Graydon will continue to work in an advisory role to "ensure a smooth transition". Dance will retain his position as chief operating officer.

Creo reported an 18% dip in sales compared to the first quarter last year. However, the sales of 98.5m ($139.5m), were only 2.6% down on the last quarter of 2001 and the firm also made smaller adjusted losses of 1.62m.

Chief executive Amos Michelson said that Creo had seen signs of increased sales activity, which it expected to be reflected in its revenues "provided that the US economy continues in the path for growth during the second half of the year".

Graydon said Creo expected second-quarter revenue to be "moderately lower" than the first-quarter figure.

The group cut operating costs in Q4 by 3.95m and its gross margins were stable at 41%.

Creo will also take a one-time charge of 10.6m in the second quarter for the early repayments of royalties to the Israeli government.

Story by Gordon Carson