Eir stays silent on reports of Setanta Sports takeover

Diversified telecommunications group Eir has said it is open to partaking in merger and acquisition activity, over a wide range of areas, but has declined to comment on reports linking it to a takeover of broadcaster Setanta Sports.

The recently renamed group, formerly Eircom, yesterday reported further financial and operational progress for the first quarter of its current financial year and said it holds ambition to maintain growth in a fiercely competitive market.

When asked yesterday about recent reports suggesting the telecom is in advanced talks to acquire Setanta Sports, Eir chief executive, Richard Moat said management was not in a position to react to speculation.

However, he said the company is continually reviewing merger and acquisition opportunities over a wide range of areas and that the company could take advantage if it saw a good opportunity.

Yesterday, Eir reported a 4% year-on-year increase in revenues for the three months to the end of September, to €325m.

Earnings before interest, tax, depreciation and amortisation were up by 6% on the same quarter last year, at €120m.

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The company has now gone two consecutive quarters with annualised revenue increases and has seen year-on-year earnings grow for the past three quarters.

Mr Moat said the fourth quarter of Eir’s last financial year was a turning point and that this quarter indicates that such growth may become a trend.

“This solid financial performance, together with our recent brand launch, provides real momentum as we continue our transformation in an increasingly competitive market,” he said.

However, Mr Moat also acknowledged that this financial year (the 12 months up to the end of next June) is likely to be a tough one for Eir, given the high levels of competition in the marketplace.

He expects the company to generate low single digit earnings growth for the year and to sustain recent levels of revenue growth.

He also reiterated that there are no change of ownership plans, either via an initial public offering or trade sale .

The first quarter saw consistent growth in Eir’s key product offerings.

Total broadband connections rose 16,000 in the quarter to 798,000, with 41% being high speed connections.

The period also saw the strongest quarter for fibre connections to date, with 45,000 signing up.

The mobile offering also did well, with 11,000 new post-pay customers signing up and 4G customer numbers totalling 317,000.

On the TV side, the eirVision offering has a subscriber base of 43,000.

Eir is aiming to be the leader in ‘quad-play’ customers, spanning internet, mobile, television and fixed line telephony services.

It now has 65% of its customer base using two or more of its services.

It said the more customers using more than one service tends to result in them staying with the provider for longer and increasing their product usage.

According to Eir’s chief financial officer Huib Costermans: “These are a pleasing set of financial results, continuing a recent trend of both top line and bottom line single digit growth.

“However, against a backdrop of increased competitive intensity, we have to continue to make progress on our operational key performance indicators.”