TELECOMS group ITG has announced a fall in pre-tax profit from €730,000 (£574,922) to €38,000 (£29,927) in the six months ended October 31st, 1999. ITG said this decline was a direct result of the budgeted investment in its card services business. Reflecting underlying growth, the operating profit rose from €923,000 to €1,283,000.
The group's communications, payphones and computer businesses show results ahead of expectations, according to the interim statement.
It entered into a strategic alliance with Esat Digifone and is distributing pre-paid cellular top-up codes electronically through its network of ITG-owned electronic terminals. This followed an alliance with Ulster Bank.
ITG said BT's proposed acquisition of Esat would open up the market, was positive in the long run and ITG would be seeking to exploit it. However, it could lead to more competition for some of ITG's niche areas. The group's telecommunications division has continued to increase its market. There has been an increase in the numbers of larger systems installed.
New street payphone sites have been secured in Thurles, Carlow, Drogheda, Tralee, Galway and Ennis. A new payphone product is being developed for Britain. The computer division had "another successful period". It secured hardware supply contracts with Citibank and Aer Rianta.
Group sales grew from €8.09 million to €25.47 million. There was a negative earnings per share of 1.9 cents contrasting with earnings of 5.2 cents in the same period last year, reflecting the transition state of the group.
The gearing increased from 10.2 per cent to 49.6 per cent. However, ITG raised £55 million after the interim figures and the company now has net cash of about £40 million that will be used to expand the business. The company's stockbroker, Goodbody Stockbrokers, has predicted a pre-tax profit of €1.1 million for the full year, down from €2.2 million, reflecting investment in the card service business.
However, a sharp expansion, to €5.4 million, is anticipated for 2000/1.
