YORK attraction designer and operator Paragon Entertainment predicts financial results will fall below expectation for the year but says directors are "optimistic" about 2016's earnings following further commercial progress.

Followings its earlier results announcement in July, which revealed a £1 million loss for the Elvington-based firm, and a banking covenant breach, Paragon yesterday updated shareholders on "good progress" at the firm.

The board revealed "good levels of existing capacity utilisation" on various new projects, as well as a contract win for a £5 million design and build project for a major theme park in the UAE, which started in full production in September.

Mark Taylor, chairman of Paragon Entertainment said: "Although a little slower than we would have liked, we are satisfied with the developing levels of activity and order intake during the second half of FY2015 and we continue to trade in compliance with our banking covenants.

"While we now see 2015 falling short of expectation we believe that 2016 and beyond will produce pleasing results."

Since July's results, which bosses attributed to project delays, Paragon has entered into a framework agreement with a leading international retailer to develop experiential retail in their new stores later in 2015.

The firm has also started work on other projects including Royal Armouries, new International Olympic Museum work, the Chocolate Museum in Dubai, the new gallery at the Centre for Life, and a £1.2 million children's project in Cairo for an existing Middle East client.

Ongoing work for Paragon includes Portsmouth Boat House 4, Train World in Belgium, London Zoo, Al Jabah and Kapsarc, while complete projects feature Trafford Centre theming, Rugby Museum in Twickenham, National Space Centre, BBC Figures and Alnwick Castle gardens.

As a result of activity since July, directors say they have become "increasingly optimistic" as to the visibility of earnings for 2016 with good progress made on the order book.

However due to delays on certain projects the directors now expect full year results for the current financial year to be below current expectations with 2015 revenue and EBITDA now expected to be approximately £9 million and £200,000 respectively.

Paragon Entertainment is the parent company of three businesses, with the core subsidiary being Paragon Creative, a visitor attraction design, production and fit-out business.

The group is also made up of visitor attraction licensing company Paragon Entertainment (Attractions) and attraction consultancy, feasibility and operations company The Visitor Attraction Company.

In its July interim results, Paragon revealed a £1.8 million year-on-year drop in revenues, down to £7.7 million.

With EBITDA (earnings before interest, tax, depreciation and amortization) of minus £100,000, and an overall loss of £1 million, the firm breached finance arrangements with lender HSBC. The latest announcements has confirmed Paragon is back trading within its banking covenants.