A Dublin-headquartered e-commerce firm headed by two brothers, which carries out payment processing for major players such as Ikea and Finnair, has reported revenues of US$6.2m, an increase of 66pc, as well as a dramatic 115pc increase in consulting fees.
FreeStar processed more than 19 billion transactions during the year, and revenues from this business came in at US$2m, up from US$1.9m last year.
However, the company is making losses of over US$16.5m, which FreeStar’s chief financial officer, Ciaran Egan, said was attributable to impairment charges and the value of stock options and shares issued to consultants and employees.
He justified this by saying that in the competitive industry FreeStar is active in, it has to attract top quality talent. “By utilising our financial resources in this fashion, we achieve that goal while conserving our cash.”
A large increase in consulting revenue – up 115pc – and hardware sales – up 164pc –were the primary components to the increase in revenue, with transaction processing and related revenues showing modest increases.
FreeStar’s chief executive, Paul Egan, said the introduction of hardware sales boosted revenues and has opened up an avenue for increased hardware sales going forward.
“In fiscal 2008, we announced a significant milestone – the first live processing of a transaction pursuant to our China Unionpay project.
“The revenue growth we achieved in 2008 occurred even though we are still in the early stages of seeing returns on our significant investment into the China Unionpay project and our other projects involving Monex and Global Refunds. Each of these could significantly impact our revenue streams in the future,” Egan said.
By John Kennedy