Clinical research group Icon is forecasting sales growth of 16-17 per cent next year after revenue growth slipped in fiscal 2005 following the cancellation of several drug trials.

"The cancellations in the first quarter ended our long period of growth, but we are back on track again now," said chief financial officer Sean Leech. "We expect growth to pick up again this year and in the long term return to our target of between 15 and 20 per cent sales growth." Mr Leech said he expected the group's laboratory business to return to profit during the first six months of 2006.

Icon, which conducts clinical trials and tests for drug companies such as Novartis and AstraZeneca, reported a 10 per cent increase in revenue in the fourth quarter ended May 31 to $86 million (€70.5 million). The company won $101 million worth of new business in the period. Fourth quarter net income slipped to $5.9 million from $7.2 million. "The results for the fourth quarter were in line with our expectations," said Mr Leech. Over the full 12 months to the end of May, revenue also increased 10 per cent to $326.7 million. Full-year net income fell to $24.1 million from $25.7 million. Mr Leech said profit was hurt by the company's policy to continue paying staff even when projects are cancelled.

He said the skilled nature of the work meant it was easier to retain workers until the next project came along, rather than to lay off staff and then re-employ them. As of 6pm Dublin time yesterday, Icon shares, which trade mainly on the Nasdaq, were up 7 per cent at $40.91.