Radamec, the UK defence and TV studio equipment supplier, slipped into loss for the first half of 2002 as sales slipped 16.6% from the same period in 2001.
But the company says defence orders for 2003 and beyond have been above expectations and it has sold as many TV systems for government debating chambers in the first half of this year as it did in all of 2001.
Sales for the first half reduced from £5.49m to £4.58m, resulting in a loss of £282 000 against last year's pretax profit of £172 000.
To raise cash for expansion, the company is selling its Chertsey head office site to a property developer.
Len Whittaker, chairman and chief executive, said: "The capital gain of £3.7m and the £4.6m staged cash injection, before deductions provide support for future expansion."
The company says new orders from the defence sector now account for 85% of the company's draft 2003 budget. There was a marked downturn in TV studio sales after 11 September 2001 but the company added: "There is an urgent need to replace ageing TV studio robotic camera systems and we expect to see a resurgence of business at the turn of the year."
In the first half of this year, the company supplied robotic TV camera systems to the Scottish and Canadian parliaments and upgraded the system in the UK House of Commons, the European Parliament and the Quebec Legislature.