USIT Ireland Ltd has been turned around, producing a small profit for the first full financial year since it came out of examinership.

Accounts for the year to October 31st, 2003, just signed, show the new owners have been repaid €1.99 million in loan notes invested in the company in 2002.

This means they have acquired the company for €510,000 invested as share capital in 2002.

USIT Ireland, then under examinership was bought in July 2002 by Mr Michael Tunney, formerly of Woodchester bank, his partner Mr David Andrews, and ION Equity, with each new shareholder owning one-third of the company. This company concentrates on the Irish youth and student market.

The USIT Group, which included USIT Ireland collapsed with huge debts in the wake of the September 11th attacks in the US in 2001.

The USIT Ireland accounts for the year to October 2003 show there were exceptional costs of just under €600,000 arising out of the restructuring process and including the streamlining of the business, the sale of the non-core assets, and termination costs. Profits after tax were €6,384.

This compared to a €14.9 million loss the previous year.

Turnover for the year to October 2003 was €53.6 million, up 4 per cent.

Total net assets were €4.6 million. Bank debt was down €3.2 million to €7.7 million.

"Performance in quarter one 2004 is ahead of 2003. The business is now clearly focused and a considerable improvement in profitability is expected in 2004 and 2005," according to the directors' report. The accounts show that the bulk of the group's turnover, €40 million, came from its retail travel activities.

Exchange programmes accounted for €3.4 million and accommodation centres accounted for €5 million. The bulk of the company's business occurred in Ireland.

During the year the group disposed of No 1-2 Aston Place, in Dublin.

USIT Ireland employed an average of 277 people during the year, down from 301 the previous year. Staff costs were €7.4 million, up from €7 million the previous year.

The directors during the year were Mr Tunney (chairman), Mr Andrews, Mr Neil O'Leary and Mr Shane Nolan (chief executive).

The accounts state that year-on-year demand increased "despite factors such as the Gulf War, SARS, and the bomb attack in Bali."

The group has also been under pressure from changes in the sector such as reduced commissions paid by airlines and the increased use of the internet to book tickets.

The group has said that since it was taken over in 2002 a new management team has implemented a clearly focused business strategy, a cost reduction programme, product reviews and a new technology platform in an expanded network of 22 offices.

The overall structure has also been reorganised and bank debt restructured and reduced, with all costs absorbed in 2003.