GO plc - Full-Year Results

Tuesday, March 18th, 2014

On 18 March, GO plc published its financial statements for the year ended 31 December 2013.

Performance Overview

During the year under review, the GO Group registered a 4% drop in revenues to €122.14 million. The drop in revenue was attributed to downward pressure on retail prices from the intense competition prevailing in the local telecoms market as well as regulatory pressure on mobile termination rates. Meanwhile, GO reported continued growth in usage of most services with customer connections rising by 1% to over 500,000.

On the expenditure side, excluding unusual items, the Group registered a reduction of 3.5% in cost of sales, administrative expenses and other operating costs to €102.4 million. This reflects the Group’s focus on managing costs which resulted in costs savings especially in the areas of HR and sales. This led to a normalised EBITDA of €48.4 million representing a 5.7% drop from the previous year’s comparable figure. The EBITDA margin declined marginally to just below 40%.

Finance costs increased by 9.1% to €2.3 million despite the repayment of €4.6 million in loans.

The financials of GO were impacted by €2.8 million in usual items within administrative expenses and other related costs. Meanwhile, in 2012, GO’s income statement benefitted from a one-off gain related to the property exchange with the Government of Malta whilst also being adversely impacted by a further €4.8 million in impairments largely relating to the indirect investment in Forthnet which is now completely written-off.

Overall, the Group registered a pre-tax profit of €15.6 million representing a 42.6% decline from the previous year’s figure which was boosted by the property exchange. After accounting for a tax charge of €3.9 million (2012: €9.2 million), the net profits for 2013 also dropped by 32.9% to €11.75 million which translates into an earnings per share of €0.116 (2012: €0.173).

From a cash perspective, the Group maintained its strong cash generation as normalised cash flow from operations were practically unchanged at almost €40 million. This was also sufficient to cover the Group’s cash outflows in connection with its investment programme (mainly in its technology) and financing activities (mainly repayment of debt and payment of dividend).

The Statement of Financial Position shows a 1.3% drop in total assets to €234.98 million which includes the property portfolio of €55 million. During a meeting with the financial community, the CFO Edmond Brincat explained that the Group will be in a position to start disposing of some of its properties in 2016 (details in this regard will be published later on this year or in 2015). Total liabilities also declined by 3.7% to €131.48 million largely reflecting the aforementioned €4.6 million reduction in total debt to €72.26 million. Meanwhile, total equity increased by 1.9% to €103.5 million largely reflecting the profit registered during the year under review which also offset the impact of the dividend in respect of the previous financial year.

Dividend

The Directors recommended a final net dividend of €0.07 per share representing a 30% drop from the previous year’s dividend in line with the decline in profits. Shareholders as at the close of trading on 1 April will be eligible to receive this dividend on 9 May subject to shareholder approval at the upcoming Annual General Meeting scheduled to be held on Tuesday 6 May.

Downloads

GO plc – Preliminary Statement of results for the financial year ended 31 December 2013.

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