ONE of Gwent's leading companies proved it is bucking the trend of overproduction in the semi-conductor market by reporting exceptional trading figures for last year.

Surface Technology Systems, of Imperial Park, Newport, (pictured) reported revenues for the year ended December 31 up 58 per cent to £56.7 million, revenue growth in excess of 50 per cent for the second year in succession and operating profit up 70 per cent to £6.1 million.

But the company could not avoid making cuts in operating costs. Despite a £4 million modernisation programme, around 22 per cent of jobs were lost at Newport with payroll numbers dropping to 297.

STS designs and makes machines used in the production of semiconductors and semiconductor-related devices. Semiconductors - miniature electronic circuits - are usually associated with memory chips in computers.

However, STS serves a range of applications outside this 'mainstream' memory chip market.

Chairman Nigel Randall said: "Despite a challenging year, the group is trading at levels consistent with our expectations and is well placed to benefit from market improvement.

"The thirst remains for new technology-enabling products within aerospace, defence, IT, healthcare, leisure and telecommunications."

He said the rapid business downturn in the second half of 2001 had only delayed the demand for STS products.

"Order intake is down at present compared with the first half of 2001 and will result in lower sales in 2002," he said.

"However, STS is now trading at levels consistent with current expectations and with the outlook presented in October last year.

"The group is well placed to benefit from market improvement due to its established position in some of the world's most prominent and promising technologies."

STS says it monitored the market outlook and responded quickly and positively to all of the challenges presented. As a result, changes were made which reduced costs and improved efficiency while maintaining longer-term investments in new products.

Completion of a factory extension helped improve work-flow patterns and overall efficiency.

Mr Randall said this had regrettably led to jobs being lost.

" STS operates in a world of constant and rapid change and the ability of the business to react quickly, reorganise and adapt to the new environment is a key element of its long-term strength," he said.

Further new products will be announced during 2002.