Mobile data services firm posts €13.3m pretax loss

MOBILE DATA services provider Zamano said sales declined last year in both Britain and Ireland, but overall business stabilised in the second half of 2010.

Revenue for the year was €15.8 million, down from €25.1 million in 2009 – with Britain and Ireland recording falls of 55 per cent and 45 per cent respectively.

“In early 2010, changes to regulation in Ireland resulted in many of Zamano’s business-to-business partners withdrawing from the market, driving the very sharp decline in Irish revenues,” chief executive John O’Shea said.

“In the UK, the continued failure of Payforit to function as a straightforward sign-up and payment mechanism meant the company has remained unable to benefit from the increase in mobile inventory availability.”

Earnings before interest, tax, depreciation and amortisation fell to €900,000 from €4.3 million a year earlier, the company said.

The company reduced its goodwill by €12.7 million, resulting in a pretax loss of €13.3 million for the year.

Gross margin declined by five percentage points to 29 per cent as additional content costs were incurred. Marketing costs also rose as the company explored new market channels.

Revenue in the US grew by 9 per cent, although Mr O’Shea noted that the market there remained challenging as the pace of smartphone adoption was high.

“This demands very rapid deployment of new services and constant innovation in terms of exploring new channels to market,” he said.

Spain recorded growth of 149 per cent.

Chairman Mike Watson described the year as one of “two contrasting halves”, noting there had been serious declines in the first half of 2010.

“Stability has been maintained into 2011, and a further reduction in the cost base has restored moderate levels of profitability in the core mobile content business,” he said.

In January, the company agreed an amended loan facility with Lloyds Banking Group’s Irish unit, Bank of Scotland Ireland, which included a revised capital repayment schedule.

Mr O’Shea said Zamano would focus on new business opportunities to grow the company.