GO plc - Full-Year Results

Friday, February 12th, 2016

On 11 February, GO plc published its financial statements for the year ended 31 December 2015.

Performance Overview

During the year under review, the Group’s revenues improved by 1.2% to €123.7 million as the growth in income generated from retail activities compensated for the decline in turnover from wholesale activities with the latter being a direct consequence of regulatory intervention. Despite the highly competitive sector in which the Company operates in, the announcement also indicated that whilst retail revenue from legacy fixed-voice services continued to decline, GO experienced growth in all other retail sectors, especially mobile and cloud-based services.

On the expenditure side, cost of sales, administrative and related costs, excluding one-off items, amounted to €96.3 million (2014: €99.1 million). The overall reduction of €2.8 million (2.8%) is the result of continued efforts to drive down costs without compromising on customer experience.

Excluding the depreciation and amortisation figures, the Group’s normalised (excluding unusual items) earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to €52.8 million, an increase of 7.3% from the €49.2 million figure in the previous financial year. Moreover, net interest costs dropped considerably to just €0.8 million (-57.4%) largely reflecting a lower level of borrowings as the Group reduced its borrowings by €9.6 million during 2015.

As a result, the Group’s operating profit amounted to €27.8 million, an increase of 27.9% over the prior year result of €21.8 million.

During the year, GO was compelled to reclassify its investment in Forthnet from a ‘non-current asset classified as held for sale’ to an ‘investment in associate’, given the delay in the sale of GO’s investment in Forthnet. As a result of this reclassification, GO’s investment in Forthnet, which amounts to €6.6 million, had to be completely written down to a value of nil as a prior-year adjustment.

On the other hand, the Group’s investment in Cablenet is progressing in line with expectations as the Cypriot economy is showing signs of recovery. This resulted in an upside of €7.0 million in the value of GO’s options to convert its loan to Cablenet into equity and to further acquire majority control of the company. GO exercised these options in January 2016.

As a result of the reclassification of the investment in Forthnet, the prior year profit before tax has been restated to €13.7 million, whilst the increase in value of GO’s options to invest further in Cablenet helped achieve a profit before tax for the year ended 31 December 2015 of €34.2 million. After accounting for a tax charge of €7.8 million, GO’s net profit amounted to €26.4 million (adjusted net profit for 2014: €8.0 million). Accordingly, earnings per share improved to 26c1 from 7c9 as restated for 2014.

The Statement of Financial Position shows a 4.5% drop in total assets to €207.6 million largely related to the spin-off of Malta Properties Company plc. In 2015, the Group’s investments amounted to a cash outflow of €33.4 million, of which €7.5 million represent an additional investment in Cablenet. Investments in property, plant, equipment and intangible assets amounted to €25.9 million, €5.8 million more than the value invested in 2014, as the Group maintains an intensive investment programme through which it is upgrading its various networks and launching new technologies. Indeed, the rollout of the 4G network is expected to be completed during the first half of 2016 whilst the investments in Fibre-to-the-Home will be maintained in the coming years.

On the other hand, total liabilities increased from €113.8 million (restated) as at December 2014 to €115.5 million as at December 2015. Accordingly, shareholder’s funds amounted to €92.1 million, translating into a net asset value per share of €0.909 (2014: €1.021).

Dividend

The Directors recommended the payment of a final net dividend of €0.10 per share (2014: €0.07 per share) to all shareholders as at the close of trading on 07 April 2016. This dividend will be paid on 13 May subject to shareholders’ approval at the upcoming Annual General Meeting (AGM) scheduled to be held on 11 May.

Download

GO plc – Preliminary Statement of Group Results for the financial year ended 31 December 2015.

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