Daily Mail & General Trust is looking to defend its position in regional classified advertising by launching free classified websites amid the rise of free internet services such as Craigslist.

Peter Williams, DMGT finance director, said on Thursday the newspaper publisher was learning from experience in the US, where newspaper classified advertising was severely affected by free classified advertising and community websites.

"We have had more warning over here and we've been able to prepare for it," he said.

His comments came as DMGT updated the market with current trading and reported results for the half year ended April 2.

The owner of the Daily Mail newspaper, saw a modest improvement in display advertising at its national newspaper division.

This was in contrast to sluggish advertising sales at its regional publishing division.

Pre-tax profit rose 93 per cent to £184.8m, swelled by the sale of Aberdeen Journals to DC Thompson in April. Revenues rose just 2 per cent to £1.08bn.

Excluding amortisation, restructuring costs and profit from asset sales, pre-tax profit rose 7 per cent to £108.7m.

Mr Williams said DMGT was not looking at selling Northcliffe, its regional newspapers.

Earnings per share more than doubled to 38.2p (17p).

The interim dividend rose to 4.05p (3.75p) and its shares rose 11½p to 638½p.

FT Comment

*DMGT said the first six months was a story of two halves - newspaper revenues were down by almost £40m while the rest of the group saw revenues up by £60m. Considering the rapid decline in the classified market, Northcliffe has held up well and DMGT is investing in classified websites. The group is also investing in B2B information and other digital operations but the reliance on revenues from newspapers is still high. While the shares - trading at a ratio of 12 times 2007 earnings per share - are not expensive, volatility in advertising markets offer a reason to be cautious.

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