First-half turnover at computer and software vendor Horizon dipped slightly this year, but reduced costs helped boost profits by 20 per cent.

The company said that turnvoer was €148.9 million in the first six months of the year, down slightly on the €150.8 million reported for the same period in 2004.

However, the cost of sales dropped by almost €3 million to €131.6 million, from €134.4 million last year, boosting gross profits to €17.4 million from €16.3 million.

Staff costs and other operating charges combined rose by €500,000 to €12.3 million from €11.8 million.

The company had operating first-half profits of almost €4.6 million, up from €3.9 million in 2004.

Its high-margin enterprise solutions corporate business generated the bulk of these earnings.

Horizon recorded profits before tax for the period of €4 million, a near 20 per cent increase on the €3.3 million it earned last year.

Basic earnings per share (eps) increased 20 per cent to 4.64 cent from 3.93 cent last year.

In a statement, the group said that during the first half of the year the recovery that began in the IT sector 18 months ago continued.

"Market demand for software and consulting services showed some improvement in the first half of 2005, with evidence of corporate customers beginning to invest for growth in the telecommunications, pharmaceutical and finance sectors," it said.

Horizon chief executive, Gary Coburn, said that the results reflected good progress for the group.

Davy Stockbrokers' analyst Barry Dixon, reiterated the firm's target price of €1.35 for the company's stock on the basis that its enterprise solutions business had not yet realised its full potential. The shares gained 2 cent to close at €1.20 in Dublin last night.