Interim ResultsSeptember 22, 2008
INTERIM RESULTS FOR THE 6 MONTHS ENDED 30
Globo plc ("Globo", the "Group" or the "Company";
LSE-AIM: GBO), a leader in the Information and Communications Technology market
in Greece, is pleased to announce its interim unaudited
results for the 6 months ended 30 June 2008.
These are the first interim results to be
announced since Globo’s Admission to AIM in December 2007.
first 6 months is
the slower half of the year.
Revenues increased by 76% to
€7.21m (H1, 2007: €4.09m).
Profit before tax increased
by 115% to €0.86m (H1, 2007:
line with the Company’s expectations.
Solid progress achieved in all segments of the
business including both public and private sectors,
with the first meaningful contribution to revenue from Software as a Service.
Progress in international expansion achieved in Romania, Cyprus and Bulgaria.
Strong order intake achieved across the business with
forward order book standing at €9.3m at 30 June 2008 (31 December 2007: €3.6m).
"The second half of 2008, traditionally the
stronger trading period, has started with the benefit of a significant order
book and good visibility of revenues through to the year end. We
are confident of achieving good results for 2008 as a whole."
Costis Papadimitrakopoulos, Managing Director
Dimitris Gryparis, Finance Director
Simon Bloomfield or Steve
St Helen’s Capital Plc (Joint Broker)
NCB Stockbrokers Limited (Nomad & Joint Broker)
Christopher Caldwell or Jonathan Gray
GLOBO plc was admitted to AIM in December
2007. Founded in 1997 by Konstantinos Papadimitrakopoulos and headquartered in
Halandri (a suburb of Athens),
Globo has established itself as one of the market leaders in the Greek ICT
market. It provides
e-business and telecom software products and related services to the private and
governmental sectors in Greece as
well as developing and operating broadband wired and wireless networks. It has
developed to become one of the largest e-business
software and S.a.a.S. vendors
For further information please go to www.globoplc.com.
& CHIEF EXECUTIVE OFFICER’S STATEMENT
We are pleased to present
Globo’s interim financial results for the six months to 30 June 2008. These
results show that the momentum
gained within the business in 2007 has been sustained in the first half of 2008
with strong growth in revenue,
profits and order book.
As Globo’s Admission to AIM was effected by way
of a reverse takeover of Israeli Acquisitor I plc, the results for the six
months ended 30 June 2008 are consolidated whereas the comparative numbers for
the six months ended 30 June 2007 are for Globo Technologies S.A. and Profitel
S.A, the principal operating businesses of the Group.
Results and Finance
Revenue for the six months to 30 June 2008
increased by 76% to €7.21 million (H1, 2007: €4.09 million) with strong growth
being achieved in all segments of the business. Operating profit grew by 72% to
€1.36 million (H1, 2007: €0.79 million) and an increase in the pre-tax margin to
11.9% (H1, 2007: 9.8%) resulted in profits before tax increasing by 115% to
€0.86 million (H1, 2007: €0.40 million).
Reflecting the significant growth of the
business, an increase in working capital resulted in net debt (excluding
long-term finance leases) of €8.44 million as at 30 June 2008 (30 June 2007:
€6.08 million; 31 December 2007: €4.55 million).
During the period under review, traditionally the
slower half of the year, each segment of Globo’s business has made solid
Total revenues from software products and
services (government, public and corporate sectors) increased 92% to €6.42 million
(H1, 2007: €3.31 million).
Within the government and public sector, order
intake was strong with a number of substantial digitalisation contracts being
secured for delivery during the course of the current year. These included
projects for the Greek Ministry of Mercantile Marine, the Greek Ministry of
National Education and Religious Affairs and the Parliament of Greece.
Corporate sector revenues are based on Globo’s
suite of CITRON branded e-business applications and broadband access
technologies including Internet Hotel and WiPLUS from customers such as
Lambrakis Press Organization S.A., Publicis Hellas S.A., E – Shop.gr S.A.,
Euroxx Securities, Newsphone S.A, Angelicoussis Shipping Group, Istron Bay Hotel
and Philippion Hotel. New customers such as
Pfizer Hellas and Wilo Hellas have been added to the
Group’s clientele since the period end and
will contribute to revenue in the
second half of the year.
These results include the first meaningful
contribution to revenue from Profitel, Globo’s S.a.a.S. (Software as a Service)
division at €0.16 million (H1,
2007: €nil). Although still modest, this represents a 43% increase
on the S.a.a.S. revenues achieved in the second half of 2007.
