Telephony and broadband provider Perlico, in which businessman Michael Smurfit owns an 18 per cent stake, is planning a major push into the personal finance market and intends to offer a range of products to consumers from September, including lending and credit cards.
The company, which is likely to seek a listing on London's Alternative Investment Market in the coming months, is seeking a managing director to head up the new personal finance arm.
Perlico founder and chief executive Iain MacDonald confirmed over the weekend that the company is in negotiations with a number of financial institutions, including two Irish banks, to develop "competitive" lending products.
He said September would see a "soft launch" of the personal finance service, and it would be aggressively marketed from early next year, a peak period for consumer lending.
He added that Perlico also intended to offer mortgages, income protection and life protection products, and claimed that despite intense competition in the personal finance market, Perlico would be able to attract a significant number of customers.
"We don't intend to be just a broker," he said. "We want to develop products with providers and see this as a very good opportunity to deliver better value to consumers."
Mr MacDonald said the development of a personal finance business would give Perlico, which has more than 75,000 broadband and fixed-line subscribers, a way of delivering "incremental revenue on top of a fixed cost base".
Latest accounts for Perlico Communications show that it generated turnover of €4.2 million in 2005, up from €1.1 million the previous year, and it reported an operating loss of €2.2 million, compared to an operating loss of €1 million in 2004. It employs 80 people, and Mr MacDonald expects that figure to grow to about 150 by the end of 2008.
Perlico began selling motor and travel insurance on its website two months ago via online broker 123.ie. Mr MacDonald said the response had been encouraging and the company would continue to sell products from 123.ie.
Mr MacDonald also confirmed that the company was still exploring a possible stock market listing later this year or early in 2008, but added that the capital requirements for the company have been reduced following its €20 million fundraising last year.
That valued the firm at €55 million, with Mr Smurfit paying €10 million to acquire his stake.
Other backers include Mr Mac-Donald's father, Malcolm, who is a former corporate financier with ICC and Bank of Scotland; David Martin, the former finance director of food and agriculture group IAWS; and Dr Jim Mountjoy, a technology entrepreneur.
