Announcing its interim results for the six months ended June 30 2008 the Bradford-based company said a slowdown in trading had affected sales which stood at £3.9m compared to £5.2m in the first half of 2007.

Pre-tax profits fell from just over £1m in the half year 2007 to £72,000 in 2008.

The company said future contracts had been delayed as companies look to cut costs by postponing projects but insisted they had not been "abandoned".

Belgravium Technologies manufactures of mobile computing and radio frequency data communications used by customers including mail delivery group TNT.

Executive Chairman John Kembery said: "The economic downturn has impacted our growth strategy more heavily than originally anticipated. On account of this we have seen a weak first half.

"However, Belgravium provides a key service to its customers and whilst it is prudent to initially cut back in such economic conditions, customers cannot negate quality of service to their customers indefinitely. We are confident that our offering remains valuable and we cautiously expect a recovery at the end of 2008 and into 2009 as market conditions improve and customers reassess the value of our services taking a longer term view."

Belgravium said it occupied strong positions in its chosen market sectors and offered customers unique solutions to improve productivity and efficiencies in the supply chain.

In a statement, the company said: "Whilst the first half of 2008 witnessed a lengthening of the normal sales cycle, Belgravium's strength, reputation, proven product range and dedicated team will allow progress to resume once market conditions improve."

The company said it would not be paying a dividend as a result of the drop in profits.