Period end trading updateFebruary 8, 2010
FOR IMMEDIATE RELEASE
8 February 2010
2009 PERIOD END TRADING UPDATE
Globo plc (“Globo” or “the Group”;LSE-AIM: GBO), the international IT, S.a.a.S and mobile solutions group, announces that it has achieved a strong trading performance for the year ended 31 December 2009. In the face of global recession, the Group has successfully maintained and strengthened its leading position in its traditional market as well as expanding into emerging markets where it is starting to win new contracts with the potential to transform the Group.
Revenues for the year exceeded market expectations, growing by approximately 31 per cent to €23.4 million and reflecting strong demand for the Group’s products and services, with pre-tax profits in line with market expectations. Operating cash flows for the year increased by 295 per cent to €8.1 million with net borrowings at the end of the year remaining in line with the end of 2008. The level of net debt was higher than market expectations due to slow settlement, by the Greek government, of invoices with a total value of €5.5 million which the Group expects to receive substantially all of this during the first half of the current year.
2009 Operational highlights
The Group achieved strong growth in all lines of business during 2009.
· In the mobile sector, the commercial launch of CitronGO! at the GSMA Mobile World Congress in February 2009 resulted in a high level of interest from mobile operators worldwide. Since then, the Group has rolled out business development activities in Latin America, North America, South East Europe, Middle East, India, China and South East Asia. The results of these activities have been encouraging, so far resulting in the recently announced contract with an operator in South East Asia with more than 85 million subscribers as well as an MOU with a Latin America operator.
· In the public sector, new contracts won and delivered with several public organisations (mainly for E-Business and Wi-Fi projects), with funding from the 3rd European Support Framework, provided the basis for solid further expansion in Greece. The 4th European Support Framework becomes effective in 2010 and will enable the Group to achieve further growth in this area.
· In the private sector new contracts with key customers reflect strong relationships with the group and provide visibility for future revenue growth. The Group also expects the 4th European Support Framework to support private business spending over the next 7 years.
· The Group has expanded its participation in private and public sector project bids outside Greece with bids for new digitalisation and e-business projects in Cyprus.
· Profitel Communications achieved solid profitable growth through its Software as a Service (S.a.a.S) offering and telecom solutions.
· The Group increased coverage of its Wiplus service (Wi-Fi operations), adding new premium hotspot locations which now total 438 (2008: 350) and continue to contribute a profitable and recurring revenue stream.
· The integration of Reach Further Communications Ltd, with the Group’s service offerings to several mobile operators, has resulted in business opportunities that will be exploited during 2010 onwards.
International expansion of the Group
The launch of CitronGO!, represents a major step in the transformation of the Group as a player in global mobile services, a market with more than 4.5 billion current subscribers.
During 2009, the Group supported this strategic development in several key areas:
· Recruiting professionals with international experience in the mobile sector, including professionals working with regional teams to initiate relationships with mobile network operators (‘MNO’s) in Latin America, North America, South East Europe, Middle East, India, China and South East Asia.
· Since the roll-out of CitronGO! commenced 7 months ago, the Group has entered into negotiations with various Mobile Network Operators around the world. The recently announced contract with an MNO in South East Asia will contribute to revenues during the first quarter of 2010. The MOU signed with a Latin American MNO, announced in September 2009, is also a step towards our International expansion.
· Continuous development of CitronGO! to:
o integrate more services (e.g. Facebook, Youtube, Twitter)
o support the growth in number of handsets
o support several languages (including English, Indonesian, Spanish, German, Italian, French, Bulgarian, Arabic, Greek)
o provide several billing interfaces for MNO systems
o integrate with internal MNO systems (e.g. SMS, WAP gateways)
o provide tools for customer helpdesks and systems monitoring
In August 2009, the Group raised approximately £1 million before expenses via a placing, with UK and Greek investors, of 11,944,029 new ordinary shares of 1 pence each, to fund the international roll-out of CitronGO!
The Group expects that this international roll-out of CitronGO! will significantly benefit revenue, profit and cash flow during 2010.
Outlook for 2010
Despite the economic difficulties being experienced in Greece, along with many other parts of the world, the Group believes that 2010 will be a year of transformation for the business from a regional technology leader to an international mobile services provider.
During 2010, we expect a number of drivers of growth.
· We expect to announce new deals with international MNOs for our mobile service offering which we plan to enhance with a new social networking product to be launched at the 2010 Barcelona GSMA Mobile World Congress.
· We plan to strengthen our international presence by establishing trade offices, as required, in several regions, starting with our new Singapore office to be opened in February 2010.
· In Greece, we anticipate that the €20.4 billion 4th support framework (2007 – 2013) will stimulate further demand for Globo’s products and services from both the public and private sectors.
· Our diversified business model (licence, project, service) in our traditional business will result in continued steady growth as businesses and other organisations move into e-business.
· Growing customer familiarity with our Software as a Service business model is resulting in utilisation of new services, increased customer loyalty and recurring revenue.
· Wi-Fi broadband infrastructures will continue to be a significant driver as demand from private and public organisations grows.
Globo’s non-executive Chairman, Brett Miller, commented:
“Despite a number of significant challenges, Globo made significant strategic and trading progress during 2009. Besides winning new contracts and delivering strong results within a difficult economic environment, Globo has made significant steps in its international development. We have started 2010 with a very good announcement for our international mobile service and with a satisfactory outlook for our traditional IT, S.a.a.S and Telecom business driven by the economic reformation of the Greek Government. We anticipate that this year will start to show the huge potential for the Group’s mobile applications.”
Globo’s Chief Executive Office, Costis Papadimitrakopoulos, added:
“We are excited about 2010. We believe that this year will be a landmark in our Group’s development by transforming it to an international technology provider and we are well positioned to accelerate our growth.”
Costis Papadimitrakopoulos, CEO
Dimitris Gryparis, Finance Director
NCB Stockbrokers Limited (Nomad)
Christopher Caldwell or Barclay Clibborn
Astaire Securities Plc (Joint Broker)
Daniel Stewart & Company Plc (Joint Broker)
Steve Liebmann, Simon Bloomfield or Andy Harris
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 SaaS. vendors in Greece. More recently, the Group has formed a new business unit, Globo Mobile, to deliver its mobile communications strategy. For further information please go to www.globoplc.com.