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The net profit is in contrast to a EUR4.5 million net loss in the same quarter last year. For the first quarter ending 30 June, revenues rose by 41 percent to EUR15.3 million, from EUR10.8 million in the same quarter last year. The increase is a reflection of a 40 percent increase in call volume, to 24.2 million, up from 17.3 million in the same quarter in the previous year.
"The really important number is the gross profit figure, which are up from 19 percent to 46 percent over four quarters," Chief Executive Liam Young told ElectricNews.Net "The implication is that the business can operate at those margins." Conduit's cost of service has decreased to EUR8.3 million from EUR8.7 million since the same quarter last year. Young attributed the cost reduction to Conduit's ability to aggressively manage costs.
Commenting on the fact that Conduit's workforce has fallen to 1,401 from 1,566 since this time last year, he said that Conduit has managed its higher call volume with a reduced workforce. The workforce reduction had come about through the high attrition rate in call centres, and Young said that the only layoffs at Conduit were in Conduit Software.
Conduit, which is quoted on the German Neuer Markt and the Irish ITEQ market, reported earnings per share of EUR0.05, up from a loss of EUR0.23 in the same quarter last year.
Young said that Conduit does not plan to pay a dividend, but will use its profits to invest in the UK market which is being deregulated over the next few months. Conduit plans to launch its 118899 number in the UK this autumn. "We currently have 11 percent of the UK market, but we have it from non-BT operators," said Young. "When the industry is deregulated, BT's 80 percent of the market will be open for competition."
A deregulated market will also permit other entrants to the market, but Young feels that Conduit has an early leader advantage. "New market entrants won't have an established market share and they won't have the experience of launching in 3 different countries," Young added. Conduit currently operates call centres in Dublin, Cardiff, Biel and Vienna and provides directory assistance services to clients in the UK, Ireland, Switzerland and Austria.
Conduit had previously said that it may move its primary listing from the Neuer Market to the London Stock Exchange. Young said that the move would make sense because most of Conduit's investors are either British or Irish, but declined to say whether it will happen in the short or medium term.
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