Online learning group ThirdForce, which suffered a decline in sales in the first half of the year, said its full-year revenue would be 5 per cent ahead of that achieved in 2004.

Full-year operating profits, however, will be substantially lower after the group spent more money developing its business.

In a trading statement to the stock exchange, the company said yesterday that revenue for 2005 will be €12.6 million, helped by a partial contribution from Creative Learning Media, which it bought last year in a deal worth up to €8.1 million.

ThirdForce, which has offices in Dublin, London, Canada and Australia, last year announced plans to diversify its business beyond IT training and into online assessment, adult literacy and workplace learning, to position itself as a broadly based learning company.

This follows a move into the adult literacy market in 2004 with the acquisition of UCD campus company, AV Edge.

During the last six months of 2005, ThirdForce spent an estimated €1.2 million redeveloping its core ICT product and expects the level of spending to remain at a similar level in 2006.

The company said that, while it had been aware of this level of spending at the beginning of the year, the revenue associated with the new product areas had progressed more slowly than anticipated.

It also said that, in order to achieve the predicted higher level of sales, more investment was needed.

Looking ahead, the company said it was well-positioned to return to strong growth and is forecasting a 50 per cent increase in revenue in 2006.

While this will obviously have a positive effect on the group's operating profit, margins will not return to normal until 2007, when the current product investment is completed, the company said.

Shares of ThirdForce closed up two cent yesterday in Dublin at 30 cent, while in London they dropped 1.5 pence to 18.5 pence.