The figures for the year ended 31 December 2005, showed an operating loss of 3.9m compared to operating profit of 23,000 in 2004. Nipson's 2004 pre-tax losses were at 961,000.

According to Nipson chairman Rimon Ben-Shaoul, the losses were down to one-off costs of more than 2m. That figure included costs of a patent infringement court case in Germany and the writing-off of stock relating to spares for older machines.

But Nipson's turnover rose to 29.3m compared to 28.4m in the previous year  of that equipment sales were up 24% to 11.3m.

"2005 was a year of consolidation for the group and the board believes it has established a platform for a return to profitability," said Ben-Shaoul. "For 2006 we expect lower operating costs and are encouraged by the rise in equipment sales in the first two months of the year."