Baltimore joins the elite

Baltimore has made its name in a key area of e-commerce

By business correspondent Mary Gahan

It might not be a big name like those it is replacing in the FTSE 100 but Baltimore Technologies is undoubtedly a big player.

Companies such as Thames Water, Scottish & Newcastle, Allied Domecq and Hanson have lost their places in the UK's main share index, as high-tech newcomers stake their claim.

So how does Baltimore, which just three years ago employed a handful of people in Ireland, now find itself in such exalted company?

Mary Gahan

It had been developing security systems for e-commerce, to protect valuable company information and safeguard data used to buy and sell over the internet.

Then chartered accountant Fran Rooney led an external buyout. Since 1996, Baltimore Technologies has grown to employ 500 people in 21 cities around the world.

But it is the growth in the share price that has caused the biggest ripples. A year ago, it stood at 650p - it has since gone as high as £148, before settling back nearer to £121.

"Everything we have delivered has been along the lines of our plan that we developed three years ago," says chief executive Mr Rooney.

Fran Rooney: An honour to be in the FTSE 100

"What we could not have predicted, and didn't even attempt to, was what our market capitalisation would be."

But Mr Rooney hopes that increase is because investors believe in the company, and not just because they see it as another get-rich-quick dot.com stock.

"A major mistake can be made in investing just in anything that's to do with the internet," he says.

"But what we have here is customers, products and an infrastructure that we have delivered to the marketplace that's different from the dot.com type stocks."

Staying power

Robert Hussey, of NCB stockbrokers in Dublin, agrees that Baltimore has staying power.

"The attraction of the stock is very simple," he says.

"The next play is the facilitators of the internet, and that is what this company does. It secures the pipeline to communicate information, so it's the second phase in the internet play."

Don't be fooled by the name - the company's proud of its Irish roots

Mr Rooney is also unworried by the fact that Baltimore will move into the FTSE 100 in the red - last year it made a loss of £31m.

"We were profitable just over 18 months ago and our decision was to invest in building the company," he explains.

"We could have been a strong European player and profitable, but we decided to be a global player."

There is a global element to the company. While the name can be a help in the US, with clients presuming it's based in Maryland, it is in fact named for Baltimore in County Cork.

And it is proud that it combines Ireland's technology skills base with the management benefits of having its HQ in England.

Being in the FTSE 100 is a great honour, says Fran Rooney.

"We never set being in the FTSE as a target, but we always thought we would be a large company on the London Stock Exchange."

Positive signal

Jim Power, chief economist at the Bank of Ireland, thinks Baltimore could be a pioneer.

"It says a lot about what's happened to the Irish economy over the last decade and sends a very positive signal about where this economy is going into the fuutre.

"Ireland has a very skilled high-tech workforce and a lot of money has been invested in high technology education and that's now paying dividends," says Mr Power.

"I would be confident that over the coming years we will see the emergence of other Irish IT companies that will make it into the FTSE 100."