Openet cuts losses as revenue soars

Pre-tax losses at Irish software firm, Openet last year narrowed to €2.4m after revenues jumped 11% to €97.9m.

The Dublin-based firm postponed plans last year for a floatation on the Nasdaq in New York after problems relating to the floatation of Facebook last May.

However, new figures by Openet Telecom Ltd show that the firm continued to expand last year, employing an additional 125 staff, to bring headcount to 618 while its R&D spend increased by 80%.

Openet is Ireland’s largest privately held tech firm and revenues last year increased from €88.56m to €97.9m as pre-tax losses narrowed by 8% from €2.74m to €2.4m.

Directors include former Esat executive, Barry Maloney, and, according to the directors’ report, “the reduction in underlying profitability of the business was due to continuing significant investment in the recruitment of new staff in areas such as sales, product development, applications, engineering and support”.

The directors state that “overall 2012 was a very significant year in which the company undertook a further rapid expansion of its investment in growing the business, transformation of its accounting framework, review and assessment of its capital structure, while at the same time continuing to grow its revenues and expand its customer focus.”

The directors said that the company looks forward to continued growth in activity in 2013.

The loss for 2012 was €76,000 when depreciation, charges relating to share-based payments and exceptional legal and professional fees are taken into account.

The firm’s gross profit last year increased by 20%, going from €46.6m to €56m. However, increases in sales and marketing expenses and R&D from €10m to €18.8m contributed to the operating loss of €1.4m. Net finance costs of €927,000 resulted in the pre-tax loss of €2.4m.

Some 73% or €71.2m of revenues were last year generated in North America with the rest of world generating the remaining 27% or €26.69m.

The filings show that €62.6m of revenues were generated by ‘services and other’ with licence generating €21.7m with support and maintenance generating €13.59m

The figures confirm that staff costs last year increased by 25% from €44.25m to €55.24m.

Remuneration for the directors last year increased by 64%, from €837,000 to €1.378m.