UPDATE 1-Trinity Mirror still cautious as ad market suffers

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LONDON, May 8 (Reuters) - British newspaper publisher Trinity Mirror Plc (TNI.L: Quote, Profile, Research, Stock Buzz) said it remained cautious over its prospects as the uncertain economic outlook hits advertising, but sees its performance for the year to be as previously expected.

The company also said in a trading update on Thursday it remained on track to deliver 7 million pounds ($13.7 million) of cost savings by the end of 2008.

"The outlook for the UK economy remains uncertain with the ongoing adverse implications of inflationary cost pressures, in particular energy and essential food items, and the wider implications of the credit crunch," it said in the statement.

The economic conditions have hit consumer confidence while businesses are cutting marketing budgets to offset the prospect of slowing revenues, which has led to a difficult and volatile advertising market.

"Given this uncertain economic outlook for the UK we remain cautious about trading prospects," the company added.

Shares in Trinity Mirror, which owns around 200 national and regional newspaper titles including the Daily Mirror, closed at 260-3/4 pence on Wednesday to value the company at around 713.2 million pounds.

Actual group advertising revenue in the 17 weeks to April 27 fell by 3.1 percent. Advertising revenue fell by 3.2 percent in January and February and by 3 percent for March and April.

When reporting flat underlying pretax profit for 2007 in February, the newspaper publisher said it expected advertising revenue to have fallen around 3 percent in January and February. (Reporting by Mike Elliott; Editing by David Holmes)