CR2 increases turnover by 11%: ThePost.ie


TCH Archives > Sunday Business Post > 2005/08/14 > CR2 increases turnover by 11%

CR2 increases turnover by 11%
Sunday, August 14, 2005 - By Gavin Daly
CR2, the Dublin firm that recently raised €10 million from investors, made a pre-tax loss of €3.3 million last year after a restructuring that cost €1 million.

Turnover at the banking software company rose more than 11 per cent to €12.8 million in the year to the end of June 2004, according to accounts just filed. The finances were a significant improvement on the previous year, whenCR2made a pre-tax loss of €12.3 million on turnover of €11.5 million.

Last year's loss included the €1 million cost of “a fundamental restructuring of the group's operations'‘, which included layoffs and the closure of a British office, according to the accounts. They describe last year as “a year of change and consolidation for the group'‘ with a “satisfactory'‘ growth in turnover.

“The cost base was reduced considerably making the attainment of sustained profitability much more achievable,” the accounts state. CR2's shareholders gave the company €1.225 million in long-term loans during the financial year, and it also raised a loan of €1.75 million from a new lender.

Despite the improved finances, CR2 had an accumulated loss of €50.3 million at the end of June last year. Since then, the firm has appointed a new chief executive, Martin Dolan, and completed a €10 million funding deal that valued it at about €25 million.

Earlier this year, Dolan said that CR2 should make a profit of about €1 million on turnover of €14 million in the year to June 2005. The company employs about 120 people and its software is used by more than 120 banks in 65 countries, including India, Libya and South Africa.

Dolan said the company did not plan to raise more funding and should be ready for an exit within three to five years, most likely through a trade sale. A listing on a junior market such as the Alternative Investment Market “doesn't make sense'‘, he said.

Trinity Venture Capital is the largest shareholder in CR2, which has raised about €50 million in backing since it was founded in 1997.

ACT Venture Capital and the firm's management team -Dolan, Ronan Murray, Kieran Kilcullen and Keith Holmes - are also major shareholders.

CR2's founders, Cian Kinsella and Ron Downey, and existing investors, GIMV and AlpInvest, did not reinvest in the recent funding round and have reduced their stakes.

Kieran Nagle, a founder director with Kinsella and Downey of Kindle Banking Systems, is chairman of CR2.