Servecast closes six offices after losing €5.2m
Servcast, a technology firm backed by entrepreneurs Mr Denis O'Brien and Mr Eddie Jordan, has closed six overseas offices after reporting a loss of €5.2 million.
The company, which raised €40 million funding at the height of the technology boom in September 2000, has also reduced its staff to just 35 employees in an attempt to break even, Servecast's new chief executive, Mr Mark O'Meara, said yesterday.
Servecast has closed a string of European offices in Germany, Sweden, Spain, Italy, France and the Netherlands this year. It now operated from offices in Dublin and London and with overseas partners, said Mr O'Meara.
The firm has also changed its business model to focus on software development rather than just providing streaming media services to firms. These are services broadcast over the internet but which cannot be downloaded.
He said Servecast now had a dedicated team of people developing software that would enable companies to create their own training tools for staff.
The company would not meet its own target of achieving cash breakeven by December, he said
"We're pretty close to breakeven and we expected to be just a few quarters behind our target," he said. "We've been through a very extreme rationalisation and cut costs by 50 per cent."
Servecast's former chief executive, Ms Pat Chapman Fincher, last year set a cash breakeven target in December 2002. Ms Fincher, a former WorldCom executive, subsequently left Servecast just several months after joining the firm.
Servecast's financial results, filed with the Company's Registration Office last month, show it lost €5.2 million in the year to December 31st, 2001, up from €4.9 million in 2000.
The company did not disclose its revenue, claiming exemptions contained within the Companies (Amendment) Act 1986, for small companies. The results show the firm had €21.8 million in total assets less current liabilities on December 31st, and shareholders' funds of €21.4 million.
Results for each Servecast subsidiary throughout Europe show: its UK operation lost €5.5 million, Spain lost €779,616, Germany lost €1.1 million, Sweden lost €861,472, Italy lost €708,188, France lost €308,680; and the Netherlands lost €560,809.
Mr O'Meara said the losses for each subsidiary included inter-company losses and did not reflect the group's performance overall.
He said the main driver behind the reported loss was the heavy investment required during 2001 when the firm was experiencing rapid expansion. The firm would not need any further private funding before breaking even or after that, said Mr O'Meara.
Principal shareholders in Servecast include Mr O'Brien, Mr Jordan, Providence Equity and Setanta Sport.