Publisher Daily Mail & General Trust said supermarket price wars and new mobile phones had lifted newspaper advertising in January, when reporting an 8 per cent decline in first-quarter revenue.
The group, whose flagship Daily Mail newspaper is Britain's most popular mid-market tabloid, said today margins had improved in both its consumer and business-to-business operations, resulting in roughly flat adjusted operating profit.
"Trading in the first quarter has been ahead of our expectations and the new calendar year has started well, but we remain cautious about the outlook for the rest of the year, particularly in the UK," said chief executive Martin Morgan.
Daily Mail shares were down 1.2 per cent to 437.5 pence by 08.29am in a generally stronger market.
Daiy Mail has in the past year stripped out loss-making assets like the London Evening Standard, which it sold to Russian oligarch Alexander Lebedev, and the free London Lite newspaper and the Teletext TV service, both of which it closed.
Mr Morgan said some disposals of small trade and consumer shows would likely happen soon and minor acquisitions were still possible, but the focus was on organic growth and debt reduction rather than radical portfolio changes.
"The M&A market is just beginning to come to life, so if we were to do a significant disposal we'd rather choose the timing ourselves," he told Reuters.
Daily Mail has no immediate plans to leap into consolidation of Britain's regional newspaper market, after the Guardian Media Group said on Tuesday it had agreed to sell its regional titles to Trinity Mirror, he said.
Total revenues for Daily Mail's fiscal first quarter to end-December were £482 million, with consumer revenue down 9 per cent on an underlying basis to £297 million and B2B revenue down 7 per cent to £186 million.
National advertising sales fell 11 per cent in the December quarter, but January national newspaper ad revenue was up year-on-year from a very low base, helped by competition between supermarkets and mobile-phone manufacturers.
The Daily Mail newspaper has helped cushion the company from the worst of the advertising decline, as it owns a key target audience. Morgan said the free London Metro morning commuter newspaper had also enjoyed strong ad sales in January.
Regional British newspaper advertising sales fell 13 per cent in the quarter, with recruitment ad sales down 33 per cent. Mr Morgan said recruitment continued to be weak in January but property picked up somewhat.
In events, Daily Mail said it continued to see an encouraging trend in bookings but did not expect to see that reflected in this year's results.
The group reported results for business-to-business publishing unit Euromoney last month. Euromoney's quarterly revenue fell 16 per cent.