BUS manufacturer Optare saw its losses widen but said it was in a good position to recover once demand for its vehicles rises again.

The group, which employs 300 people at its Leeds factory, said today that pre-tax losses had increased from £3.2m to £3.9m for the six months to June 30.

Optare, which is based in Blackburn, said it had been a "challenging" year but it had cut theADVERTISEMENTaverage number of staff per bus from £5.3 to £3.6. It also halved the six week manufacturing time for double deck buses.

Turnover rocketed to £52.1m from £7.8m.

John Fickling, chairman, said: "The first half of the year has been challenging as we dealt with issues carried over from 2008 whilst the market demand has fallen substantially.

"Nonetheless, the company has taken a wide range of actions to improve operations and reduce costs including identifying opportunities for new products and for outsourcing raw materials and components with a view to keeping costs at a minimum.

"We have also raised £8.6 million by way of a share placing, subject to shareholder approval later today. This monies raised will significantly strengthen the company's balance sheet and give us the ability to exploit opportunities as the market recovers as we expect it to do so during 2010 - 2011."