Consumer Imaging, which includes film and photolab equipment, is being sold to a BIMBO (buy-in management buy-out) team for 118.4m (Euro175.5m). The disposal involves a non-cash book loss of 290m.

Chief executive Ludo Verhoeven said its core growth markets were "rapidly going digital".

"We will now be in a position to move faster in strengthening our position in the growth markets of the future," he said.

The firm announced the sell-off alongside with its first-half results, which contained positive news from Graphic Systems.

Agfa said that after a weak start to the year an upswing in customer confidence was confirmed at Drupa, where the group booked a larger than expected order intake. This will flow through into increased sales in the second half of the year.

Graphic Systems director Laurence Roberts said UK sales were up 5% on 2003 at the half-year stage, and there was more to come: "2003 was a hard year, and this year is much better. The industry is much more healthy and there are fewer people going bust. Autumn activity is also set to boost our second half consumables sales."

In the six months to 30 June Graphic Systems sales fell 2.8% to 539m, but if exchange rate effects are excluded sales would have nudged up slightly by 0.5%.

However, in common with other major suppliers the costs attached to attending Drupa hit operating margins, which slipped from 5.4% to 4.8%. Excluding Drupa costs, Agfa said margins would have reached 8.5%. Return on sales was also affected by price erosion, raw material price increases and exchange rate effects.

Graphic Systems accounted for 42.6% of Agfa's overall first half sales of 1.3bn, and this will increase markedly going forward as the freshly-acquired 152.4m turnover Lastra business will be incorporated in the figures from next month.