Riverdeep posts operating profit of $64m

Dublin-based technology firm Riverdeep made an operating profit of $64.4 million (€53.3 million) in 2004, according to accounts filed recently.

However the educational software group made a consolidated loss of $114.94 million when interest, amortisation and reorganisation charges were taken into account. The equivalent figure in 2003 was $31.4 million.

The formerly listed group was take private in 2003 in a deal that valued it at $376 million. The operating profit in 2003 was $58.9 million.

Since being taken private, the group has withdrawn from its retail activities in a strategy aimed at increasing profitability. Reorganisation costs in 2004 were $24.68 million, according to the accounts. Interest charges were $84.9 million and amortisation costs were $67 million.

By end-2004 the group employed 267 people, down from 403 in 2003. The drop was largely attributable to the withdrawal from direct retail activity. Approximately 50 of the employees are in Ireland.

Directors' remuneration was $1.54 million. The directors who had shares in the group, according to the accounts, were Barry O'Callaghan and Patrick McDonagh, with the two men holding equal shareholdings. Each is understood to hold a one-third share.

During the year the group spent $16.8 million on research and development, according to the accounts. Turnover was $153 million.

"The message from the company's point of view is continuing to focus on enhancing profits for the shareholders," said president of corporate development, Tony Mulderry.

"The US schools business continues to be very successful," he said. "However, we see more opportunity for growth in non-US markets, while continuing to grow in the US." The group is developing its business in the UK, China and the Middle East.

The group had bank borrowings at year's end of $394.65 million. The notes to the accounts state that in March 2004 the group refinanced the debt incurred as part of the MBO.