GO plc - Interim Results

On 9 August, GO plc published its interim financial statements covering the six months ended 30 June 2016.

Performance Overview

GO reported a sharp increase in revenues during the first half of the year to €76.7 million (H1 2015: €60.7 million), largely reflecting the consolidation of revenues generated from the now majority-controlled Cypriot telecoms subsidiary Cablenet Communication Systems Limited (“Cablenet”). Indeed, Cablenet alone contributed €14.4 million in added revenues to the GO Group. The remaining improvement in revenues (approximately €1.6 million) came from growth in GO’s traditional retail and wholesale business activities.

Coupled with the increased revenues, the cost base of the Group also increased during the first six months of 2016. In fact, cost of sales advanced by 34.6% to €46.4 million, but given the overall higher increase in revenues, gross profit still improved by 15.4% to €30.3 million (H1 2015: €26.2 million), leading to a gross profit margin of 39.5%, representing a decline of 3.7 percentage points from the comparable period last year.

Administrative and distribution expenses rose by 36.9% to €17.7 million (H1 2015: €12.9 million). Apart from the costs related to the newly acquired majority shareholding in Cablenet and Kinetix, GO’s cost structure was negatively impacted by the property lease charges from Malta properties Company plc which today no longer forms part of the GO Group following the spin-off exercise undertaken during the second half of 2015.

Despite the above, earnings before interest, tax, depreciation and amortisation (EBITDA) improved to €29.9 million in the period under review from €25.1 million during the first six months of 2015 (EBITDA margin: 39.0%). However, after taking into account depreciation and amortisation and net finance costs, the operating profit of the GO Group decreased by 15.4% to €11.0 million from €13.0 million in the first half of 2015. In this respect, it is important to highlight that the depreciation charges related to the new 4G mobile network and the amortisation charges of intangible assets created as a result of the new shareholding in both Cablenet and Kinetix weighed heavily on the increase in overall charges.

The six-month results of the GO Group were positively impacted by a €6.1 million gain arising from the acquisition of the majority stake in Cablenet which pushed up the pre-tax profit figure by 31.3% to €17.1 million (H1 2015: €13.0 million). Accordingly, after taking into consideration a tax charge of €2.9 million (H1 2015: €4.1 million) and minority interests of €1.0 million (pertaining to the shareholdings in Cablenet and Kinetix not owned by the Group), GO managed to increase its after-tax profits attributable to shareholders by 47.8% to €13.1 million from €8.9 million in the comparable period last year. Likewise, earnings per share improved to €0.130 from €0.088 in H1 2015.

The Company explained that the acquisitions of the majority shareholding in Cablenet and Kinetix bolstered the Group’s cash flows and financial position significantly. Indeed, cash generated from operations increased from €22.7 million in the first six months of 2015 to €32.4 million during the period under review. In particular, the consolidation of Cablenet increased the asset base of the Group to €265.7 million from €207.6 million as at 31 December 2015, including the related network infrastructure, rights over international subsea cable, client base and goodwill.

As at 30 June 2016, GO’s borrowings net of cash holdings amounted to €87.0 million (an increase in net debt of €39.9 million over December 2015) mainly as a result of debt related to Cablenet. Looking ahead, the Group’s net debt position is anticipated to improve by €16.0 million as GO expects Malta Properties Company plc to repay its loan in the coming months. Shareholders’ funds (excluding non-controlling interests) improved to €95.1 million (December 2015: €92.1 million) translating into a net asset value per share of €0.939.


For the ninth consecutive year, the Board of Directors resolved to determine the extent of a dividend distribution for 2016 on the basis of the full-year results. Thus, no interim dividend was declared.


Going forward, GO intends to continue to pursue a clear strategy focusing on growing its telecoms businesses both in Malta and beyond. In Malta, the Group is benefiting from its strategy focused on enhancing customer experience (also through innovation and capital investments) and driving efficiency across its various operations. Furthermore, Cablenet is a growing company and a challenger in the Cypriot telecommunications market, offering a robust network infrastructure, attractive commercial propositions and a focus on providing an unparalleled customer experience. All these are helping Cablenet growing its customer base, revenue and profitability.


GO plc – Interim Financial Statements for the six months ended 30 June 2016.

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