Loss-making Oxfordshire component maker Bookham Technology saw a 10 per cent dip in its share price after warning that revenues would be hit by the weak dollar.

Its shares had doubled in price over the past six months, and the company said it was seeing "initial signs of market strength- ening".

But chief financial officer Steve Abely said he could not predict when it would break even.

He said: "Clearly, there are a lot of good signs out there in the marketplace - some increases in spending on the telecom-carrier side and a lot of requests for quotes on new business and equipment - so I do think you are starting to see some initial signs of market strengthening."

Last July, Bookham announced the downturn meant it would have to shed up to 90 jobs at its head office on Milton Park, near Abingdon, and about 90 worldwide.

It shut its Milton Park production plant, which made components for Internet and telephone networks. Optical components are now made Northamptonshire and Devon, as well as Zurich and Santa Rosa in the USA.

In the autumn it bought US company New Focus, which has a state-of-the-art manufacturing facility in Shenzhen, China, lowering the group's manufacturing costs.

The company said its fourth-quarter loss had dropped to £11.4m from £46.2m previously, but warned first quarter sales would be hit by the weak dollar.

Giorgio Anania, president and chief executive, said that heavy investment in new products would put Bookham in a good position to capitalise on a future rebound in the worldwide optical components market.