During the first half of
2008, progress has been made in developing the Company’s international
presence. An operating subsidiary has been established
in Romania. Planning for
additional operating subsidiaries in Cyprus and Bulgaria is also under
way. Globo has been operating in Cyprus since
2007 through a reseller network and expects to achieve a stronger market
presence by forming a wholly owned
New product development continues to be given a
high priority. Total investment
in product and service development during the period was
€2.19 million (H1, 2007: €1.71 million) which was capitalised in accordance with
International Financial Reporting Standards ("IFRS"). Globo continues
to invest in the development of its existing
software platforms such as the
Citron Business Operating System and the WiPLUS Broadband
Access platform in order to enhance more functionality and to
better serve our customer needs. In the meantime
significant effort has been made to transform these
systems to support the S.a.a.S business model which the Company is aggressively developing.
This, together with establishing our technological footprint on the mobilisation
of our e-Business products in order to encourage the ‘ubiquitous
computing‘ needs of modern
enterprises, sets a solid
cornerstone of future commercial development based on the current global market
trends and customer needs.
The significant growth of the business has led
to an increase in the number of
employees to 103 persons (H1, 2007: 55) and the
appointment of some experienced new
management and business development personnel including:
Mr Sotirios Issaias:
appointed as Profitel’s Sales Manager in February 2008, Sotirios
graduated from the Lycee Leonin and
also holds degrees from
the University of Indianapolis (USA)
and Concordia University (Canada),
and a graduate diploma from McGill University (Canada). He
has been working in the telecommunications field in corporate sales in the Greek
market where he has gained extensive expertise with Eurolink
SA and Net One SA.
Mr Nikos Giannakakos:
appointed as Value Added Services & Mobile Business
Development Manager in July 2008. Nikos graduated
in Computer Systems Engineering from Sussex University and
holds Masters degrees from Brunel University and
the National University of Finance and Economics in Greece.
He has worked in the telecommunications industry since 1996,
beginning his career at Epsilon Software S.A., OTE and Vodafone Greece where
he led the team responsible for the commercialisation
and business strategy of all mobile Value Added Services.
Mr Stathis Vovos:
appointed as SaaS & Value Added Services Business
Development Manager in September 2008.
Stathis has a degree in Electrical Engineering from the National Technical
University of Athens and an MBA from the City Business School in London. Stathis
has held positions at Research International, OTE Hellas
Online and Lannet
Appointment of joint broker
In June 2008, we were
pleased to announce the appointment of St Helen’s Capital Plc as the Company’s
joint broker, alongside NCB Stockbrokers Limited who
continued to act as the company’s Nominated Adviser and
Globo’s stated strategy to date has been to
expand its operations within the public
and corporate markets in Greece and also internationally.
Solid progress with these objectives has been achieved during the period. During
recent months, it has become clear to the Board that Globo’s investment in its
proprietary technologies will offer opportunities for expanding both the scope
and range of the business in the future. Our future strategy will be to fully
exploit these potential opportunities.
The strong order intake during the first half
means that Globo started the second half with a forward order book of €9.3
million (31 December 2007: €3.6 million), the bulk of which is expected to be
delivered during the current year. The order book
currently stands at €8.5 million.
The second half of 2008,
traditionally the stronger trading period, has started with the benefit of this significant
order book and good visibility of revenues through to the year end. We are
confident of achieving good results for 2008 as a whole.
Brett Miller Costis
In the first half of 2008 the Group has
produced an excellent financial performance, driven in particular by continued
strong growth in software services but also reflecting strong contributions from
all main business areas.
In the six months ended
30 June 2008 revenue reached €7.21 million,
a 76% increase on the same
period in 2007 (€4.09
million). The increase in revenue came from
organic growth in both private and public sector
segments of the Group.
Gross profit increased by 87% to
€3.08 million (H1
million) delivering a margin of 43% (40% in
Operating profit excluding depreciation
and amortization increased 56% to
€1.92 million) delivering
a margin of 41% (H1
2007: 46%). Depreciation
and amortization of the non-current assets reached €1.62
million (H1 2007: €1.13
million) reflecting the significant product development. Operating profit
increased by 71.3% to €1.36
million (H1 2007: €0.79
million) which despite the increase of 43% in
the depreciation and amortization charge, delivered an
operating margin of 18.9%,
slightly below the same period of 2007 (H1 2007: 19.4%).
