Homag’s incoming orders were worth €222m during the period, compared to €145m a year ago, while existing orders grew to €241m, up from €157m. Sales rose by 7% to €145m.

“The first quarter certainly reflects a particularly buoyant economy at present with orders flowing both from our project business and the standard machine sector, which we cannot expect to continue throughout the year,” said board spokesperson Joachim Brenk.

He said Homag expected to record a 2006 turnover growth in the “upper single figure percentage range”.

Homag will expand its production capacity during the current financial year by adding a further 8,000m2 to its Schopfloch factory. Plans are already in hand to grow capacity at the company’s Weinmann and Weeke factories, as well as an extension to the Polish division’s factory.

Despite the improved results, Homag said profit margins were being squeezed by a “fiercely competitive” market place, high prices for raw material and energy and the strong euro.

The company’s exports to western Europe, North America and the CIS states made particular gains.