Irish Continental Group's current 15 per cent return on capital would rise to 20 per cent as its fleet of ships depreciate in value, the company's chief executive, Mr Eamonn Rothwell, predicted yesterday.
Speaking after the annual general meeting, Mr Rothwell said he expected the company's new £29 million (€36.8 million) catamaran, the Jonathan Swift, to be operating in early June on the Dublin-Holyhead route, increasing frequency of sailings by 200 per cent to six daily departures. The new fast craft will complete four of these trips in 1 hour 50 minutes compared to 3 hours 15 minutes for the traditional cruise ferry.
"That will develop another niche in the market in terms of short trips to Ireland and which we could not have accommodated in the past," he said.
On days that the Jonathan Swift could not sail because of bad weather conditions, the cruise ferry, Isle of Inismore, would be used.
Although revenue from foot passengers had suffered because of the increase in airline traffic and the abolition of duty free would have an impact, he said ferries continued to offer families travelling with a car a competitive service.
But duty-free abolition could loosen up the market for purchasing or chartering ferry vessels. Scandanavian ferry companies would be severely affected because of a tradition there of taking trips to avail of cheaper alcohol. Irish Continental Group (ICG) may also be facing the prospect of having the Pride of Bilbao, which P&0 operates between England and Spain, returned to its ownership in May.
The company would examine the option of using the ship for a continental run although other options were to renew the charter or offer it to another company. "The continent is a large market" Mr Rothwell said.
Growth in the company's freight business was set to continue, he added, as economic integration continued with Britain and continental economies.
The company enjoyed a 21 per cent rise in pre-tax profits to £17.6 million (€22.3 million) on a £168.1 million (€213.3 million) turnover in the year to October 31st, 1998.
