Eircom set to rebrand on back of strong year

Eircom is set to build on its performance recovery by undertaking a rebranding exercise, which is set to be unveiled this month.

Management was coy on the details yesterday other than to suggest the timeframe and that the move is being made to greater illustrate the company’s status in a growing and more competitive marketplace.

It has already been reported that the company has registered up to 50 names, in recent months, including the likes of Eirmobile, Eirbusiness, Eirnetworks, Eirbroadband, ‘It’s Easy’, and Openeir.

“The decision to launch a new brand underlines the extent to which the company has evolved our commitment to Ireland and our ambition for the future,” said chief executive Richard Moat.

The former State-owned diversified communication company’s last big branding overhaul was when it switched its name from Telecom Éireann to Eircom at the time of its first flotation in 1999.

The news of the rebrand plan coincided with a strong set of annual results for Eircom; which showed a 3% increase in earnings to €481m for the 12 months to the end of June and broadly unchanged revenues of just under €1.27bn.

Strong growth was evident across all platforms of broadband, mobile, and television. As much as 25% of customers are now on multi-product ‘bundle’ packages.

In the three months to the end of June, Eircom saw earnings rise by 12%, year-on-year, to €135m, operating costs come down by 5% and revenue rise by 5% to €325m. That marked the company’s first year-on-year sales growth in a single quarter for seven years.

“This has been a transformative year in the financial and operational performance of the group,” Mr Moat said, adding that the revenue growth was the result of “implementing a consistent strategy over the past three years, centred on network investment.”

Eircom has spent more than €1bn over that period, with capital expenditure topping €290m in the most recent financial year.

Mr Moat said investment will continue, but will not be as high as last year’s total in the current financial year. He said investment is underpinning Eircom’s recovery.

The company’s debt was restructured recently and only €159m (total debt was €2.2bn at the end of 2014 and net debt is still currently nearly five times earnings) needs to be paid back by 2019, with the maturity date for the remainder not falling until 2022.

Management will instead focus on investing in growth until a further repayment or refinancing is due.

While the company shelved IPO plans last year, such talk resurfaced among analysts in early summer. Mr Moat reiterated yesterday that there is no plan to go back to the market in the foreseeable future.

He added there is no prospect of the company being taken over. Eircom rebuffed a €3.3bn takeover offer, from an unnamed source, in May.

Mr Moat said the company’s investors — Eircom is nearly 40% owned by New York-based hedge fund operator Anchorage Capital — are happy with the progress and are long-term owners.

Eircom has had seven different owners since the late 1990s. Low single-digit percentage earnings growth is anticipated this year and management has said improving customer experiences is a “huge focus” following instances of over-charging reported recently.


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