Revenues at British retail giant Tesco’s mobile business in Ireland doubled last year to €21.5 million as the firm recorded a pre-tax profit of over €5m.
The joint venture business between Tesco and O2 Ireland was established in Oct 2007.
New figures returned to the Companies Office for Tesco Mobile Ireland show the firm recorded a pre-tax profit last year of €5.3m after recording losses of €678,000 in 2010.
This followed the firm increasing by 104% its revenues from €10.5m to €21.5m in the 12 months to the end of December last.
According to the directors’ report, “the key elements of the operation worked in line with the plan. The market continued to be very competitive during the year with the other networks continuing to promote aggressive price plans”.
On the firm’s likely future developments, the accounts state the company has grown its share of the prepaid mobile market in 2011 by leveraging its simple value for money offering.
It adds: “The company launched a pay monthly proposition into the market place in Oct 2011. The company has based its business plan on continuing to grow market share in 2012.”
The filings confirm the company received €11m for the purpose of financing its launch and expansion and had drawn down the full €11m by the end of 2009.
An additional €2m was drawn down during 2010 and €6m of the €13m loan was repaid during 2011 and remaining balance will be repayable in 2012.
“Accordingly, the directors believe that based on financial projections of the company and if necessary, financial support from its shareholders, the company will have sufficient funding for its operating requirements for this period and therefore consider it appropriate to adopt the going concern basis in the preparation of the financial statements,” the report states.
The firm recorded an operating profit of €5.9m in 2011 compared to just €8,000 in 2010. The chief factor behind the rise in profits was the firm’s selling and administrative expenses increasing from €5.1m to €5.6m compared to revenues more than doubling.
The company also more than doubled its gross profit from €5.1m to €11.5m.
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