Profit before tax reached €0.86
million, an increase of 115% over
the same period of 2007 (€0.40
The taxation charge for the
period was €0.28 million (H1
Consistent with previous accounting periods,
the profits of the Group are expected
to be higher in the second half of the year than the first half, due to the
increased volume of sales of the Group’s own products
and services to large private
sector customers rather than
to public sector customers, producing higher profit margins for the Group.
Basic earnings per share grew by 33% to €0.004 (H1
Globo plc’s balance sheet, as at 30 June 2008,
reflects a net asset position of €12.16
million. Total assets were €30.88 million (H1 2007: €19.97
million). Of total assets, €11.4 million were held in non–current
assets, €16.98 million were held
in inventories, trade debtors,
prepayments and other current assets and €2.50 million were held in cash and
cash equivalents. Total liabilities increased by 36.1% to
Accounts receivables and prepayments increased by
€4.93 million primarily because of the higher volume of
trading and the lengthy duration
of large public projects that the Group gained in the last 12 months. However,
the Group expects that the
majority of the outstanding amounts will be fully recovered
Cash used in operations
was €0.12 million due
to the increase in receivables,
while net cash used in investing activities was €2.97 million reflecting the
significant investment in product development and infrastructure.
For the 6 months ended 30 June 2008
Revenue (Note 3)
Cost of sales
Other operating income
Other operating expenses
Finance costs (net)
Profit before Tax
Profit for the period/year from continuing
Basic earnings per share
(€ per share) (Note 5 )
Diluted earnings per share
(€ per share) (Note 5)
At 30 June 2008
Property, plant and equipment
Deferred tax assets
Total Non-Current Assets
Other current assets
Cash and cash equivalents
Total Current Assets
EQUITY AND LIABILITIES
Reverse acquisition reserve
Total Equity – Capital and Reserves
Retirement benefit obligations
Finance lease liabilities
Total Non – Current Liabilities
Trade and other payables
Total Current Liabilities
TOTAL EQUITY AND LIABILITIES
CASH FLOW STATEMENT
For the 6 months ended 30
Cash Flows from Operating Activities
Cash (used in)/generated
Income tax paid
Net Cash from Operating Activities
Cash Flow from Investing Activities
Acquisition of subsidiaries
Purchases of tangible and intangible assets
Sales of tangible and intangible assets
Net Cash from Investing Activities
Cash Flows from Financing Activities
Proceeds from issue of share capital
Increase in long term loans
Increase in current loans
Repayments of obligations under finance leases
Net Cash from Financing Activities
Net Increase/(Decrease) in Cash and Cash
Movement in Cash and Cash Equivalents
Cash and cash equivalents at the beginning of
Net increase/(decrease) in cash and cash
Cash and Cash Equivalents at the End of the
OF CHANGES IN SHAREHOLDERS’ EQUITY
Balance as at 1 January 2007
Profit for the period
Total changes for the period
Balance as at 30 June 2007
Balance as at 1 July 2007
Increase in capital
Costs of issue
Share based payments
Profit for the period
Total changes for the period
Balance as at 31 December 2007
Profit for the period
Balance as at 30 June 2008
NOTES TO THE INTERIM
For the 6 months ended 30 June 2008
1 Basis of preparation
This condensed consolidated interim financial
information for the 6 months ended 30 June 2008 has been prepared in accordance
with IAS 34 ‘Interim financial reporting’. The condensed consolidated interim
financial information should be read in conjunction with the annual financial
statements for the year ended 31 December 2007, which have been prepared in
accordance with International Financial Reporting Standards as adopted by the
The financial information contained in this
report does not constitute statutory accounts as defined by section 240 of the
Companies Act 1985.
The 2008 interim financial report of the Company
has not been audited but has been reviewed by the Company’s auditor, Littlejohn
Chartered Accountants, whose independent review report is included in this
2 Accounting policies
The condensed consolidated interim
financial information has been
prepared under the historical cost convention. The same accounting policies,
presentation and methods of computation are followed in this condensed
consolidated financial information as
were applied in the preparation of the Group’s annual financial statements for
the year ended 31 December 2007. Comparative figures for the year ended 31
December 2007 and the 6 months ended 30 June 2007 have been extracted from the
statutory financial statements which carried an unqualified audit report, did
not contain a statement under section 237(2) or (3) of the Companies Act and
have been delivered to the Registrar of Companies.
