Advertising revenues fell off a cliff during May and June at newspaper publisher Trinity Mirror, forcing it to warn that profits would not hit City hopes this year.

Trinity shares, which have already fallen by more than 70% in the past 12 months, tumbled 39-and-a-1/2p, or 27%, to 112p today - their lowest for more than decade.

The warning has forced the group to halt its share buyback with £67 million no longer going to be returned to shareholders. At the same time investors are being warned that they could well face a significant dividend cut this year.

There are also likely to be writedowns on the value of newspaper titles in the wake of the advertising slump.

The torrent of bad news is bound to raise questions over the future of Sly Bailey, Trinity's chief executive of five years' standing, whose turnaround plan appears to have been outstripped by the economic downturn. She scooped a maximum £793,000 bonus last year which took her total remuneration package through the £1.5 million barrier for the first time.

Today, the publisher of the Daily Mirror, Sunday Mirror, Daily Record and The People said: "We have seen a marked year-on-year decline in advertising revenues across our businesses in May and June. In view of these difficult trading conditions and the uncertain outlook, the group currently anticipates the full-year operating profit to be some 10% lower than expectations. Month-on-month volatility remains and this could worsen as we trade through a very uncertain economic outlook."

Analysts had already reined in their profit expectations this year with the majority forecasting pre-tax profits of between £165 million and £170 million, compared with the £191 million Trinity made in 2007.

The group said it expected its debt at the end of June to be about £425 million. It recently refinanced a five-year £210 million debt facility and sources said it was not in danger of breaching banking covenants.

Last year the group sold the Racing Post and a group of regional titles for £263 million having originally hoped that they could fetch between £500 million and £600 million.

The speed of the slowdown is highlighted by the difference between Trinity's trading statement in May which covered the first 17 weeks of the year and today's covering the past nine. In May, underlying group revenues were down by 2.7%, but in the past nine weeks they have fallen 7.8%. Advertising revenues were down 4.3% in May, but have now tumbled 12.6%. Circulation revenues slipped 1.2% but in the past nine weeks they have fallen 2.4%.

Trinity said that for the half-year it now expects national newspaper advertising revenues to be down by 6.5%. Regional ad revenues will be down 6%, with property and motors advertising showing falls in the high teens.

Stockbroker Cazenove slashed its rating on the publishing group's shares from an average "in-line" to "underperform".