Conduit returns to profit after refocusing

A reduced advertising spend and a focus on profitable activities moved directory enquiries specialist Conduit back into the black this year, the company said yesterday.

Conduit, which operates the 11850 enquiry service in the Republic and the 118888 line in the UK, said revenues for the year ended on March 31st dropped four per cent to €57 million from €59.5 million in the previous 12-month period.

However, it had a near 60 per cent increase in gross profits to €26.3 million from €16.6 million in the same period. Operating earnings came in at €3.2 million, compared with a €30 million loss last year.

Profits before tax this year were €1.5 million, compared to a €31.2 million loss in 2004.

The news marks the end of a troubled period for the company. Last year's heavy losses forced the business to refinance.

As a result of this, Bank of Scotland (Ireland) ended up owning 66 per cent of Conduit after taking €10 million in equity and loaning the company a further €5 million.

Chief executive Liam Young left the business in September 2003, but returned after the refinancing. He and his colleague Eddie Kerr each hold 17 per cent of the company.

Conduit said yesterday that a management focus on profitable activities and significant cuts in advertising spending helped bring its losing run to an end this year.

It is continuing this process with the sale of its Spanish directory enquiry business. German firm Telegate is reported to be the most likely buyer.

The company had incurred considerable costs in trying to break into the UK directory enquiries market during the financial year that ended on March 31st, 2004.

Commenting on the results yesterday, Mr Young said Conduit's Irish, UK and European directory enquiry brands had all contributed to the results.

"All markets in which Conduit operate made a positive cash contribution to the company in 2004," he said.

During the year, the company signed up a number of new customers, including Vodafone UK, Aer Lingus, independent telecoms company Tele2, T-Mobile, BT and Cablecom.

Conduit employs more than 1,400 people in five countries.