Smart accounts not so bright

AS BRENDAN Murtagh seeks to drum up interest in Smart Telecom, its latest set of published accounts give an insight into the difficulties facing the business. Accounts for the year to the end of 2007, which have just been submitted to the Companies Office, show that Smart made a loss of €19.6 million.

Smart’s turnover halved in 2007 to €16.6 million – a reflection of Eircom’s decision in October 2006 to disconnect its residential fixed-line business in a dispute over payments.

Smart’s current liabilities exceeded its current assets by €63.8 million at the year-end. This is listed in the accounts as one of the matters casting “significant doubt about the company’s ability to continue as a going concern”.

The accounts state that Smart is dependent on Smart YuRoe Broadband Ltd (SYBL) to “provide it with continued financial support”.

“SYBL is in breach of certain loan covenants at the date of approval of these financial statements and so the lenders could recall the loans at any time,” a note to the financial statements adds.

The accounts also state that, since the end of 2007, Smart had incurred “further trading losses” and “the current economic conditions create uncertainty over the ability of the company to achieve profitability and positive cash flows in the foreseeable future”.

The accounts, which were signed off on April 22nd this year, state that SYBL secured “additional funding” for 2009 from its lenders which has not been fully drawn down to date “although the company’s cash flow projections indicate that it will require further funding during 2009”.

Smart’s accounts paint a bleak picture and indicate the uphill task Murtagh will have in offloading the telco or even finding a partner to help shoulder the burden.