BMIT & GO announce asset purchase agreement

The MSE Equity Price Index eased by 0.35% to 3,855.693 points as the declines in HSBC and the ordinary shares of RS2 outweighed the gain of APS. Meanwhile, three other equities closed unchanged as trading activity totalled €0.55 million. Download today’s Equity Market Summary.

Today, GO plc and BMIT Technologies plc announced that following the conclusion of discussions for the potential assignment and transfer of certain lease rights and obligations currently enjoyed by GO as well as the passive infrastructure used for hosting telecommunications equipment, they entered into an Asset Purchase Agreement in relation to the proposed transaction. The Directors of GO explained that the proposed transaction will allow GO to focus on its core business operations and end-customers, resulting in operational advantages and the provision of better services for/to GO. The proceeds are expected to go towards the financing of GO’s future capital expenditure and investments as well as partial repayment of existing borrowings. Meanwhile, the Directors of BMIT explained that the proposed transaction will support the Company’s strategy and provides an attractive opportunity for the Company to diversify its business model and become a Maltese “InfraCo”, with the investment in this backed by long term, contracted revenues; and with cash flows generated from GO as its anchor client over a 30-year period. The companies have agreed that the final consideration due shall be determined, between the closing date and seven business days prior thereto, by way of a recalculation of the original consideration of circa €47.1 million less an amount corresponding to the GO Loan and any adjustments required in terms of the consideration adjustment provisions.

GO plc closed unchanged at the €2.94 level failing to hold onto an intraday high of €3.00 (+2%) as 37,000 shares changed hands. Today, GO published its interim results for the six-month period ending 30 June 2023. Revenues surged by 13.7% to a record (at the interim stage) of €120.5 million (H1 2022: €106.0 million), reflecting growth in the local telecom services as well as its subsidiaries BMIT Technologies plc and Cablenet Communication Systems plc. Operating profit surged by 23.7% to €18.6 million (H1 2022: €15.1 million). Excluding depreciation and amortisation, EBITDA increased by 10.2% to €45.3 million (H1 2022: €41.2 million), however the EBITDA margin eased to 37.6% compared to 38.8% in the first half of 2022. The Group’s net profit for the period attributable to shareholders amounted to €8.71 million (H1 2022: €6.44 million) which translates into an annualised return on average equity of 18.6% (H1 2022: 13.1%).

Also among large companies by market cap, Malta International Airport plc closed unchanged at €5.70 after recovering from an intraday low of €5.65 (-0.9%) across eight deals totalling 29,500 shares. Last week, MIA updated its targets for the 2023 financial year: passenger movements of 7.2 million (2019: 7.31 million), revenues of €113 million (2019: €100.2 million), EBITDA of €70 million (2019: €63.2 million), net profit of €37 million (2019: €33.9 million), and capital investments of €39 million (2019: €24.9 million).

Simonds Farsons Cisk plc held the €7.10 level on muted activity.

HSBC Bank Malta plc shed 3% to the €1.30 level across five trades totalling 70,975 shares.

The ordinary shares of RS2 Software plc fell by 2.3% to a one-month low of €1.27 on a single deal of 100,000 shares.

In contrast, APS Bank plc advanced by 2.4% to a four-month high of €0.63 across twelve deals totalling 85,189 shares. APS shareholders as of the close of trading on 23 August 2023 will be entitled to a net interim dividend of €0.0056 per share. Shareholders can elect to receive the dividend either in cash or through the issuance of new ordinary shares at an attribution price of €0.57 per share.

The RF MGS Index gained 0.3% to 869.29 points. Data from the German economy showed that June’s industrial production fell by 1.5% when compared to the previous month, a higher drop than anticipated. Meanwhile in the UK, house prices continued to plummet for the fourth consecutive month in July as the tight monetary policy is translating in higher borrowing costs.

This report contains public information only and is not to be construed as investment advice or an offer to buy or sell any securities. Information contained herein is based on data obtained from sources considered to be reliable, but no representations or guarantees are made with regard to the accuracy of the data. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Rizzo, Farrugia & Co. (Stockbrokers) Limited is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta and a member of the Malta Stock Exchange.