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ITouch announces STG10m in revenues
Tuesday, November 20 2001
by Matthew Clark


Mobile Services company iTouch released its results for the nine months to 30
September on Tuesday with revenues up almost 350 percent on the year.

The London-based company, which is 50 percent owned by Tony O'Reilly's
Independent News and Media, said that revenues for the nine months to 30
September 2001 were STG10 million, 344 percent up compared to the first nine
months of 2000. For the third quarter of 2001 alone, the company raked in STG4.0
million, a jump of 20 percent from the previous quarter.



Broken down into specific business areas, IVR (interactive voice response)
revenues for iTouch increased 87 percent to STG2.6 million, while SMS revenues
from the company's 624 corporate SMS customers were up over fourteen-fold to
STG4.7 million. Other revenues were STG2.7 million, up nearly 400 percent.  



ITouch, which operates in the UK, Australia, New Zealand, South Africa,
Indonesia, Thailand, Israel, Greece and Ireland, said its gross profit in the
first nine months was STG5.5 million and the gross margin was 55 percent. 



The company's massive jump in revenues also comes with heightened losses as the
firm's operations expand. The company's losses before amortisation, depreciation
and share incentive scheme charges were STG7.5 million in the first nine months,
up STG1.0 million in the same period a year ago. The firm's loss after interest,
depreciation, amortisation, tax and other exceptional charges and write-offs came
to STG12.2 million. STG2.6 million of this loss came in Q3 2001. This compares
with a loss on ordinary activities of STG9.9 million in the first nine months of
2000.



The basic loss per share for the nine month period was STG0.042 and the adjusted
loss per share was STG0.021. 



"We have had another good quarter, with revenues ahead of target for the fifth
consecutive quarter," said Ivan Fallon, chairman of iTouch. "Cash outflow was
only STG3.1 million in the quarter, including the impact of the Telequity
acquisition, and we ended the period with net cash of STG41.1 million." He went
on to say that the company expected to see higher revenues in Q4 following the
acquisition of Thus plc's voice business, and the company is "moving steadily"
towards profitability.



In the company's stated outlook, it said it expected growth in the next quarter
and in next year, but admitted that the market in general was "difficult."



All of this growth in the face of a weakening economy, especially in the
communications sector, can be attributed in part to iTouch's succession of
acquisitions in the past 12 months. This time last year the firm bought the New
Zealand mobile office applications developer Holliday in a STG7.4 million deal.
That was followed by its purchase of Telequity in Australia for AUS2.6 million
and its most recent acquisition of the branded and media sales elements of Thus
plc in the UK. The Thus deal was worth STG3.5 million in cash. 



The consequences of this rapid growth remain unclear but ITouch's financial
figures indicate that the company is coping with the growth well. It continues to
keep cash outflow under control and has not announced any major rounds of job
cuts in the year. Total headcount at the end of September stood at 407, up from
313 at 30 June 2001 largely reflecting the Telequity acquisition.

 

In the Irish market iTouch's revenues were up five percent on quarter two 2001
and up 24 percent on quarter three 2000. Nevertheless the firm said its third
quarter Smart Messaging revenues were down, while Q3 IVR revenues were up
significantly. The company also said it had 29 corporate SMS customers at the
quarter's end including Bank of Ireland and the Office of Public Works.