GO plc - Full-Year Results

Tuesday, February 21st, 2017

On 21 February, GO plc published its financial statements for the year ended 31 December 2016.

Performance Overview

During the year under review, the Group’s revenues improved by 26.9% to a record of nearly €157.0 million (+€33.3 million) mainly reflecting the consolidation of revenues generated by the now 51% controlled Cypriot subsidiary – Cablenet Communications System Limited (“Cablenet”) – and, to a much lesser extent, of Kinetix IT Solutions Limited (“Kinetix”). Indeed, Cablenet’s share of the increase in total revenues amounted to €29.1 million which, on a standalone basis, advanced by 11.9% in 2016. Revenues generated from the Maltese operations advanced by 3.4% to €127.9 million (FY2015: €123.7 million) as the Group consolidated new revenue streams following the acquisition of a controlling interest in Kinetix as well as the 1.9% growth in GO’s retail and wholesale activities. In this respect, the Group explained that whilst retail revenue from legacy fixed voice service continued to decline, it experienced growth in all other retail sectors, particularly mobile and cloud-based services.

On the expenditure side, cost of sales and administrative and other related expenses increased by €35.6 million to €131.9 million (FY2015: €96.3 million) of which €29.7 million were the result of the consolidation of the results of Cablenet and amortisation charges that result from the intangible assets created as a result of the acquisition of both Cablenet and Kinetix. Excluding depreciation and amortisation costs, GO’s EBITDA surged by 19.4% (or €10.0 million) to €61.6 million. Nonetheless, given the considerable increase in depreciation and amortisation charges, operating profits decreased by 5.6% to €26.3 million (FY2015: €27.8 million).

The 2016 financial performance of GO was also adversely impacted by higher net finance costs (+€1.71 million) and a €1.5 million write-off on the investment in the Greek telecoms company Forthnet S.A. which has now been completely impaired. Again, the higher net finance costs reflect the consolidated borrowings of Cablenet. Indeed, on a Company level, GO’s borrowings actually fell to €41.2 million from €49.8 million as at 31 December 2015. During 2016, GO also received in full a loan of €16.0 million which it had extended to Malta Properties Company plc.

Overall, the Group posted a profit before tax of €28.1 million and a net profit of €20.3 million, representing a drop of 23.2% when compared to the net profit figure of €26.4 million for the previous financial year. Accordingly, earnings per share dropped to €0.182 from €0.261 in FY2015.

The Statement of Financial Position shows a 20.3% growth in total assets to €249.8 million largely reflecting the investments made in new property, plant and equipment (+€28.6 million) and the sharp increase in intangible assets to €67.7 million (FY2015: €13.2 million) following the acquisition of a controlling-interest in Cablenet and Kinetix which outweighed the termination of loans receivable from Malta Properties Company plc and Cablenet (€26.5 million) as well as the conversion of the option to acquire shares in Cablenet into equity. Similarly, total liabilities increased to €140.6 million from €115.5 million as at 31 December 2015 reflecting higher borrowings and trade and other payables following the consolidation of both Cablenet and Kinetix as well as an €8.7 million drop in derivative financial instruments (also related with the acquisition of a controlling interest in Cablenet). Shareholder’s funds amounted to €109.2 million which translates into a net asset value per share of €0.998 (FY2015: €0.909).

Dividend

The Directors recommended the payment of a final net dividend of €0.11 per share which is 10% higher than the net dividend for FY2015. Shareholders as at the close of trading on Wednesday 29 March 2017 will be entitled to this dividend which is payable on Friday 5 May 2017 subject to shareholders’ approval at the upcoming Annual General Meeting scheduled to be held on Wednesday 3 May 2017.

Download

GO plc – Preliminary Statement of Group Results for the financial year ended 31 December 2016.

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