Prime Active Capital posts loss of more than €2m for 2007

DUBLIN-BASED Prime Active Capital (Pac), a digital media and telecoms group headed by former Eircom executive Peter Lynch, made a loss of €2.2 million last year following restructuring of the business.

The company's 2007 accounts, published yesterday, showed that it incurred exceptional costs of €3.4 million relating to the restructuring of the management team and the issuing of warrants.

Pac's annual report show it made a "termination payment" of €438,000 to former executive director Alan Jordan, who left the company in May 2007.

Mr Jordan's total remuneration last year, including his payoff, was €565,000.

Total redundancy payments of €1.1 million were booked last year while a charge of €2.3 million was taken in relation to the issuing of 10 million warrants, which have yet to be exercised.

Pac is now run by Mr Lynch, who was paid a salary last year of €146,000 after being appointed as executive chairman on May 15th, 2007.

The company's 2007 revenues declined by 3.7 per cent to €34.6 million, due to the closure of its commercial print business.

Its earnings before interest, tax, depreciation, amortisation, exceptional costs and other gains improved slightly to €3.14 million.

The firm had net cash of €7.8 million at the end of December compared with debt of €3.83 million at the end of 2006.

Pac comprises two divisions - Digimedia and Telemedia. Digimedia has three business units in the UK: plastic cards, books and journals production, and on-demand digital printing.

In his chairman's statement, Mr Lynch said Digimedia has made a strong start to 2008 and has planned capital investment of €2.5-3 million for the year.

Earlier this year, Digimedia spent €4 million acquiring a 15 per cent interest in Media Square, an Aim-listed marketing communications group. This business has been restructured but in his chairman's statement, Mr Lynch said it was "too early to tell whether a turnaround has been or will be achieved".

Pac's investment in Media Square is some €1 million shy of break-even point.

Telemedia comprises Pac's 80 per cent investment in Cellular Centre, a retailer of mobile phones and accessories based in Georgia in the United States.

Pac invested in Cellular Centre last year and it is run by Robert Haulbrook, the former head of Meteor's mobile phone business in Ireland. Mr Haulbrook owns 20 per cent of the business.

Founded in May 2007, Cellular operates 29 shops but Mr Lynch said it plans to expand rapidly, possibly by acquisition.

"If we can double it every six months then we'd be pretty happy," Mr Lynch said.

Cellular is not expected to reach profitability until 2009, Mr Lynch added.

Pac was previously known as Oakhill and controlled by former rugby international Ray McLoughlin, who still owns 13.6 per cent of the business. Mr McLoughlin stepped down as a non-executive director last year along with telecoms entrepreneur Denis O'Brien.