Iona Technologies has told shareholders that it intends to return to sustained growth in profitability but appeared to rule out any move to buy back its shares in the near term.

Speaking at the company's annual general meeting in Dublin yesterday, Iona chief executive, Mr Chris Horn, said the company, which has been substantially restructured, now has $50 million (€40.55) in cash and is debt free.

Iona, which had been one of the most successful indigenous technology companies for more than a decade, disappointed investors last month when it issued its fourth profit warning in more than three years together with a pre-tax loss of $1.7 million for the second quarter of the year.

In July the firm said it expected to make a loss of four to six US cents per share for the second quarter on revenues of between $15 and $15.5 million. This is considerably below the company's previous expectations.

Last April, it forecast revenue of between $17 and $19 million. The weaker performance was attributed to poor sales of its newest product. Dr Horn said despite the losses, the group had a very strong balance sheet and was well positioned for the medium and long term.

He told shareholders maintaining that strong financial position was crucial in terms of winning new customers and explained that this was the key reason why Iona's board of directors were reluctant to engage in a stock purchase of its own shares.

"A strong balance sheet is an important sales tool going to customers. If you took some funds and purchased stock this would reduce our cash balances," he told the meeting.

Dr Horn said that between 50 and 55 per cent of Iona's earnings came from the US market, compared to 100 per cent in 1995. It sells its products in Europe and Asia and has won a contract with the Chinese government which will use Iona's technology to help to combat traffic congestion in Beijing and to ensure free flow of vehicles through the city when it hosts the next Olympic games.