Trading Update for the 6 months to 27th September 2009

The Directors of Trader Media Group Limited present their summary trading update for the company and its subsidiaries (“the Group”) for the six months ended 27th September 2009. The information contained in this summary is extracted from the unaudited management accounts and is based on underlying financial information which ensures a like for like comparison between periods.

Group Overview

The Group has successfully weathered some of the worst trading conditions it has seen and has continued to manage the transition to an on-line product offering through the period. This has been achieved through reorganizing the Group into three divisions, best suited to the different risks and opportunities faced by the Group:

• Trader Digital, which focuses on the on-line product offerings of the Group mainly through autotrader.co.uk and is a division which has continued to grow through the recession
• Trader Publishing, which is geared around the Group’s UK based, printed magazines and includes Auto Trader, AdTrader, several national titles and the print and other central functions required to support them
• Trader International, which includes the businesses based overseas; Ireland, Italy and South Africa

Group revenue for the six month period to 27th September 2009 was £127m (2008: £152m). Management have reacted quickly to a declining market by reducing the cost base of the Group which has improved the underlying EBITDA (1) margins to 47% for the six months ended 27th September 2009 from 43% for the same period last year . Conversion of profit into cash remained strong with the Group’s consolidated total net borrowings at the 27th September 2009 being £65m better than at the same time last year.

Key Highlights

• Total Group revenue was 16% down on prior year through a period of economic downturn for the automotive sector
• Trader Digital revenue was 1% above prior year, while Trader Publishing and Trader International revenues declined by 39% and 17% respectively
• Total Group underlying EBITDA was £60m (2008: £66m)
• Auto Trader UK Digital market share has grown to 43% for the six months ending 27th September 2009 from 38% at the end of the same period last year whilst the market share of the Group’s nearest competitor has declined from 23% to 13% (2) during the same period
• During the six months ending 27th September 2009, £9m was spent to acquire Trademail Holdings Ltd to further strengthen the Group’s on-line offering
• One of the Group’s two printing plants, Acorn Web Offset was sold on 28th August 2009 for consideration of £2m

Trader Digital

The impact of the current recession on the UK car market is such that the industry has experienced the toughest conditions for over 40 years which has been sustained throughout the last six months trading. During this period autotrader.co.uk stock fell by 14% compared to September 2008 as dealers reduced the amount of stock held on their forecourts and private sellers retained their vehicles for longer. Despite the difficult trading environment Trader Digital has continued to grow through the first six months of the financial year and has delivered results in line with expectations. Significantly the division has managed to maintain profitability at the same level as 2008, £36m for the half year, and has continued to grow its consumer market share during the period.

The division is looking to the future as it grows new channels. This year saw the launch of Auto Trade Mobile, offering access to the same vehicle stock as the autotrader.co.uk site through your mobile telephone.

Trader Publishing

The division as a whole has focused on its cost base as revenues have fallen and has reported margins of 37%, up from 30% last year to give an underlying EBITDA for the Auto Trader magazines of £7m (2008: £13m) and £13m for the whole division (2008: £18m). The Auto Trader element of the division has fallen on previous years as the automotive classified market migrates on-line. However, the magazines remain popular and generated £17m of revenues in the period.

The National Magazines have all undergone rebranding and the new look titles have performed well. For example, Top Marques has begun to grow its circulation through a difficult economic six months, this growth following over a year and a half of decline. While total revenues for the National Magazines are down 14% on the same period last year, proactive management of the cost base has generated a 1% increase in underlying EBITDA compared to the same period last year.

Trader International

The Group’s overseas businesses reported a year on year fall in revenue of 10%, driven by the lack of automotive trade in the economies of Ireland and Italy. However, South Africa is showing opportunities for growth, with revenues up 26% year on year and the Group expanded with magazines for two new regions in the period. EBITDA levels remained strong with the division generating £10.5m of profit in the last six months (2008: £11.4m).

Restructuring

To support a profitable transition on-line the Group continues to restructure its publishing business and increase investment in its digital business. The Group incurred restructuring costs of £5m in the period to 27th September 2009, relating to further consolidation of magazines and support functions and rationalising the group’s property portfolio.

Cash and debt

At 27th September 2009 the Group’s consolidated total net borrowings was £637m, an improvement of £23m since the start of the financial year. Operating cash conversion remains strong at 81% compared with 70% for the same period last year. During the half year, given the need for liquidity in credit markets, it was possible to purchase some debt at less than face value, resulting in a saving to the group of £12m. This saving has been recognized as an exceptional gain in the period.

Outlook

While market conditions have continued to be challenging since 27th September 2009, the Group has seen some signs of improvement. Most notably, the Trader Digital division has seen like for like revenue growth of 7% in the two months to 22nd November 2009. The Group continues to be committed to restructuring measures designed to maintain the Group’s profitability and to enable it to be in a position to take the full benefit of improved market conditions in the future. The Group remains the number one website for motorists and, to strengthen this position, an updated website for autotrader.co.uk was released at the end of the period.

17th December 2009

(1) earnings from continuing operations before interest, tax, depreciation, amortisation and exceptional items

(2) External date provided by Hitwise