egional newspapers to 1,000 as it expects a 37 percent drop in regional advertising sales this quarter.
The group said on Monday it also expected a 24 percent fall in ad sales at its national newspaper division, Associated, for the quarter to end-March but was seeing signs that classified ad sales were stabilizing, apart from recruitment.
It forecast full-year results in line with market consensus, which it said was about 198 million pounds for pretax profit before exceptionals, and earnings per share of 33.3 pence.
Daily Mail shares rose 1.9 percent to 238.25 pence by 0832 GMT, outperforming a 0.7 percent improvement in the European media index.
For the first five months of its fiscal year, Daily Mail reported a 12 percent decrease in consumer media revenues but a 15 percent increase in business-to-business (B2B) revenues.
"Although we recognize the market's concern over B2C (consumer business), we believe Associated is a robust business, while the more challenged (regional newspaper unit) Northcliffe now represents just 15 percent of EBITA," brokerage Numis wrote.
Apart from newspapers, Daily Mail group sells business information, owns B2B media group Euromoney, and runs international exhibitions and an Australian radio group.
Together, these other businesses accounted for 61 percent of sales last year and should bring in 70 percent of operating profit this year, up from 62 percent last year.
GRIM OUTLOOK
The news underlines the grim outlook for British newspaper publishers this year. Daily Mail said last month a downturn in advertising had accelerated sharply in January, with national ad sales down 23 percent and regional down 40 percent.
Trinity Mirror said last month advertising markets crashed 30 percent in January and February, while regional newspaper group Johnston Press said two weeks ago its advertising revenues in 2009 to date were down 36 percent.
Daily Mail stock trades at 7 times forecast 2009 earnings, according to Reuters Estimates, compared with Trinity Mirror's 1.6 times and Johnston Press's 1.3.
Daily Mail said it would exceed its target revenue and cost initiatives of 100 million pounds ($146 million) but would book exceptional operating costs of 20 million pounds in its half-year results.
Cost cuts at the newspaper units alone will now total about 100 million pounds, Finance Director Peter Williams said, more than the 75 million pounds originally projected, with additional benefits coming from cover-price increases and other savings.
At regional newspaper division Northcliffe Media, the number of employees will fall to about 3,500 this year from 4,500. Williams said on a conference call the majority had already been agreed or were in consultation.
Daily Mail said its seasonal net-debt peak at the half-year point would be accentuated this year by trading and the cost of redundancies and would likely reach close to 1.25 billion pounds, after which debt should be steadily cut.
Daily Mail shares have lost 46 percent of their value over the past year and the company's market capitalization is now 910 million pounds.
(Editing by David Cowell)
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