THE owner of Bute-based circuits manufacturer Flexible Technology is hopeful of a return to break-even in about two months' time, after a period of losses amid tough market conditions.

Peter Timms, who owns 92% of Flexible Technology and is the electronics firm's executive chairman, also believes he might be able to restore the workforce to full-time employment from their current four-day week by the second quarter. This will depend on orders.

Flexible Technology's latest accounts, which have just become available from Companies House, show that the company posted a retained loss of £143,487 for the year to July 31, 2011.

Mr Timms, while hoping Flexible Technology will be "profit neutral in a couple of months", expects it will post another loss for the full financial year to July 2012.

The abbreviated accounts for the year to July 2011 do not disclose turnover. Mr Timms said turnover fell to about £2m in this period.

Citing a dampening effect on his business of defence spending cuts and a squeeze on the National Health Service, he emphasised Flexible Technology had no borrowings and said its cash position was "fine".

Mr Timms said the firm had last year lost work for flight control systems for Airbus aircraft, which it had done as sub-contractor for another UK company that had "lost the business to Germany".

He noted Flexible Technology had been doing this work for more than a decade. Last orders under this contract were received in July, he said, and the programme of work ended in October.

He noted that, given Flexible Technology had a "couple of hundred customers", it still supplied some circuits for Airbus but "not the volume" that the lost contract represented.

Mr Timms pointed out Flexible Technology continued to do NHS-related work, in spite of the loss of some of this to the Far East.

Noting the NHS work that Flexible Technology had lost to the Far East was for patient-monitoring equipment, he said: "The squeeze right across the public sector is affecting our customers, and they are looking for lowest-cost sources."

Flexible Technology, which is among the biggest private sector employers on Bute, has nearly 50 staff, with the workforce having been trimmed from about 54 since last spring.

Mr Timms said: "It has been a tough year. We have seen further defence sector cutbacks, both from the UK and Europe. A couple of our customers who provide equipment for the UK health service have transferred production to the Far East."

But Mr Timms emphasised: "We are OK for cash. We are just about cash-neutral at the moment, and hopefully profit-neutral in a couple of months."

He pointed out the second and third quarters of the calendar year were busiest for orders, and hoped four-day working, introduced at the end of December, might only be in place for three or four months at most.

Highlighting the difficult trading conditions that Flexible Technology had overcome back in 2000, he added: "We have been here before. We are not depressed by the current level of business. There are business opportunities. We will grab as many of them as we can."

Mr Timms said of the outlook: "I wish I could be more upbeat about it. I don't think it is going to get any worse, but at the moment I can't see any signs of an upturn."

While noting his firm supplied some big Far East customers with technology that could not yet be produced in China, he added: "For bread-and-butter work I can't compete [with Far East producers]. Labour rates in China and Taiwan are so much below us that there's no prospect whatsoever of us being able to get anywhere near their sort of prices." But he added: "The economy over there is growing so wage rates are increasing quite rapidly."