X-ray equipment maker Bede posted falling sales and pre-tax losses yesterday following a recession in its key markets.

But despite a severe downturn in the semiconductor industry, the company, in Durham, has secured a record number of orders and predicts 2004 will be a more positive year.

Sales for past year fell to £4.1 m from £5.9m a year earlier, while pre-tax losses before exceptionals climbed to £3.9m from £3.6m.

But Bede said it held on to its core intellectual property and market lead during the year.

It said that its strategy of focusing on the semiconductor market, together with improved product, market and sales focus, was resulting in increased orders.

The group said there had been an upward trend in order bookings through last year and into 2004, with a record order intake of £2.7m in the first quarter of 2004.

Chief executive Neil Loxley predicted that this year would be crucial for Bede, and said that thanks to the increase in orders, the company was recruiting another ten to 15 staff.

"I think that it is a major achievement that we have come out of this recession and are still here and ready for market opportunities," he said.

"A lot of companies did not survive it. Now we have to focus on making our success stick during the upturn in business."

He said the company had been aiming to become a £20m revenue business since it floated, but that depended on the market and economic climate.

Bede designs and makes x-ray instruments and related software used by manufacturers to monitor production in the compound and silicon semiconductor markets.

The group is a spin-off from the University of Durham and provides custom-made scientific instruments to universities.

It now consists of Bede Scientific Instruments, in Durham, Bede Scientific Inc, in Denver, US, and Reflex, in the Czech capital Prague. Its directors took ten per cent voluntary pay cuts during the year as part of efforts to reduce costs by £1m.

The company also raised £3.65m with a share placing and implemented a £1m working capital facility with Bank of Scotland.