Rapid Technology Group, the Dublin-based computer hardware developer, yesterday reported a €1.75 million loss for the year to June 30th, a 40 per cent improvement over 2001, and said it planned to diversify beyond its core keyboard technology niche in 2003.

The group, of which Riverdeep founder Mr Pat McDonagh is chairman, blamed a change in product mix and weakness in the US dollar for a 9 per cent slide in gross profits to €1.12 million (34 per cent) but said a 5 per cent decrease in operating costs to €2.54 million had proved crucial as it sought to reduce losses.

The acquisition of one major new customer - a major US supermarket - prompted a substantial rise in turnover, which doubled to €3.33 million.

The firm's US operations have been restructured to bring it under closer management of its Dun Laoghaire headquarters, a move which had helped lower overheads.

With the "complexities" of the niche screen key market making it difficult to generate profits, the company is determined to expand into higher yield sectors over the next year, Mr McDonagh said.

The reduction in losses coupled with improved stock management led to a fall in net cash outflow by 63 per cent to 847,387. Interest payable on a €4.49 million bank overdraft increased to €372,908 from €323,860. However, the group negotiated improved terms on the second half of the year.

Losses to per share were 7.6 cents (basic) and 7.48 cents (fully diluted) compared to 12.68 cents and 12.19 cents for the year ended June 30 2001.

The company is listed on Dublin's Developing Companies' Market and London's Alternative Investment Market.