Alphyra, the technology group that was the subject of an €88.6 million management buyout (MBO) in April 2003, made a pre-tax profit of €827,000 that year. Colm Keena reports.

After tax, the group made a loss of €123,000. The MBO involved costs of €7 million, according to accounts just filed, making a total price tag of €95.6 million for the new owners.

Alphyra was delisted from the Dublin and London exchanges in April 2003. It has subsidiaries, some of them start ups, in the Republic, the UK and continental Europe. The bulk of the tax paid by the group was paid in the UK.

Potential deferred tax assets of €2.1 million arising from trading losses in certain countries were not recognised in the accounts. The accounts state that the directors believe the subsidiaries will, in the future, create sufficient taxable profits to utilise the losses, but that there is not currently sufficient evidence to support the recognition of a deferred tax asset.

Turnover in the Alphyra accounts is given as €1.14 billion and cost of sales as €1.11 billion, making a gross profit of €24.9 million.

The group is involved in the operation of in-store and other phone and utility top-up terminals. Because Alphyra takes on the credit risk for the entire amount expended in these transactions, new accounting standards mean it is required to treat the gross amounts as turnover, rather than the margin that accrues to the group from each transaction.

The accounts show that, in the period from January 1st to March 21st, 2003, Alphyra made a pre-tax loss of €4.5 million. During this period, the company was still listed on the Dublin and London exchanges.

The directors are Mr Barry Maloney, chairman, Mr John Nagle, chief executive, and Mr John Williamson, group finance director.

Mr Maloney has 28 million preferred shares in Rendina Ltd, the company used to acquire Alphyra. Mr Nagle has 2.3 million, and Mr Williamson has 102,000.

The accounts state that Benchmark Capital, with which Mr Maloney is associated, holds 63 per cent of Rendina and provided management and financing services during 2003 costing €550,000.

The group is primarily involved in the provision of electronic transactions and related services. These involve pre-paid mobile phone top up, debit/credit card processing and prepaid utilities.

The bulk of turnover came from the UK (€900 million), followed by the Republic and continental Europe.

Broken down by activity, the bulk of turnover was in mobile phone top-up (€693 million), followed by utility top-up (€434.8 million).

The average number employed by the group during the year was 380, with 236 of those working in operations and technical support. Aggregate payroll costs were €11 million. Directors' remuneration was €833,000.

Earlier this year, an attempt by Alphyra to purchase British payments terminal operator Paypoint failed when it was opposed by the Paypoint board.