Software provider Sirius has reduced its research and development (R&D) expenditure in 2004, following 2003 results that are expected to be below market expectations.

In a trading update released to the Alternative Investment Market in December, Sirius said it did not "expect to meet market expectations for profit and revenue in 2003".

A further update released in February said the company had enjoyed an "encouraging start" to 2004, with an "improvement in revenues generated from its professional services", which was in part reflected by a "reduction in research and development expenditure". Its full year results for 2003 will be released later this month.

Sirius chief executive of intermediary solutions Mike Dodds said the company's R&D spend in 2003 was "nearly a couple of million pounds". He said that this was due to a "massive" amount of R&D investment in its Sirius version 1.8.6 product, in order to move the software to a "common components set".

"We are now running as a software organisation a common piece of software," he said. "But we took a lot of financial pain getting there."

Dodds said the company's R&D spend in 2004 will be "hundreds of thousands of pounds", rather than millions. "A company of our size can't afford to spend £2m on R&D every year," he said. "But [technology] doesn't stand still."