ITouch cuts operating losses by £12m
However, net cash outflow from operating activities hit £5.331m over the last nine months and the company’s cash reserves fell from £29.37m 12 months ago to £11.25m by the end of September.
Independent News and Media has a 38% stake in the group.
Commenting on the results, chairman Ivan Fallon said: “I am delighted that iTouch has made the breakthrough into EBITDA positive territory with an excellent third quarter result. We expect to build on this in the fourth quarter and in 2004. The group’s acquisition of Movilisto in Spain and the launch of the 8181 channel in Britain has confirmed our confidence that we have a profitable business model which is well placed to take advantage of the expected take-off in the mobile data services market.”
Sales hit £16.3m, compared to £10.3m in the third quarter of 2002. This represented a rise of 57% fuelled by the Spanish acquisition Movilisto which contributed £5.7m in revenues to the group.
Commenting on the results Davy Stockbrokers analyst Brendan Quinn said that following the results Davy will be increasing their final quarter revenue figures.
“Overall, we would, as indicated, expect the company to concentrate on the higher-margin data business in 2004. In its press release iTouch indicates that following the success in Britain it will now roll out the business model in other territories. A focus on data revenues in 2004 would deliver higher gross margins of 65% and EBITDA margins of 13.15%,” he said.
ITouch chief executive Wayne Pitout said they expect to be close to EBITDA break-even for the full year.
“The board is undertaking a strategic review of existing operations which may lead to some impairment of goodwill but will position the group for strong financial performance in 2004.”
