Pre-tax profits at IT firm soar by 400%

A SHANNON-BASED IT firm last year recorded a five-fold increase in pre-tax profits to $13.2 million (€9.3m).

According to accounts posted with the Companies’ Office, the US-owned Enterasys Networks Distribution Ltd increased its pre-tax profits from $2.6m to $13.6m to the end of December last.

The Shannon unit is the distribution centre for the company’s products in Europe, the Middle East, Africa and Asia, and increased its employee numbers to 62 last year.

The company recorded the increase in pre-tax profits after revenues jumped by 46% from $107.9m to $157.5m. The 2010 period represents a 12-month period, while the 2009 period represented a nine-month period.

The principal activity of the company is the distribution of local area network (LAN) and enterprise network systems.

According to the directors, “the company believes its solutions offer customers secure, high capacity and cost-effective network connectivity required to facilitate the exchange of information between employees, customers, business partners and other network users.”

The accounts show that the company increased its operating profits by 240% from $4.1m to $15.1m last year.

The company had a shareholders’ deficit of $1.9m last year. It includes accumulated losses of $142.8m and a share premium of $140m at the end of September.

A note attached to the accounts states that the company’s immediate parent, Enterasys Network “has signed an agreement to contribute unconditionally and absolutely, for no consideration, capital contribution if and when required to support the company”.

The company’s research and development spend increased by 28% in 2010 from $16.6m to $21m. Cost of sales increased by 42% from $51.4m to $73.4m, while the company’s operating expenses increased by 32% from $52.3m to $69m.

The company increased the numbers it employed by more than one third, from 60 to 62 in 2010 with the company’s staff costs increasing by 41% from $3.3m to $4.7m. The filings also show that the directors’ remuneration increased by 50% from $299,689 to $450,898.