Bosses at an electronic sign firm have completed a £10m management buy-out and are planning to double sales.

Directors of Gateshead company VMS, formerly Variable Message Signs, have bought the company from Rolls Royce, with the backing of venture capital group 3i.

In the past 13 years, turnover at the firm has increased almost five-fold from £2.5m to £12m, and its new owners expect to increase this to £24m by 2006.

Roger Stainforth, managing director of VMS, said: "VMS is already a market leader in variable message sign driver information systems. Now, as a strongly financed independent business, we can concentrate our efforts in the growing traffic control sector and rail signal markets in the UK and overseas."

The company recently secured a £4m contract with the Highways Agency to produce the next generation of electronic warning and information signs on roads.

Earlier this year, it secured a £700,000 deal to provide message boards to the Olympic Games in Athens, Greece, next year.

The company's drive to boost revenue will have a knock-on effect for businesses around its Team Valley headquarters, where it employs 44 workers. VMS sources more than 90 per cent of materials and services within a nine-mile radius of its base.