UPDATE 1- UTV revenue up 6 pct, warns of TV ad slowdown

* Revenue up 6 pct to 120 million pounds

* Warns of further deterioration in TV advertising

* Dividend cut to 2 pence from 8.3 pence

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LONDON, March 12 (Reuters) - Northern Irish broadcaster UTV Media (UTV.L) posted a 6 percent rise in 2008 revenue, lifted by growth in its non-TV business, and said it would pay a reduced dividend but said TV advertising declines would accelerate.

UTV, which operates the ITV (ITV.L) franchise in Northern Ireland, said pre-tax profit from continuing operations before exceptional items slipped 2 percent to 20.3 million pounds ($28.1 million). Sales were 120.3 million pounds.

The company cut its dividend to 2 pence from 8.3 pence a year earlier, saying it wanted to take a cautious approach to conserve cash until stability returns to the economy. It said it expects to save 5 million pounds in costs this year.

"The advertising sector is feeling the full force of the downturn and clearly that is an issue we are actively addressing," Group Chief Executive John McCann said in a statement on Thursday.

The company forecast its TV advertising revenue would fall by 19 percent this quarter, underperforming an expected drop of 17 percent in the wider market, while UK radio advertising would fall by 15 percent, outperforming the national average.

"Despite the very challenging revenue environment, we have been encouraged by the group's continued outperformance of its markets, decisive action on costs and its early move to refinance," Numis analysts said in a note.

The brokerage said UTV's results were slightly ahead of its forecasts, adding that it was encouraged by the final dividend.

Last year, UTV's television ad revenue fell 7 percent, while revenue from continuing operations at its British radio stations was broadly flat.

Radio accounted for 59 percent of total group revenue.

(Reporting by Harpreet Bhal, Editing by Georgina Prodhan)