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Tiscali to squeeze overheads as losses swell
Pips getting ready to squeak?
Italian ISP - Tiscali - vowed to cut overheads by 15 per cent over the next year after posting increased losses for the three months to June.
Pre-tax losses swelled to €65.5m (£43.5m)in Q2, compared to €56.3m (£37m) in the same period last year even though Q2 revenues jumped 26 per cent to €272.6m (£181m).
While Tiscali reports that it will start generating free cash flows "on an ongoing basis" from Q4, its attention is firmly fixed on cutting overheads. Part of that should come when the ISP completes the sale of non-core country operations later this year. And there could well be jobs cuts too.
According to a Tiscali: "The cuts will include personnel cuts, as far as the planned dismissals are concerned, as well as a reorganisation of the corporate structure."
What's clear, is that the country operations being flogged off by Tiscali aren't pulling their weight. The UK, Benelux, France, Germany and Itlay account for 80 per cent of Tiscali's revenue, with the UK chipping in a massive 24 per cent.
"In view of increasing operating efficiency and taking also into account the planned disposals of assets, the Board of Director of Tiscali has defined the guidelines of a cost reduction plan, with the goal of reducing operating costs (other than marketing) by 15 per cent in the next 12 months," the company said it a statement.
As of the end of June, Tiscali had 1.44m ADSL punters across Europe up threefold compared to last year and is signing up around 17,000 new subscribers a week. The total number of active users was 7.9m of which 6.5m were dialup users.