Conduit losses up but revenue growth strong

Pre-tax losses at Conduit, the Dublin-based provider of telephone directory assistance services at the 11850 number, rose to €1.06 million (£830,000) for the quarter to the end of June from €180,000 million. But the developing company reported strong growth in revenue.

Chief executive Mr Liam Young said the company was investing for future growth and was well funded to continue this strategy.

Conduit was on course to meet its target of 48 million calls for the year to the end of March 2001 and to achieve operating profits in 2002, he said.

Call volume in the first quarter jumped by 312 per cent to 8.94 million calls. The company claimed 40 per cent of the Irish directory assistance market in June.

Explaining that the first quarter only included one month of the post "1190" directory assistance period (following the deregulation of the market), Mr Young said that the volume of Conduit calls had increased significantly since June.

"We advertised heavily from May 25th when the old 1190 number disappeared and call volumes have responded," he said.

Conduit has ambitious growth plans both inside and outside the Irish market, targeting further expansion in Britain and in Austria. It also plans expansion into Sweden, Spain, other deregulating European countries and possibly the US market.

New call centres are planned for the Republic, the UK and Switzerland. Employment at Conduit increased to 659 people at the end of June from 165 a year previously, with an additional 194 people on part-time contracts, up from 70.

The company currently operates in four markets - the Republic, the UK, Austria and Switzerland.

"We are examining possibilities in a number of countries. With £40 million in the bank and a strong share price, we have had a number of approaches and we have made a number of approaches," he said.

Lobbying of the regulatory authorities in Austria had resulted in the introduction of an 85p (equivalent) charge by Austria Telecom for directory assistance calls, Mr Young said. Explaining that, up to now, there was no charge for these calls, he said the move would facilitate expansion of Conduit operations in Austria. Conduit had strengthened its management team and would continue to invest to put infrastructure in place, Mr Young said.

"It is a balancing act between investment and profits. We could be making profits now but I am sure our shareholders would want us to invest for growth". The first-quarter results show a 263 per cent jump in revenue to €5.6 million (£4.4 million). But margins fell to 27 per cent from 44 per cent.

The loss before interest, tax, depreciation and amortisation increased to €602,897 (£474,830) from €93,728 while the operating loss, at €1.1 million (£870,000), was up from €170,000.

The company, which floated on the Neuer Markt in Germany at the end of June, reported an increase in its loss per share to eight cents from two cents.