Trinity Mirror today signalled a warning about the economic climate, remaining cautious about its business prospects for the year.

The company expects factors including the credit crunch, inflationary cost pressures of energy and essential food items, as well as the general economic outlook, to affect business but expects to perform in line with expectations.

Its latest business report warned that market conditions affecting consumer confidence and spending meant that businesses were cutting marketing budgets to offset their slowing revenues.

It said: “This has resulted in the advertising environment remaining difficult and volatile in the period since our last update at the end of February.

“Given this uncertain economic outlook for the UK we remain cautious about trading prospects.”

But the business continued to make progress developing a growing multi-platform media business, launching and buying new products and services to complement the print products.

Yet the firm is also on track to save £20m this year, with some £7m saved in the first four months of the year.

Set against the economic background, cost control and operating efficiency remain at the core of its strategic focus.

The statement said: “Management will continue to implement the group’s new operating model which provides continued improvements and efficiencies to create a more robust business.

“The group remains on track to deliver the incremental £7m of cost savings (£20m annualised) by the end of 2008 and at this stage the Board anticipates performance for the year to be in line with expectations.”

Digital revenues for the regionals during this period grew 38.6 per cent.

For the regionals division, advertising revenues in the same period fell by 3.1 per cent.

On an underlying basis, they fell by 4.9 per cent but digital revenues grew by 37.1 per cent with an underlying increase of 20.6 per cent.

The £175m share buy-back programme announced on December 19, 2007, is ongoing and by May 7 the company had acquired 31.4m shares for £98.6m.