This condensed consolidated financial information
has been approved for issuance by the Board of Directors
on 19 September 2008.
3 Segmental analysis
Revenue from software products & services
Revenue from telecom services
Revenue from sales of third party goods
Revenue is mainly derived from sales of Group’s
software products and services to private and public sector customers based upon
contractual agreements. Sales of third party goods which are treated as a
complement to the Group’s software products and services are recognized
according to the relevant contractual obligations.
As the Group has unused tax losses no current tax
charge has been provided. The charge in
the period arises from movements in deferred tax and provisions for future tax in
accordance with Greek Law.
Basic earnings per share are calculated by
dividing the profit after tax attributable to equity holders by the weighted
average number of ordinary shares in issue during the period.
Profit attributable to equity holders of the
Weighted average number of ordinary shares in
Diluted earnings per share assumes that options
and warrants outstanding at 30 June 2008 were
exercised at 1 July 2008, for
options and warrants where the exercise price was less than the average price of
the ordinary shares during the period. On this basis, the calculation of diluted
earnings per share is based on the profit attributable to ordinary shareholders
divided by 131,089,530
(six months ended 30 June 2007:110,500,000;
year ended 31 December 2007:11,357,897) ordinary shares.
Cash used in Operations
Profit for the period before tax
Depreciation of property, plant and equipment
Amortisation of intangible assets
Work in progress
Recognition of government grants
Adjustments for changes in working capital
Decrease in inventory
Increase in trade receivables
Increase in other current assets
Increase/(decrease) in liabilities (except bank
Cash (used in) /
plant and equipment
During the period the Group spent €719,000 on IT
equipment and fixtures & fittings for its additional office premises in Athens, Greece.
During the period the Group spent €2,272,000 on
licences and software development.
9 Related Party
Communications S.A. ("Profitel")
In the first
half of 2008,
Globo Technologies S.A. realized sales to Profitel S.A. for
the Wiplus service amounting to €99,657 (30 June
2007 – €71,674). Globo
Technologies received €3,000 from
Profitel for office rent. Additionally Globo
Technologies S.A. has bought telephony, internet bandwidth services, Wiplus
network services as well as related support communication services from Profitel
at a total value of €103,075 (30
June 2007 – €2,032). The
outstanding debtor balance at 30 June 2008 was
€564,530 (30 June 2007 –
€258,776). There is no
outstanding creditor balance at 30 June 2008 between
Globo Technologies S.A. and Profitel (30 June
2007 – €17,981).
b. 3nSold S.A.
Mr Costis Papadimitrakopoulos and his wife hold
27.5% of 3nSold S.A. ("3nSold").
In first half of 2008,
there were no transactions between the 3nSold and the Group (30
June 2007 – €Nil). The
outstanding debtor balance at 30 June 2008 was
June 2007 – €86,189).
In the first six months of 2008 Globo plc
provided consultancy services
to Globo Technologies S.A for a
total value of €20,000. The outstanding debtor balance at 30 June 2008 was €447,981.
10 Post Balance Sheet
No material events have occurred after the
balance sheet date.
Review Report to Globo Plc
We have been engaged by Globo
Plc to review the condensed set of Financial Statements
in the half-yearly financial report for the six months ended 30 June 2008 which
comprises the consolidated income statement, consolidated balance sheet,
consolidated statement of changes in equity, consolidated cash flow statement
and related condensed notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.
The half-yearly financial report is the
responsibility of, and has been approved by, the Directors. The Directors are
responsible for preparing the half-yearly financial report in accordance with
the AIM Rules for Companies.
The annual Financial Statements of the Group
are prepared in accordance with IFRS as adopted by the European Union. The
condensed set of Financial Statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility is to express to the Company
a conclusion on the condensed set of Financial Statements in the half-yearly
financial report based on our review. This report, including the conclusion, has
been prepared for and only for the Company for the purpose of the AIM Rules for
Companies and for no other purpose. We do not, in producing this report, accept
or assume responsibility for any other purpose to any other person to whom this
report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing.
Scope of review
We conducted our review in accordance with the
International Standard on Review Engagements 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board for use in the United Kingdom. A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK and Ireland)
and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our
attention that causes us to believe that the condensed set of Financial
Statements in the half-yearly financial report for the six months ended 30 June
2008 is not prepared, in all material respects, in accordance with International
Accounting Standard 34 as adopted by the European Union and the AIM Rules for
Chartered Accountants and Registered Auditors
19 September 2008