GO plc - Interim Results

Maltacom’s half-yearly report to 30 June 2006 was published following a Board of Directors’ meeting held on 15 September. On the same day, the Directors declared a net interim dividend of 1c5 per share, which is 25% lower than last year’s interim dividend. This dividend is payable on 27 October to all those shareholders who appeared on the Company’s register as at close of trading on 18 September (for settlement on 22 September). The equity started trading ex-dividend on 19 September.

The Group’s turnover during the first six months of the year to 30 June 2006 was marginally unchanged at Lm26.6 million. The segmental analysis annexed to the half-yearly report reveals that there were significant drops registered in the turnover from the ‘retail business’ (Lm1.4 million lower), the ‘core network’ (Lm0.36 million lower) and the ‘local access network’ (Lm0.21 million lower).These reductions were however almost offset by increased revenue from ‘non-regulated and other activities’ (Lm1.1 million higher) and the ‘other business’ category’ which saw a Lm0.75 million rise to Lm9.5 million. Cost of sales incurred during the period under review amounted to Lm14.1 million, 8.3% higher than the previous comparative period. As a result of this, the Group’s gross profit for the six months to 30 June 2006 decreased by 8.8% to Lm12.5 million, showing a gross profit margin of 47.1% (2005: 51.4%).

Administrative and distribution expenses amounted to Lm5.8 million, 3.5% lower than the first half of 2005. After accounting for other income and charges, the Group recorded an operating profit before net financial income of Lm6.1 million, 18% below the operating profit of Lm7.5 million in 2005. Net financial income increased to Lm0.17 million as investment and similar income rose faster than the rise in interest payable due to a further drop in loans and borrowings. The Group’s share from its associate company, namely the 30% equity stake in Datatrak Holdings, showed a Lm30,000 loss in the first half of the year compared to a minor Lm21,000 profit in the comparative period.

The Group’s profit before tax during the period under review amounted to Lm6.3 million, 18.1% below the pre-tax profit of Lm7.7 million in the first six months of 2005. After accounting for taxation of Lm2.1 million, the Group’s profit for the half-year to 30 June 2006 amounted to Lm4.2 million. The Group’s earnings per share similarly decreased by 17% to 4c1.

The Group’s balance sheet as at 30 June 2006 shows total assets of Lm114.7 million. The increase in assets during the first six months of the year reflect a Lm3.1 million rise in cash balances, which totalled to Lm15.5 million at the end of June. Debtor balances dropped to Lm14.9 million from Lm15.4 million in December 2005. The Group’s holding of financial assets decreased from Lm14.1 million in December 2005 to Lm13.7 million in June. On the liabilities side, the Group’s total loans and borrowings as at 30 June 2006 amounted to Lm11.4 million compared to Lm12.8 million six months earlier. The Group’s cash balance exceeds the total borrowings by more than Lm4 million, implying that the Group is debt free and has no gearing.

Shareholders’ funds of Lm86.9 million as at 30 June 2006 translate into a book value per share of Lm0.86. The group’s annualised return on equity (profit after tax divided by average shareholders’ funds) of 10.3% is below the ROE of 13.5% in June 2005. Similarly the annualised return on assets (profit before tax divided by average assets) dropped from 12.8% in 2005 to 10.5%.

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