Psion managed to reduce its losses in April, May and June compared with the same three months of 2001.

It made a pre-tax loss of £15.4m ($23.9m), much improved on last year's £54.4m loss.

However, sales also fell - to £70.8m from £100.5m.

The company said markets for its main wireless mobile technology business Teklogix were not showing any sign of improvement, though it expects the business to end the year in profit.

Teklogix difficulties "reflecting reduced corporate IT spending, particularly in North America" and it has performed well in difficult markets, said Psion.

'Difficult and disappointing'

Psion also faces problems at its Symbian mobile phone software unit.

It said the business would continue to carry "heavy costs" but it expected sales to increase in the second half of the year.

The company said it did not expect Symbian to make a profit until annual sales of devices carrying its software reached at least 15 million units.

Psion pulled out of making handheld PCs and does not plan any new models although it intends to support existing models.

In March it said the last financial year had been the most difficult and disappointing year in its history.