Irish software company Iona Technologies said yesterday its second-quarter revenues rose 33 per cent to $24.6 million (€24.2 million), but profits fell 55 per cent to $1.2 million. The company said it had concentrated on building sales and managing its expenses in the quarter.

For the six months to the end of June, Iona said revenue rose more than 26 per cent to $45.7 million compared to $36.1 million in the same period in 1998, but it recorded net profits of just $722,000 for January to June 1999, against $4.7 million in 1998.

In April, Iona's share price plummeted after it warned investors that profits for the first quarter of the year would be below expectations. The company's chief executive, Dr Chris Horn, said the bad performance reflected problems encountered in moving to a new sales model.

Yesterday, Dr Horn said its sales for the April to June period second quarter were "a testament to the strength of our business and our progress towards making Iona one of the world's leading software vendors.

"During the quarter, we shipped important new products, signed agreements with major industry participants and continued to provide the technology that our customers need to deliver exciting new business applications," he added.

Mr David James, Iona's chief financial officer, said: "In quarter two, our focus on building our capabilities as a strategic enterprise vendor, while tightly managing expenses, has yielded profitable growth."

After the April profits warning, Iona's share price tumbled from $30 to below $15. In recent weeks, investors appear to have regained some confidence in the stock, but yesterday, the share price was still trading well below $20.

Iona, with its headquarters in Dublin, makes middleware - programs that allow other software programs to work together.