The UK’s largest machine tool company, 600 Group, suffered a decline in sales of lathes to the UK and elsewhere in Europe as well as a disappointing result from Australia last year.
However, the falls did not conceal a strong result from North America, and the group continued developing overseas markets.
Chairman Michael Wright blamed the problems in Australia on the fall-out from the Asian economic crisis and said that the UK and US markets were expected to maintain the improving trend of the last few months.
The group has introduced a number of lower-cost lathes for the European market.
In the US some price reductions resulted in major market share gains for the Storm family of slant-bed CNC lathes.
Operating profits on continuing operations dropped £2m from £12.4m last year. At the pre-tax level, profits of £9.8m on turnover of £132m were in line with forecasts from SBC Warburg.