"Our cost-cutting measures have been effective and it seems clear we have moved out of the worst of the economic cycle," said chief executive Amos Michelson.

The firm reduced its second-quarter operating loss to 685,000 ($1m) as sales fell 6.7% to 89.1m, compared with the first three months of the year. Gross margin increased from 41.4% to 42.7%.

Year-on-year sales were down 24.8%. The firms net loss was 11.7m, including a one-off royalty payment of 10.8m to the Israeli government, that will allow Creo to qualify for a new royalty-free grant programme.

Creo still expects to return to "modest" profitability in the fourth quarter, and said it was pleased with its performance at Ipex.

The firm also intends to capitalise on its existing user base. Michelson said the company would be offering users of its installed base of around 8,000 Iris ink-jet proofers "appealing and generous upgrades" to the new Veris model launched at Ipex, and that users of 9,000 filmsetters were "potential CTP buyers".

Michelson also believed that the "majority" of the Xerox iGen3 orders placed at Ipex included Creos Spire front-end, and confirmed that Creo is talking to other high-speed digital press manufacturers about the product.

Creo also aims to boost its European market share "drastically".

"We are putting in place all the necessary measures for much stronger sales, service and management function into our European organisation" Michelson stated.

Story by Jo Francis