Telecoms equipment testing company Spirent has reported lower but betterthanexpected first-half profits and said expectations for the full year were unchanged.

The company - which employs 37 people at Walsall-based electronics distributor Hellermann Tyton - said that three out of its four businesses increased revenues and profits in the first half, while its troubled service assurance division posted a loss as previously announced.

The company has already unveiled plans to cut jobs at the unit, which provides network monitoring software, hardware and services to telecom network operators, in a bid to reduce costs in line with reduced business.

Spirent posted an adjusted pretax profit of £11.5 million for the half-year to June 30, compared with £18 million a year earlier and an average market forecast of £9.8 million. Estimates ranged from £7 million to £12.3 million.

Half-year revenues fell four per cent to £230.4 million, but were above the average forecast of £221.5 million.

The service assurance unit accounted for a fifth of Spirent's revenues in 2004 and has been hurt by declining customer spending on areas such as leased lines and DSL (digital subscriber lines) monitoring.

Spirent has sought to refocus the unit to provide service management to operators for new so-called triple-play services such as Voice over Internet Protocol (VoIP), IPTV and data and said it had seen more quote and trial activity with some large carriers.

"We would like to migrate to new networks with our existing clients as well as expanding into Western Europe, North America and some targeted Asian markets," chief executive Anders Gustafsson said.

Mr Gustafsson, who has just completed his first year with the firm said the service assurance division would continue to be loss-making in the second half, albeit at a substantially reduced level as the benefits of the cost reductions were realised.

He did not say by when Spirent planned to return the unit to profitability, but is hoping for operating breakeven at annual revenues of around £52 million .

Mr Gustafsson also said that Spirent, which has cut 260 jobs at the division, had no plans to axe more.

The firm also had no plans to sell the business, which posted an operating loss of £9 million in the first-half and forced a goodwill impairment charge of £37 million.

"We believe this a very substantial market and today we're as well placed as anyone to gain a stronghold in it. We certainly believe that it is worth our while to continue to invest in it," he said.

Analysts expected Spirent to show more progress on contract wins at the service assurance unit.

Spirent said it expected its performance analysis unit, which makes testing equipment and software used by Alcatel, Cisco and Nortel, to make sequential progress in the second half despite variable market conditions.