The increase was due to the sale of assets worth --162 million, with this profit offset by --60.6 million costs of re-organisation, including the restruc turing of the defence systems division and relocation of the head office. Turnover fell to -- 892.5 million from -- 1.197 billion.

The company's arms activities would decline in importance this year because deliveries of the Challenger 2 tank to the British Army are drawing to completion, Vickers said. "However, we are in a very good position to take advantage ofthe market openingup in the UK for providing support services.," CEO Baron Paul Buysse said.