GO plc - Interim Directors’ Statement

On 14 May GO issued its interim directors’ statement announcing that the first quarter of 2009 was characterized by the continued extraordinary economic events which negatively impacted GO’s performance. GO explained that its results confirm that the company continued to grow its client base despite the increased competition. Revenues have however declined due to the reduced usage of GO’s services which led to a drop in profitability when compared to the strong performance registered in the comparable period last year.

GO explained that during this period it completed its programme to reorganise its activities across the entire Group which enables a better service to its clients and also offers a more efficient and cost-effective service. This programme is also facilitating control over cost structures. The Group explained that even though the use of its voluntary retirement scheme has been low during this period, applications have increased substantially during the past few weeks as the scheme draws to a close later this month. GO aims to reduce its headcount to around 1,000 in the short term. The Group stated that the reduction in revenues and the delay in rightsizing operations are the main contributors to the Group’s reduction in operating performance when compared to last year. GO however remains confident that the operating costs will be reduced in the second half of the year as a result of the expected departure of a significant number of employees through the voluntary retirement scheme.

GO announced that its investment in Forthnet continues to perform well and during the first quarter it registered growth in both revenues and EBITDA when compared to the previous year. Forthnet announced this morning that it continued its strong operating performance during the first quarter of 2009 and reached an EBITDA of €18.4 million which corresponds to a record EBITDA margin of 20.4%.  Forthnet has recently signed a new 3-year contract with the Greek Football League and furthermore also acquired the rights of UEFA Europe League for 2009-2012. Forthnet’s broadband subscriber base has continued to grow to 286,339 customers whilst the Pay TV subscribers decreased in the analog platform but increased in the digital platform which therefore resulted in an overall small decrease.

Moreover, GO re-iterated its positive outlook for the future and continues investing in the upgrade of its network which will remain one of the Group’s important investment plans for the following years to come. During the period under review, GO finalized the commissioning of its second submarine cable like to mainland Europe and continues upgrading its access network to ensure further improvements to its broadband client base.

In February 2009, the Group announced the acquisition of the broadband client base of Nextweb which strengthened GO’s position in the retail broadband market. Also, in April, GO acquired 60% of the share capital of BM IT Ltd, BM Support Services Limited and Bell Net Limited. GO explained that these three related entities enjoy a strong presence in the data centre and together with its own existing business, GO is currently the leading organization in this fast growing business.  GO concluded by stating that all these acquisitions provide scope for synergies and revenue growth.

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