Eircom poised to return to growth, bringing it closer to a flotation

Eircom will return to revenue growth in the current quarter, the company says, bringing it "one step closer" to a renewed flotation attempt.

Richard Moat, Eircom's chief executive, said yesterday the company would grow its quarterly revenues in the three-month period to June, the first time it has boosted its sales in seven years.

“That’s a significant milestone for the business,” said Mr Moat, who was chief financial officer last year when the group pulled an estimated €3 billion stock market offering after investor sentiment generally was damaged by certain overpriced deals.Mr Moat said the company was “selling hope” to investors last year, but the next time it tries to float it will be able to point to “facts” when it returns to topline revenue growth.

“Each quarter of better performance is a quarter nearer going back to the markets for an IPO [initial public offering],” he said.

Proof point

“If we get another quarter of growth and a full year of successful results, that will be a big proof point. It will make it easier to talk to potential investors.”

Mr Moat said Eircom is focused on operational matters and is not considering a renewed flotation attempt “in the immediate term”.

“But at some point in the future we could come back again,” he said.

Eircom announced figures for its third quarter, to the end of March. It recorded revenues of €311 million, down 1 per cent year-on-year, although Mr Moat said the March figure was up 1 per cent. “The quarterly decline was nine per cent just two years ago.”

Its earnings of €120 million were up 8 per cent, a combination of an accelerated cost savings programme and the comparative year being affected by storm costs, which didn’t arise in the latest quarter.

The company added 40,000 new customers to eFibre, its best-ever quarter for additions to the high-speed broadband service, giving it a total of 242,000. It has a total of 766,000 broadband connections, up 9 per cent. It announced strong growth in its mobile division, as more customers shift to postpay contracts from prepay, using richer 4G services.

Mr Moat said it would launch services this summer using fibre to the home (FTTH), which theoretically allows speeds of up to one gigabit, 10 times what is available on the fastest parts of its network.

Joint venture

ESB

and

Vodafone

have launched their own FTTH joint venture,

Siro

, which is focused on regional towns outside of the main cities. Eircom has targeted similar areas for the initial rollout.

“That’s not a coincidence. Our FTTH rollout is our direct strategic response to ESB and Vodafone, and we intend to get to the market before them,” said Mr Moat.