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Total revenue in the half year ending 30 September came to EUR23.89 million, compared to EUR12.57 million in the same period a year earlier. EBITDA also grew significantly to EUR5.03 million, compared to the EUR0.98 million that the company reported for H1 2000.
Despite the significant growth in revenues and earnings, the firm's operating loss climbed by almost EUR6 million to EUR7.33 million on the half year. This amounted to a loss per share of around EUR0.37, much higher than the EUR0.10 that Conduit announced this time last year, but in line with expectations.
"I think they are very solid set of results," said Liam Young, chief executive of Conduit. "They show a movement toward bottom line profitability." Young emphasised that the company, which has expanded from the Irish market into the UK, Austria and Switzerland in recent years, would now look to improve efficiencies in the markets in which it operates. He said that while the firm would watch other markets "with interest," it had no expectations to expand in the remainder of this fiscal year.
Commenting on the company's outlook for the upcoming half year, Young told ElectricNews.Net that it expected the group to be EDITDA positive by the end of its fiscal 2001 year. Its Irish and its UK business were EBITDA positive in the second quarter of 2001.
Last week it emerged that Sonera was exiting its directory assistance business, which would mean the sale of its 10 percent stake in Conduit. Those shares are due to be sold to 3i, the investment firm. Young said the sale would have little impact on Conduit in terms of operations but admitted that the sale would relieve some of the uncertainly in the minds of investors. The day that sale was announced Conduit shares jumped 10 percent.
Yet this consolidation will not necessarily lead to job cuts, Young said. Conduit now employs around 1417, 45 percent more than the 979 staff it had at the end of H1 2000 but down from the 1570 level it employed at the end of Q1. Young said the job losses had come from "natural attrition," and as the company moved forward with more automation it did not need to fill the absent posts.
The company also said that the deregulation in the UK directory enquires sector, its largest market with an eight percent share, is expected to lead to a growth in Conduit's business in the coming year. Young said the UK market is worth approximately EUR500 million per annum, and following deregulation the firm expects to capture a greater share of that business.
In Ireland Conduit has a 35 percent market share and operates the 11850 directory assistance number as well as directory assistance for Esat Telecom and Digifone.
Another division of the company, Conduit Software, experienced lengthening sales cycles in the half year, the company said. It said that the business was finding it difficult to meet its sales targets for the financial year but remained confident that the troubles in that division would not impact on the group's ability to turn EBITDA profitable in the coming quarters. Conduit Software specialises in the development of value added services for mobile operators and information service providers with expertise in call centre solutions, mobile messaging and information access technologies.
The division, which employs around 25, also serves Conduit's own automation and software needs. Young said that despite the "difficult market" he remains hopeful for its prospects as conditions improve.
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