Trinity Mirror, the owner of the Daily Mirror, has reported an 8 per cent drop in first-half sales and a 15 per cent decline in July advertising revenue, prompting it to implement further cost-cutting measures. It needs to save a further £20 million next year.

The group, which has seen its market capitalisation fall by 83 per cent in the past year, added that a cost-saving programme had helped it narrow its loss before tax to £20.6 million from £70.4 million. First-half sales fell to £460.8 million from £500.5 million.

It said today that it had implemented net cost savings of at least £20 million in 2008 and planned a new target of cost savings of £20 million in 2009.

Sly Bailey, the chief executive of Trinity Mirror, said: "We believe that these initiatives alongside good portfolio management and our continued investment to build our digital revenues will see the group through this economic downturn and best position the business for growth when market conditions improve.

"The outlook for the UK economy continues to remain uncertain with the ongoing adverse implications of inflationary cost pressures," it said. "Given this uncertain economic outlook for the UK we remain cautious about trading prospects"

The group said it believes the differing characteristics of regionals and nationals provide it with some resilience. The group said that regional advertising revenues for the half year have fallen by 6 per cent.

Trinity Mirror said this morning that it had seen a decline of 3 per cent for January and February, 3.3 per cent for March and April and 11.3 per cent for May and June.

National advertising revenues for the half year fell by 6.5 per cent, reflecting a decline of 3.5 per cent for January and February, a decline of 2.4 per cent for March and April and a decline of 13.2 per cent for May and June.

The group said that net debt at £424 million was up £176 million, reflecting £102 million expended on share buybacks, £68 million funding payments to pension schemes, and £40 million payment for the 2007 final dividend.

Trinity Mirror said its pension deficit had increased from £124.8 million to £145.2 million, which reflects the impact of a fall in assets and an increase in liabilities, partly offset by a reduced impact of the asset ceiling.

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