Blavod, the black vodka maker which floated earlier this year, saw its UK sales increase 15% over the same period last year, but sustained a loss of £1.1m, compared to £1m in 2000, which the company said was in line with expectations.

Gross profits increased from £138,000 in 2000 to £270,000 in 2001, while the company's turnover also improved from £776,000 to £835,000.

Chief executive Richard Ambler said: "Gross margins improved considerably due to greater efficiencies of production and sustainable price increases, although the final quarter sales were unexciting having been affected by a more pronounced 'Christmas hangover' effect than usual.

"Nevertheless sales volumes at 15% higher in the crucial UK market - even without budget support for promotion and marketing - were especially pleasing."

Chairman Allan Shiach said: "Following admission [to the Alternative Investment Market] in February, the new board including a new chairman became established…and it will be plain that we expect to be moving the brand forward in years to come.

"Already new customers have been attracted, particularly in the on-trade, and this should benefit the all-important last quarter of 2001."

The company said that following a substantial distributor agreement in Brazil, sales and distribution contract are also being negotiated for a number of other countries.

"In the vital US market, a careful and thorough strategic review has been undertaken. Management, having successfully addressed a legacy of a lack of sufficient promotional funding, is now in detailed discussions with potential marketing and distribution partners," Shiach said.