Smart Telecom has concluded its strategic review, first announced at the company's AGM on September 8.
The plan agreed after the review will see about 250 jobs being cut as the company's staff numbers are reduced from 348 in August to about 100. It will also see a substantial reduction in other costs and the company's exit from low margin businesses.
Smart said the aim of the review was to focus the company on profitable and high-growth businesses. It said it would concentrate on 'controlled growth' in its corporate and residential broadband businesses. It added that it would sell off a number of non-core businesses - including payphones and pre-paid call cards - in the coming months.
Smart said it had secured continuing financial support from its key shareholders. Brendan Murtagh, who owns just under 20%, is to lend the company €2.4m. As part of the loan deal, Smart has granted security over its 10% stake in Broad Band Communications Limited to Mr Murtagh.
As part of its restructuring, Smart has engaged Hugh Cooney of BDO Simpson Xavier to assist the management with the financial restructuring of the business. Meanwhile, three of four current and former directors of Smart have put their 75% share of a property vehicle in trust for the benefit of the company. The four acquired Smart's premises in Citywest earlier this year.
Executive directors Paul Sullivan and Maria Pearl are resigning from the Smart board, as is non-executive director Ken Barry.
Analysts say they would have expected more action to be taken on Smart's loss-making businesses in the review. They say the sale of the payphone and callcards business is unlikely to raise much money as they are both low margin operations.
Smart also announced its results for the first half of this year, which show a 15% drop in turnover to €20.3m. Pre-tax losses climbed to €35.9m from €11.2m in the same period last year. The figures were affected by a 60% increase in costs due to higher spending on marketing, while there was a €4m write-down in the value of its assets. Smart has also written off nearly €10m linked to the costs of applying for a 3G mobile licence.
Smart now has 17,100 residential broadband customers and 160 corporate customers. The company said losses would be lower in the second half, but sales for the full year would be less than in 2005.
After initial falls, Smart shares climbed 3% to end at 4.25p on London's AIM market.