ADARE Printing has said it expects to win back half the amount of business its Mount Salus subsidiary lost as a result of the cancellation of a major contracts with Microsoft.

"We'll come out with a situation which will be about 50 per cent as bad as we first thought it would be," Adare chief executive, Mr Nelson Loane, said after the company's annual general meeting in Dublin yesterday. All the necessary decisions had been taken to "put Mount Salus back on the rails", he added.

According to Mr Loane, Adare is still looking at possible acquisitions in Britain and the expansion of its recently purchased Prontaprint business. He said turnover this year should grow from £71 million to £110 million and "up to £200 million in a couple of year's time".

In response to a shareholder's question, Mr Loane said that the main lesson the company had learnt in relation to the Mount Salus situation was "to be very careful not to expose ourselves to that level to any one particular customer".

The Microsoft business, which was worth £5 million in sales and £600,000 in profits annually to Mount Salus, is to be phased out from next month. Adare had predicted in June that the conclusion of the work was expected to result in about 70 job losses at a cost of £500,000. But Mr Loane said yesterday that 50 staff had availed of a voluntary redundancy package which had cost the firm £440,000. The current staffing level of 72 people "is just about right", he added.

Most of the new business is also in computer relating printing, with Mount Salus obtaining new clients, "who have the capacity to generate about 50 per cent of the loss" according to Mr David Moffitt, who was, until recently, acting managing director of Mount Salus. Mr Moffitt has been replaced by Mr Jim O'Connell, who was previously sales and marketing director of the Adare subsidiary Cahill Printers.

Mr Loane said that the loss of the Microsoft business had not hindered the company's plans for future acquisitions. The main focus would continue to be in Britain, particularly in the Midlands and the area around the M62 between Leeds and Manchester where Adare already has four subsidiaries with a combined turnover of £50 million sterling. He also saw great potential for growing the Prontaprint business, which it acquired earlier last May for £23 million.