Feeds

PhoneLink profitability in sight says CEO

Acquisition strategy drives return to the black -- but not this year

  • alert
  • submit to reddit

The Essential Guide to IT Transformation

"We've been described as a stock-market dog," said Graham Ramsey, CEO of PhoneLink, the loss-making Tel-Me online content provider, "but our acquisition strategy is working and we're very bullish about the future." In 1996 PhoneLink reported £4 million turnover and a £7 million loss. By March 1997, turnover was static but the loss doubled to £6 million. By March 1998, the loss was only £3 million, but then again, so was turnover. Come August 1988, turnover shot up to £55 million and the newly made-over company said it was poised to move into profitability. "We had to generate organic growth but we knew it wouldn't be enough," explained Ramsey, who was brought in to mastermind PhoneLink's recovery and acquisition strategy, and the company paid around £16 million for two very profitable businesses, GB Mailing and Seaforths Travel Agency. Both deals included deferred and share elements, but Ramsey said the share swaps indicated mutual confidence, and that PhoneLink's current wellbeing justifies that confidence. The Seaforths Travel Agency has an online commerce product called Ticket Window that interfaces with the Galileo reservation system and PhoneLink integrated it with the Tel-Me service. "Over the past 18 months we've seen 20 per cent of business come from Seaforth," said Ramsey, and PhoneLink has picked up a raft of awards for Seaforth, including the Service award in BT's Electronic Business Awards for Innovations in E-Business. Electronic business is a growth area for PhoneLink and the company is hatching new products and services. The second acquisition, GB Information Management, specialises in addressing systems and they dovetail neatly with PhoneLink's bureau telephone numbering services. So is it all rosy again at the one-time high flier? No, not quite, according to Ramsay. The company is due to report in December and it's in the closed period now, unable to make any financial forecasts, but Ramsay confirmed that the core business remains unprofitable. PhoneLink employs 220 staff, no change from 1996, but it has shed over 170 employees and implemented stringent cost-cutting in the core business, according to financial director Richard Law. Ramsay is confident that the business will be profitable, but its recovery may owe less to the original Tel-Me technology than to the added value systems from Seaforth and GB Information. Input from acquisitions has fuelled PhoneLink's recovery, and while Ramsay sees lots of opportunities for dynamic growth, "we won't discount future acquisitions," he said. PhoneLink has still to convince the market and its share price, once an over-hyped £4.40, hovers around £0.40 today. ® Click for more stories

Boost IT visibility and business value

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.