GO plc published its Preliminary Statement of the 2007 full-year results following a Board of Directors’ meeting held on 27 February 2008.
The key highlights are:
• Turnover rises 2.1% to €131.9 million;
• Gross profit declines by 13% to €51.8 million;
• Pre-tax profit of €27.6 million;
• Cash and cash equivalents rise to €81.5 million;
• Gross dividend yield of 7.5% per annum.
The Directors proposed a final gross dividend of €0.1792 per share resulting in a net dividend of €0.1165 (Lm0.05) per share, unchanged from last year. The dividend is payable to shareholders as at close of trading on Tuesday 11 March 2008. Additionally a gross interim dividend of €0.0538 (Lm0.0231) per share was paid in November 2007. Therefore, the total gross dividend for 2007 remains unchanged at €0.2329 (€0.1514 net of tax).
Group turnover during 2007 increased by 2.1% to €131.9 million with the Directors reporting that the decline in fixed line revenue was offset by the strong growth in broadband, mobile and digital TV services. In February 2007 GO acquired the DTTV operator Multiplus Limited and CEO Mr David Kay revealed that the company’s customer base more than doubled within a year. Mr Kay stated that there are currently around 25,000 GO Plus TV subscribers. Cost of sales climbed 13% to €80.1 million mainly as a result of a rise in depreciation charges as well as interconnection charges. The Directors confirmed that the Group reviewed the estimated useful life of various technology platforms and in certain instances it was decided to accelerate the depreciation charge on some of the assets. Administrative and distribution expenses increased by 9.8% to €28.8 million. These include various one-time fees related to the Group re-branding exercise.
The 2007 results reflect a number of extraordinary items. GO recognised the amount of €9.6 million related to the VAT claim refund following the decision by the Court of Appeal on 17 December 2007 in which the appeal filed by the VAT Department was rejected. On the other hand, costs related to the voluntary early retirement scheme amounted to a further €4.3 million (2006: €7.3 million). Moreover, a goodwill impairment of €0.35 million was realised as well as a further impairment on an equity investment of €1.7 million.
Profit before tax during 2007 amounted to €27.6 million, representing a decline of 1.4% over the previous year. After providing for a tax charge of €10.9 million, GO’s profit after tax during the period under review of €16.7 million results in an earnings per share of €0.165.
Total assets as at 31 December 2007 of €269.3 million include financial investments of €34.4 million (2006: €31.9 million) and cash balances amounting to €47.1 million (2006: €38.9 million), resulting in total cash and cash equivalents of €81.5 million. Shareholders’ funds as at 31 December 2007 totalled €196.1 million resulting in a net asset value per share of €1.94.
In February 2008, GO plc together with its majority shareholder Emirates International Telecommunications (Malta) Limited (EITML) purchased a 21% stake in ForthNet for €93.8 million. ForthNet is a leading Greek internet service provider and an alternative fixed line and broadband operator.
Commenting on the 2007 results, GO Chairman Mr Sonny Portelli said: “In 2007, GO experienced strong growth in broadband, mobile and digital television services, which are making up for the decline in revenues from traditional fixed line services. Moreover, the continued trend of significant cash generation and strong balance sheet was maintained”. Mr Portelli said that new opportunities, such as Smart City, will mean that GO will be entering new areas of business as well as consolidating and growing existing ones: “With the launch of our second submarine cable linked to Interoute, we have positioned ourselves as the local telecoms provider which has the best international connectivity solutions. Moreover, with the announcement in February of this year of the acquisition of 22% in one of Greece’s major broadband providers (ForthNet), GO and its major shareholder Emirates International Telecommunications have entered into a new market and hence guaranteed new revenue streams and more opportunities for future growth”.