GO plc - Full Year Results and Dividend Announcement

Maltacom’s 2005 full-year results were published on 7 April 2006 following a Board of Directors meeting held a day earlier. The Directors are proposing to the Annual General Meeting a final net dividend of 4c5 per share to all shareholders on the Company’s register as at Tuesday 18 April 2006.

Maltacom Group’s turnover during the twelve months ended 31 December 2005 was marginally higher at Lm55 million. However, a 4.9% drop in cost of sales and a Lm0.7 million write-back of international traffic and leased circuit costs resulted in a Group gross profit of Lm27.1 million, a 9.9% increase over the gross profit generated in 2004.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) amounted to Lm23.9 million, representing an increase of 3.7% on the previous year’s EBITDA. The EBITDA margin improved to 43.5% from 42.2% achieved in 2004. This is well above the international benchmark of a 35.5% EBITDA margin by incumbent telecom operators. Administrative and distribution expenses of Lm11.3 million represent a 10.1% increase over the previous year. In 2005, the Group did not provide for any contributions to pensions and gratuities whereas an amount of Lm1.1 million was provided for in 2004. Maltacom’s operating profit before exceptional items and net financing income amounted to Lm15.6 million, a rise of 19.3% over 2004. As a result of a strong rise in financial investments and a drop in loans and other borrowings, the Group earned net interest income of Lm0.36 million compared to financing costs of Lm0.5 million the previous year.
The Group’s profit before tax for the year amounted to Lm16.1 million, a rise of 31.5% over the level achieved in 2004. After accounting for taxation of Lm4.8 million, the profit for the period amounts to Lm11.2 million, a rise of 50.3% on the previous year. Earnings per share increased from the restated figure of 7c4 in 2004 to 11c1.

Total assets as at 31 December 2005 increased marginally over the previous year to Lm116.2 million. Financial investments increased from Lm4.9 million to Lm14.1 million with cash balances of a further Lm12.4 million. Shareholders’ funds which increased by 10% to Lm87.2 million, translate into a net asset value per share of 86c1. At a current market price of Lm1.80, the equity is trading at a price to book multiple of 2.09 times.

The significant cash holdings of Lm12.4 million coupled with the drop in loans and borrowings to a total of Lm12.8 million (2004: Lm18.1 million), resulted in Maltacom’s net debt falling to a mere Lm0.4 million. The Group gearing ratio is thus of only 0.4%. Moreover, if one were to include the other financial assets held by the Group of Lm14.1 million, the Maltacom Group has a net cash balance of Lm13.8 million. This shows the enviable financial position of Malta’s leading telecommunications company.

Coupled with the net interim dividend of 2c per share distributed in November 2005, the final net dividend of 4c5 per share proposed by the Directors for approval at the Annual General Meeting to be held on 19 May 2006, results in a total dividend in respect of the 2005 financial year of 6c5 net. This represents a rise of 33% over last year and a payout ratio of 58.7%. The total gross dividend of 9c78 translates into a gross yield of 5.4% at today’s price of Lm1.80 per share.

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