UPDATE 1-Forth Ports says Q1 in line, 2009 challenging

* Net debt reduced by 5 million pounds since end-2008

* Shares up 1.5 percent

(Adds details, shares)

LONDON, May 1 (Reuters) - British ports-to-property group Forth Ports (FPT.L) said on Friday first-quarter trading was in line with its expectations in what it called a challenging year.

"Whilst the outlook remains challenging for the rest of the year, our diversified cargo and customer base and the high proportion of contracted revenue mean that the group is well placed to meet these challenges," the Edinburgh-based company said.

Forth Ports, whose ports include five in the Firth of Forth, said its financial position was robust and it had reduced net debt by 5 million pounds ($7.4 million) since Dec. 31 when it stood at 208 million pounds.

The company, which previously announced plans to scale back property activities in view of the economic downturn, said it was unlikely any of its potential new investment projects -- totalling over 50 million pounds -- would be implemented this year.

Shares in the company, Britain's only ports company listed on the London Stock Exchange, were up 1.5 percent at 995 pence by 1011 GMT, valuing the company at 447 million pounds. The wider FTSE 250 index for mid-caps .FTMC was flat. (Reporting by Victoria Bryan; Editing by Dan Lalor) ($1 = 0.6739 pound)