Eircom profits, but share price has lost buzz

By Andrew Bushe

DUBLIN — In its first results since its floatation last summer, the Irish telecommunications company Eircom has announced a 15 percent increase in pre-tax profits in the six months to the end of September.

But the figures resulted in a drop in the share price.

Following the flotation in Dublin, London and New York, the shares soared but then fell back below their issue price. They had recently rallied again just before the results were announced.

The decision to sell off the former state-owned Telecom Eireann resulted in the country’s biggest ever share boom with over 574,000 people — the majority of them first-time buyers — jumping on the stock market bandwagon.

It is crucial for the Irish government’s privatization campaign that the Eircom shares live up to investors’ expectations.

Eircom chief executive Alfie Kane on Thursday described the results as "very much in line with expectations."

The company made £126 million in pre-tax profits, compared with £113 million in the same period last year.

Kane said the company was planning expansion in Britain and hoped to have 20 percent of revenues from outside the country in five years.

Eircom already has access points in Belfast and London and was

opening a third in Manchester.

Any acquisitions would have to complement Eircom’s development strategy in the UK, be reasonably priced and bring a return to shareholders, Kane said.