The troubled telecoms company Marconi says its sales have fallen but its restructuring is on track.

The company reported sales of �456m ($740.5m) in the three months to the end of December.

That was 5% lower than the previous three months and 28% lower than the same period in 2001.

But the company said its operating performance had improved compared with the July to September period.

'Well on the way to profit'

"Despite slightly lower sales revenues all our key financial performance measures have continued to improve.

"We are well on the way to returning to operating profitability," said chief executive Mike Parton.

Marconi was facing bankruptcy but was rescued by its lenders at the last minute.

Marconi shares dipped to 1.62 pence after the announcement, having started the day at 1.7p.

In mid-2000, the shares had peaked at more than �12 apiece.

Extended downturn

The collapse of the company - formerly known as GEC - followed a decision in the late 1990s to sell the defence electronics arm and focus on what was a growing international market for high-capacity telecoms networks.

The new Marconi bought �4bn-worth of businesses in the US alone but appeared, to some analysts, to be chasing the telecoms wave on the way down, having arrived too late.

The extended telecoms downturn later led to savage cutbacks in jobs and investment, with many parts of the company having to be sold to pay off debts.