GO plc published its full-year results to 31 December 2008 following a Board of Directors’ meeting held on 20 March 2009. The Directors approved a final net dividend of €0.12 per share to those shareholders on the Company’s register as at close of trading on Tuesday 14th April 2009. The dividend is expected to be paid on Wednesday 20 May 2009.
GO’s turnover during the year to 31 December 2008 decreased by 1.2% to €130.3 million mainly due to the group’s decision to discontinue its international call centre business as a result of lack of profitability in this unit. However, during a stockbrokers’ meeting held on 20 March 2009, GO’s Chairman Mr Portelli explained that revenue from the Group’s core activities (broadband, TV, fixed line and mobile) increased by 1.6% as the continued strong growth in TV and broadband during the year mitigated the decline in fixed line services. Mr Portelli also stated that GO’s performance this year was very positive when taking into consideration the increased local competition within the TV and mobile industries and new regulations. In fact revenue from mobile services grew by 7.6% despite the effect of reduced roaming charges together with the launch of two new local Mobile Virtual Network Operators (Bay Mobile and Redtouch Mobile). Likewise, the Group’s TV service grew considerably with GO subscribers (mostly having silver and gold packages) reaching the 35,000 mark. In the broadband sector the Group experienced a growth of 6,000 subscribers which was further augmented by the acquisition of Nextweb’s broadband client base.
Cost of sales decreased by 5.1% to €76.1 million mainly due to a decline in the depreciation charge to €23.2 million (2007: €26.7 million). Gross profit amounted to €54.2 million which resulted in a gross profit margin of 41.6%. Administrative and distribution expenses decreased by 3.1% to €28 million mainly due to a decline in the Company’s number of employees together with tighter control over costs.
The Group registered an operating profit before exceptional items of €26.6 million, 14% higher than last year. Group EBITDA before the extraordinary items remained at the €50 million level proving that operationally the Group remained strong. However these full year results reflect various one-off items. GO had to recognize a charge of €12.9 million following the Court Judgement on 7 July 2008 with respect to the pension scheme to ex-Cable and Wireless employees. On the other hand, costs relating to the Group’s early voluntary retirement scheme amounted to a further €2 million (2007: €4.3 million). During the same meeting, CEO Mr. Kay stated that the Company launched its last Voluntary Retirement Scheme to right size its fixed line operations and this scheme will be terminated at the end of May 2009. Meanwhile, during the year ended 31 December 2007, the Group benefitted from one-time VAT refundable claim amounting to €9.6 million. These items led to a 54% decline in operating profit to €12.4 million from €27 million in 2007. However, if these extraordinary transactions are excluded, the operating profit would have improved by a significant 14.6% – a marked improvement over last year’s full year results.
Furthermore, during the year under review, GO also recognized a loss of €15.6 million from its 50% shareholding in Forgendo Ltd, the company which together with Emirates International Telecommunications Malta Ltd owns the 34.6% shareholding in Forthnet. GO’s Chairman Mr. Portelli explained that this loss is in line with the expectations of Forgendo Ltd which is expected to deliver significant benefit over the medium term. During the year, Forthnet acquired Netmed, the sole Pay-TV company in Greece and Cyprus. On 18 March 2009, Forthnet issued its results for the fourth quarter of 2008. This telecoms company reported a substantially improved EBITDA figure following a significant increase in telecoms clients. Meanwhile, the newly acquired Netmed also posted strong financial results with an adjusted EBITDA of €13.3 million. The EBITDA of the new Forthnet Group totaled €15.4 million during 2008 with the consolidation of Netmed only reflected from September 2008.
GO incurred a loss before tax during the year ending December 2008 of €1.3 million when compared to a profit before tax of €28 million in the comparative period last year. After providing for a tax charge of €1.8 million, GO’s loss after tax during the year under review amounted to €3.1 million.
Total assets as at 31 December 2008 of €310 million includes a cash balance of €8.3 million which is substantially lower that last year following the significant investment in Forthnet. Shareholders’ funds amounted to €191.3 million (2007: €201.4 million) resulting in a net asset value per share of €1.88.