MOBILE phone equipment maker Filtronic said it was investing a further £4m at its County Durham factory this year - despite revealing that half-year losses had more than doubled.

Filtronic also surprised the City yesterday by announcing the resignation of chief executive John Roulston, forcing a boardroom reshuffle that led to chairman David Rhodes taking up the reins of the company he founded in 1977.

The company, which took over the former Fujitsu factory in Newton Aycliffe in 2000, said it would not be taking on extra staff at the plant - but expected it to break even by May.

The factory produces specialist chips that provide the roaming service between networks on mobile telephones.

Last year, it won its largest contract so far, with RF Micro Devices, one of the world's largest suppliers of modules for mobile phone handsets. Filtronic spent £15m increasing production at the factory and taking on 200 extra workers, taking staff numbers to 450.

But yesterday, group finance director Charles Hindson said he did not foresee any more new jobs at the site, saying: "We have already increased staff numbers to record levels there."

He told The Northern Echo that the resignation of Mr Roulston was down to "differences in view around the ways of day-to-day management and strategy", and not related to the current trading conditions.

Shares in the company fell 31.08 per cent yesterday to 168.5p as investors reacted to operating losses widening to £2.9m in the six months to November 30, from a deficit of £1.3m previously.

These losses do not include any impact from the division that makes antennae for mobile phone handsets for customers such as Nokia, which was sold for £45m in September.

Filtronic is now largely focused on wireless communications - providing semiconductor switches that are critical to the mobile phone network, particularly 3G services.

Other businesses include technology used in the transmission of radio signals for the defence industry and a division making compound semiconductors.

Filtronic also has bases at Shipley, in West Yorkshire, Stewarton and East Kilbride, in Scotland, Wolverhampton and Milton Keynes.

Professor Rhodes revealed that he had quit as chairman to serve as chief executive, with senior non-executive director Rhys Williams succeeding him on a temporary basis.

He said the market for wireless infrastructure was flat in the second half of the financial year so far and revenues growth was being restrained by some delayed contracts.

In the first six months, Filtronic saw revenues from ongoing operations increase to £110.8m from £103.2m at the same stage of 2004.

But the company was optimistic about its prospects for future growth, particularly in the production of power amplifiers, while new remote radio heads for 3G were currently in development.

Wireless infrastructure generates four-fifths of sales for the company, compared with 13 per cent for defence electronics and seven per cent for compound semiconductors.

In its defence electronics business, Filtronic said a number of contracts would be completed in the next financial year and this was expected to reduce revenues.