iTouch, the mobile phone services provider in which Independent News & Media has a 39.7 per cent stake, moved into profit in the first half of the year.

Helped by the acquisition in June last year of Movilisto, which opened up new territories for the company in Europe, iTouch posted earnings before interest, tax, depreciation and amortisation (EBITDA) of £3.3 million sterling (€4.8 million) compared to a loss of £1.8 million in the first half of 2003.

In addition to the Movilisto acquisition, the launch of a higher margin direct channel model and the continuing benefits from the restructuring of the company in 2003 contributed to the result, iTouch said.

Revenue rose by 31 per cent to £33.8 million while the company reported its first positive cashflow of £1.5 million. iTouch said the second half of the year had started well and it was confident it would continue to experience strong progress.

"The group is well placed to benefit from the consolidation activity recently seen in the industry," iTouch said.

Last month, the company acquired Finnish mobile entertainment provider Jippii, giving it a foothold in Russia, a market estimated to be worth $100 million in 2003, as well as access to Eastern Europe, Scandinavia, Austria, Germany, Switzerland and Belgium.

"We will continue to grow organically and also to seek out earnings-enhancing deals that can add to our continuing development," chief executive Mr Wayne Pitout said.