Comnitel fails to stem losses trend as accounts show €8.5m deficit

CORK software firm Comnitel Technologies continued to make significant losses, its latest accounts show, racking up a deficit of €8.5 million in 2003.

The figure brings to €26 million the total Comnitel has lost since it was set up in 1999.

The company develops software for mobile phone operators and last November it agreed a takeover with American firm WatchMark. The company’s accounts show that it is heavily dependent on its partner for survival and it received €1.9m loan from WatchMark during the year.

In the accounts the directors said: “The financial statements have been prepared on a going concern basis which assumes that the group will continue in existence for the foreseeable future. The validity of this assumption depends on the parent company continuing its financial support.”

Turnover at Cork Airport Business Park-based company saw its turnover for the year to end December 2003 grow from just €35,137 to €1.2 million. The revenue was generated from a deal with O2 Ireland, the country’s second largest mobile operator.

The company said there was a reluctance by some mobile companies to purchase large software systems from small companies and its sales had suffered as a result. This led to its decision to merge with the American company.

The company’s balance sheet shows that its cash pile fell from €6.5 million to €669,213. The loss for the year pushed out its equity shareholder deficit to €25 million.

The combined firm employs around 200 people with 64 of these at Comnitel’s offices at the Cork Airport Business Part.

The wages and salary bill for the Irish firm for the year came to €4.5 million, giving an average annual pay packet of just under €71,000.

Directors’ pay came to €439,992 with pension and other emoluments included, a decrease on the €728,983 they received in 2002. Comnitel was set up by Corkmen Kieran Moynihan and Declan Fox. It has raised more than €35m from investors that include Enterprise Ireland, ICC Venture Capital, Hg Capital and Landesbank.

Last week WatchMark-Comnitel said it was acquiring the Metrica Service Assurance software group from ADC Telecommunications. The combined company will have the largest worldwide installed base of wireless service assurance products, with headquarters in Bellevue, Washington.