SkillSoft to consolidate Irish operation in cost-cutting plan

SkillSoft, the US firm which acquired SmartForce in 2002, will consolidate its Dublin operation further to cut its expenses.

The company, which employs up to 200 Irish staff, said in its results announcement yesterday that it would consolidate office space to save a seven-figure sum.

News of the cost-cutting came alongside first-quarter results that warned of challenging times ahead, an outlook that sent the company's shares tumbling 25 per cent in early Nasdaq trading yesterday.

The firm reported net income of $3.2 million (€2.6 million), or three US cents per share, for the first quarter, up from a loss of 13 cents per share in the same period during 2003 and ahead of analysts' expectations.

Despite the return to profit, SkillSoft reported a tough competitive environment in the US market.

It reported revenue of $52.8 million for the three months to April 30th, a 21 per cent increase on the $43.6 million reported in the same quarter a year earlier.

SkillSoft stuck to its forecasts of net income for fiscal year 2005 to be $21-$24 million or 20-22 cents per basic and diluted share.

But cautious statements from management disappointed investors. Analysts had been looking for earnings of 23 cents per share.

The firm's shares plunged 25 per cent in early trading and stayed around that level, closing down $2.63 at $8.00.

SkillSoft did not disclose whether any of its Irish staff would lose their jobs because of the reorganisation.

Just three years ago, SmartForce employed up to 500 staff at its Dublin office but it has severely cut back jobs since then.

The firm has a research and development facility in Clonskeagh and its international financial headquarters in Dublin.

Meanwhile, the firm's annual report shows that SkillSoft chairman Mr Greg Priest made $551,596 in salary, bonus and other entitlements in 2003.

The package included $250,000 in base salary and a bonus worth $233,217.

Mr Priest exercised 433,751 share options during the year, netting a further $2,299,274. The report shows he has a further 1.7 million exercisable options.

SkillSoft chief executive Mr Charles Moran was paid a base salary of $237,500 and a bonus worth $299,333.

He exercised 13,724 options, netting $63,750.

The current president of Dublin City University and board member of SkillSoft Dr Ferdinand von Prondzynski has accumulated options to purchase some 35,000 SkillSoft shares.

The report details the cost of audit fees amassed by SkillSoft due to its accounting restatement after the acquisition of SmartForce in 2002.

Ernst & Young has been paid more than $10 million by SkillSoft over the past two years for its audit work.