The Board of Directors of Maltacom plc today published the Preliminary Profits Statement for the year ended 31 December 2004 and have proposed that the Annual General Meeting to be held on 20 May 2005 approves the payment of a net dividend of 2c1 per share.
Total turnover of the Maltacom Group in 2004 amounted to Lm54.7 million, representing a marginal drop from the Lm55.1 million registered in 2003 in spite of increasing competition and downward pressure on prices in the fixed line business.
Cost of sales increased by 3.2% to Lm29.9 million. In the first half of the year the increase in costs was attributed to a one-off item of expenditure at Company level related to the printing of the new telephone directory and increases in certain costs in a number of the Group’s subsidiaries. The gross profit for the period under review amounted to Lm24.8 million (2003: Lm26.2 million) resulting in a gross profit margin of 45.4% compared to 47.5% in 2003. Administrative and distribution expenses incurred during the year of Lm10.1 million represent a 2.4% rise over 2003. Group operating profit before exceptional items after accounting for other operating income and charges amounted to Lm14.4 million (2003: Lm15.4 million), resulting in an operating margin of 26.4%.
During the past two years there were certain exceptional items which showed up in the accounts. The exceptional items in 2003, which resulted in an overall net gain of Lm6.3 million, related mainly to the profit on the disposal of the sale of shares in Vodafone Malta Ltd. and Inmarsat Ventures plc, VAT in dispute and an adjustment for the impairment of tangible fixed assets. On the other hand in 2004, there was a net loss of Lm1.25 million resulting from the settlement of a past liability related to pensions and gratuities.
The Group profit before tax in 2004 amounted to just under Lm12 million. If one were to adjust this to take account of the exceptional items Group pre-tax profit works out at Lm13.2 million compared to Lm14.3 million in 2003 (after the net exceptional gain). Moreover, in 2003 there was another one-off item which had a positive effect on turnover and profitability and this related to the agreement reached between Maltacom and Vodafone Malta Ltd. This boosted Maltacom’s 2003 profitability by just over Lm1 million comprising Lm720,000 by way of additional revenues and the reversal in the provision of doubtful debts and Lm308,000 by way of an exit dividend. Hence the profitability of the Maltacom Group in 2004 was roughly at the same level as in 2003. The 2004 Group profit after tax of Lm6.8 million translates into an earnings per share of 6c7.
Total assets as at 31 December 2004 amounted to Lm115.7 million with shareholders' funds of Lm78.2 million, resulting in a book value per share of 77.2 cents. Maltacom's net debt continued to drop during the reporting period and as at the end of the year amounted to Lm5.6 million translating into a gearing ratio of only 7.2%.
The Board of Directors have proposed the payment of a net dividend of 2c1 per share to all shareholders on the Company’s register as at close of trading on 22 April 2005. Following approval at the Annual General Meeting on 20 May, the dividend will be paid by 31 May 2005. Total dividends in respect of the financial year ended 31 December 2004 amounts to 4c9 net per share (6c49 gross of tax) split up as follows: a gross dividend of 1c71 (1c2 net) paid to all shareholders on 30 April 2004, a gross dividend of 2c29 (1c6 net) paid on 20 December 2004 and a proposed gross final dividend of 2c49 (2c1 net).
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