Marconi, the telecoms equipment maker, today saw its shares drop 13 per cent after it posted flat second quarter sales.

The group, which recently completed a life-saving financial restructuring, said sales in the three months to September 30 were £305 million, the same as the equivalent period last year.

Marconi added that increased tendering and customer trials activity and extra research and development would cost it an extra £10 million a year going forward, compared with previous plans to keep operating spending at a relatively stable level.

However, the group said sales were up 6 per cent on the first quarter of the year. It said it was sticking to its full year sales guidance of low single digit growth at constant currencies.

Marconi added that demand for equipment to support broadband and third generation telecom service development was driving top line growth and underpinning full year sales guidance.

Mike Parton, the Marconi chief executive, said: "We continue to make progress in challenging market conditions."

Marconi shares stood 75p lower at 513p in morning trade after touching 510p earlier.

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