A GLASSMAKER'S decision to specialise has been rewarded by a huge rise in profits.

Romag, based near Consett, County Durham, announced pre-tax profits of £1.31m, a rise of 36 per cent.

Turnover fell 17 per cent to 13.8m after Romag pulled out of producing mass market, low-margin products, such as double glazing, and moved into niche markets.

Lyn Miles, chief executive, said: "A drop in turnover would normally be bad news. But this was our strategic decision and has been welcomed by investors."

It has recently won high-profile contracts to supply glass for Arsenal's new football stadium in north London, and the Eurostar rail terminal at St Pancras station in the capital.

The results were the 23-year-old company's first since it became a plc in November 2003.

It floated on the Alternative Investment Market (Aim) to raise £7.2m and then spent £3m developing new operations at its complex at Leadgate Industrial Estate.

The plant produces PowerGlaz, a photovoltaic glass that converts the sun's rays into electricity.

The product is being installed at the London Science Museum.

Ms Miles said the product would take off next year, when the Government is expected to introduce legislation requiring commercial buildings to include renewable energy sources.

"The order book is very healthy," she said, "but the real growth will come in 2006."

The company has taken on eight staff at its PowerGlaz operation, taking the workforce to more than 150, and expects to recruit more this year.

Romag also produces bullet-proof glass for the security industry and for banks, bomb-resistant glass for government buildings, plus toughened glass for high-speed trains.