UPDATE 1-Cautious outlook takes toll on Daily Mail shares

(Adds more detail, analyst comment, shares)

By Dan Lalor

LONDON, May 22 (Reuters) - Shares in Daily Mail and General Trust Plc (DMGOa.L: Quote, Profile, Research) slumped to their lowest in more than a decade after a cautious outlook from the publisher when it reported a 7 percent rise in underlying first-half profit.

"It seems that economic conditions in the UK will be tough in the second half and this is having an impact on our local media division," DMGT said in a statement on Thursday.

Underlying advertising revenue at its Northcliffe Media local newspapers business in Britain fell 6.7 percent in March and April, with declines of 12.7 percent at property, 9.2 percent at motors, 4.7 percent at recruitment and 3.6 percent at retail.

"The first weeks of May indicate worsening trends in these sectors," Finance Director Peter Williams told reporters.

"To date, however, our national titles are holding up well, and we expect to achieve growth in our business-to-business divisions, despite a high level of development expenditure."

At 0800 GMT, DMGT shares were down 4.0 percent at 389.75 pence, to value the firm at 1.54 billion pounds ($3.03 billion).

DMGT, which publishes the national Daily Mail and London Evening Standard, and free newspapers Metro and London Lite, made a pretax profit before exceptional items of 144 million pounds in the six months to end-March, on revenue up 5 percent to almost 1.17 billion pounds and in line with forecasts.