The publisher of the Daily Mail and the Evening Standard has announced a fall in profits between October and April, and warned of "difficult" conditions since.

Daily Mail & General Trust, reporting adjusted pre-tax profits down �0.8m to �71.6m, blamed factors including the foot-and-mouth epidemic and the hangover of the Sydney Olympics for hitting advertising revenues .

And the firm, still controlled by the family of founder Lord Rothermere, warned of a continued downturn in the display advertising market, and in business titles within the Euromoney magazine portfolio.

"UK newspaper display advertising and business publishing are going through a difficult period," the firm said in a statement on Thursday.

Metro expands

But the company reported continued progress in the Metro free newspaper which, with a circulation of more than 800,000 a day, is now the paper with the sixth-largest print run in the UK.

"Losses more than halved from last year's level, and the title is on track to break even in 2002," Thursday's briefing said.

Overall, DMGT said it expected a "satisfactory outcome to the current financial year", which ends at the beginning of October.

Flagships challenged

April and May were "difficult months" for winning advertising on the publisher's flagship titles, the Evening Standard, Mail on Sunday and Daily Mail.

But DMGT said the titles, which achieved "significant" growth in advertising revenues in the year to April, have still managed to outperform their rivals.

"With their strong circulations, our [flagship] titles are well placed to take maximum advantage when trading conditions improve."

Recruitment boom

At the firm's Northcliffe local newspapers arm, a 25% surge in recruitment advertising helped the division achieve a 7% rise in operating profit.

But the motor and retail advertising markets have remained sluggish, and the foot-and mouth epidemic has "had a marked impact", Thursday's briefing said.

The Euromoney Institutional Investor arm reported a 6% rise in operating profit despite declining takings from the energy, office products and business travel markets.

And DMGT blamed a "post-Olympics slump" for a 9% decline in advertising revenues at its regional radio stations in Australia.

Shares rise

In the City, DMGT shares closed 38p, or 5.0%, firmer at 798p on Thursday, despite analysts' warnings that the firm's earnings may yet fall victim to broader economic conditions.

"Basically, the market was not looking for any positive news," said David Liston, media analyst at Gerrard. "And it hasn't got any."