Fexco takes majority stake in voucher firm

Foreign exchange and global payments group Fexco has taken a majority stake in the Gift Voucher Shop, a recently-established business that plans to generate €25 million in 2004 sales.

Kerry-based Fexco would not reveal the size of the stake or the price it paid yesterday. But it is understood its shareholding is substantially more than 50 per cent. The Gift Voucher Shop was set up less than two years ago and sells vouchers on behalf of 550 clients, including Brown Thomas, Arnotts and Smyth's Toys.

Its founder and managing director, Mr Michael Dawson, told The Irish Times last night that it was on target to generate €24-€25 million in sales in the year to end September 2004. Its margins are about 8-9 per cent.

The firm has a distribution agreement with An Post, whose 1,000-plus post offices sell the vouchers. It also distributes via the Web, a call centre and corporate sales. Mr Dawson said it was in talks with the Royal Mail in an effort to establish a UK network.

The Irish gift voucher market is worth €200 million a-year, according to Mr Dawson. He said the market here was close to that of the US, where it is most developed.

Commenting on the deal, Fexco founder and executive chairman Mr Brian McCarthy said it established the firm in a leading position in a high-growth market. Fexco employs 900 people in Ireland, the UK, Europe and the US. It had an €18 million pre-tax profit on €87.6 million turnover in the 10 months to end December 2002.