An upturn in business at software firm Sage following the launch of euro notes and coins, and an upbeat outlook at fibre-optics company Bookham Technology, have revived flagging spirits among tech investors.

Bookham, which in February completed the �19.7m purchase of an optical components business from ailing Marconi, forecast improving revenues for the rest of 2002.

And Sage Group reported pre-tax profits up 10% to �65.1m for the six months to the end of March.

The company, a supplier of business software, credited increased revenues to factors including the introduction in January of euro notes and coins, which left firms needing to update accounting capabilities.

In the City, the statements helped prompt rises in the share prices of many tech firms, including chip designer Arm Holdings and computer services firm Logica.

Rising revenues

Sage warned that a 22% increase in turnover had come in the face of "continuing challenging market conditions".

The firm credited growth largely to its success in maintaining its customer base.

"Our strong recurring revenues provide stability and growth."

And revenues earned from selling clients package upgrades and support services had risen to account for two third of total takings, Tuesday's statement showed.

The company, which was also able to increase its customer base by 120,000 to 2.9m, said it was "cautiously optimistic" about performance over the next six months.

Broader offering

Bookham was also downbeat about overall market conditions, warning that it did not envisage a recovery in the optical components market until "the first half of next year".

But the firm said updated products had inspired a "significant pull" in terms of customer interest.

And revenues were "beginning to grow again", chief executive Giorgio Anania said.

The purchase of the Marconi optical components business would allow Bookham to offer a broader product range, helping it exploit moves among clients to reduce the number of suppliers.

"We believe we now have most of the key components required for next-generation optical networks," Mr Anania said.

"Our broader product portfolio makes us more relevant to our customers."

City reaction

In the City, Bookham shares stood 4p higher at 85p in late morning trade.

Sage stock was up 9.25p at 197.5p.