The co-founder and chief executive officer of directory inquiry firm Conduit, Mr Liam Young, resigned yesterday citing personal reasons for his decision.
The shock resignation by Mr Young follows a difficult few months for the company which is in the middle of an expensive expansion strategy in Britain.
Early indications suggest Conduit has failed to achieve its targets on call volumes in the British market due to stronger-than-expected competition and consumer confusion. The firm recently laid off about 250 temporary staff in Britain and there have been signs that it has begun easing off on its multimillion pound advertising campaign.
There have been indications of management strife at Conduit since its €55.4 million management buyout earlier this year led by Mr Young and his long-term business partner, Conduit chairman Mr Eddie Kerr.
It is understood that Conduit's recently recruited chief financial officer, Mr Pat O'Donoghue, left in June after six months. It is unclear whether a replacement has been appointed. The business relationship between Mr Kerr and Mr Young is also believed to have deteriorated as Conduit prepared its €40 million strategy to enter the key British market.
In a recent interview with The Irish Times, Mr Young made bullish comments about Conduit's British strategy which have so far failed to be realised.
An analyst for the respected telecoms consultancy Ovum said yesterday it was possible Conduit was not getting the call volumes it had expected.
"Conduit has the lowest price product that in a perfect market should work but the British market is not a perfect market," said Ovum's directory inquiries analyst, Mr Angel Dobardziev.
Mr Young and Mr Kerr own stakes of more than 30 per cent in Conduit following the MBO which left many Conduit shareholders nursing investment heavy losses.
A board statement yesterday said Mr Young would continue to be a shareholder in the firm following his resignation. Mr Kerr - often acknowledged by insiders as the steady business brain behind the firm's success while Mr Young is seen as the ideas man - will assume the role of chief executive and chairman. The firm would not confirm last night whether or when it would seek a replacement.
Neither Mr Young or Mr Kerr was available for comment yesterday. They founded Conduit in 1996 to take advantage of deregulation in directory inquiries markets in Europe. The firm - best known in the Republic for its 11850 service - quickly gained a foothold in the Irish market when it deregulated. But recently it has expanded into several European states including Switzerland, Spain and Austria.
This expansion was financed through a public flotation on the German Neuer Markt exchange at the height of the tech bubble in June 2000, which valued the firm at €280 million. Less than three years later Mr Kerr, Mr Young and other directors of the firm took Conduit private in a deal valuing it at €55.4 million.
