 4m in the half, and the continuing effects of the lingering cover price war, led to lower operating margins.

United's chairman, Lord Stevens, said currency exchange rate swings had also helped to dampen the group's profits. The weaker dollar helped to reduce the contribution from the US by about pounds 2.4m in sterling terms.

United is proceeding with a wide-ranging restructuring, which will ultimately cost 220 jobs at the Express titles. Lord Stevens said the benefits will only be apparent in the medium term.