Pre-close trading updateJanuary 14, 2011
FOR IMMEDIATE RELEASE
14 January 2011
2010 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 2010 with excellent growth in international revenues reflecting its successful expansion into the mobile applications market and leveraging its investment in this arena.
As expected, 2010 has been a transformational year for Globo which has continued to achieve its strategic, financial and operational goals and to build a solid platform for substantial future growth. Indicative, unaudited revenues for the year, the result of strong demand for the Group’s products and services, were ahead of market expectations and grew by approximately 31 per cent to €30.9 million (2009: €23.5 million) with pre-tax profit expected to be in line with market expectations.
During the year, Globo invested a total of €8.7 million (2009: €9.3 million) in expanding its international footprint and the continued development of its proprietary technologies and product offering.
The benefits of the investment made over the last 2 years have started to gain real momentum with international revenues rising dramatically to €6.18 million (2009: €0.1 million) and representing 20 per cent of total revenues for 2010. Initial revenues from mobile applications (including CitronGO!, value added services and platforms) accounted for nearly all international revenues for 2010 and will be a significant driver of future development and financial performance for the Group.
S.a.a.S (Mobile, e-Business and WiFi) revenues rose by 138 per cent to €6.96 million (2009: €2.92 million) representing 22.5 per cent of total revenues.
Operating cash flow for the year remained healthy at approximately €4.5 million and the Group raised £3.62 million (net of expenses), through 2 placings with new and existing shareholders, to fund growth. After investment, increased working capital requirements as the result of expansion, and against a background of a tough financing environment in Europe, total borrowings at the end of the year were marginally up at approximately €13.5 million (31 December 2009: €13.0 million) with net debt of €10.7 million (30 June 2010: €11.4 million; 31 December 2009: €9.9 million).
Receivables from the Greek government have been significantly reduced to €1.98 million (2009: €5.5 million) after collecting a total of €3.52 million during 2010. The Group expects to receive the balance during the current year.
2010 Operational highlights
The Group achieved strong growth in all lines of business during 2010.
· In the mobile sector, after the commercial launch of CitronGO! and GO!Social the Group has rolled out business development activities in Latin America, North America, South East Europe, Middle East, India, China and South East Asia.
These actions have resulted in Globo securing new contracts from 13 Mobile Network Operators (“MNOs”) with a combined 205 million subscriber base in 20 countries. In addition, Globo is in negotiations with numerous other MNOs, handset manufacturers and mobile value added service providers throughout the world.
The Group provides value added services and platforms to a number of MNOs through its subsidiary, Reach Further Communications Ltd, and plans to expand this activity by offering its products and services to customers contracted for the CitronGO! service.
· Globo has continued to invest in expanding its international footprint and sales and marketing team. It now has a physical presence in USA, Singapore, Dubai, Indonesia and Cyprus as well as operations in more than 20 countries.
· In the Software business, during 2010 the Group won and delivered several projects for private sector clients in Greece with public sector sales being minimal. This has resulted in improved cash flow for the Group.
· The Group has successfully continued to build upon its S.a.a.S business model which now supports e-business software, mobile value added services, WiFi connectivity and telecom services, and represents 22.5 per cent of total revenues. There is a focus on increasing the S.a.a.S contribution by steadily converting existing business to software service operations and, as a result, an expectation to improve margins, cash flow and sustainable recurring revenues.
Outlook for 2011
Having successfully established its position in the international mobile market, continued to validate its technology and business model and, crucially, delivered real value to customers, Globo is continuing to experience strong demand for its products and services.
As a result, the Board is confident that the Group is on track to achieve market expectations for the current year, despite the continuing economic difficulties of several countries within the Euro-Zone.
The Board anticipates that the following will be the key drivers of financial performance for 2011:
· Winning new contracts from international MNOs, handset manufacturers and value added service providers for Globo’s mobile service offerings.
· Launching CitronGO! Enterprise Server, a mobile communication server for medium and large organisations wanting to provide their employees with ubiquitous connectivity to enterprise messaging, collaboration and intranet, through a single point of mobile access across the business and legacy applications.
· Strengthening Globo’s international presence by expanding operations in existing offices in Dubai (U.A.E), Singapore and Atlanta (USA), as well as setting up offices in Latin America and India.
· Expanding the in-house software development team by setting up a software development facility in India, employing local people who will be managed by Globo’s own technology department. This will increase the Group’s software development capacity to support the continuous development of innovative products whilst maintaining tight control over costs.
· Establishing a presence in the UK from which to expand operations in Western Europe as well as taking advantage of the business development opportunities with MNOs, handset manufacturers and other targets based in the UK.
· In Greece, it is anticipated that the €20.4 billion 4th EU support framework (2007 – 2013) will stimulate further demand for Globo’s products and services from both the public and private sectors.
· The diversified business model (license, project, service) of Globo’s traditional business will result in continued steady growth as businesses and other organisations move into e-business.
· As part of the Group’s international growth plans, there is an intention to expand the successful WiPLUS (WiFi Service) by offering an open connectivity layer to selected business partners wanting to exploit their local market through the Group’s proven broadband access technology.
Globo’s non-executive Chairman, Brett Miller, commented:
“The robust performance by Globo during 2010, in a challenging economic and business environment, is the result of a substantial investment made after the Group recognised a major opportunity in international mobile markets. Our people, at all levels, should be congratulated for this outstanding achievement and the platform they have established for strong future growth.”
Globo’s Chief Executive Office, Costis Papadimitrakopoulos, added:
“Since our IPO on AIM 3 years ago, Globo has grown into a significant, international provider of technologies by steadily delivering revenues and profits either in line with, or exceeding, market expectations. Today we are even more enthusiastic and confident about the growth opportunities within international mobile markets where we are already achieving very strong results”.
Globo intends to publish full results for the year ended 31 December 2010 during April 2011.
Costis Papadimitrakopoulos, CEO
Dimitris Gryparis, Finance Director
Daniel Stewart & Company Plc (Nomad & Broker)
Emma Earl (Corporate Finance)
Noelle Greenaway (Corporate Finance)
Christopher Theis (Corporate Broking)
GLOBO plc was admitted to AIM in December 2007. Founded in 1997, Globo has established itself as one of the international market leaders in the Mobile and ICT market, offering a wide range of products and services to the mobile, corporate, public and consumer market. It provides mobile, e-business and telecom software products and related services to the private and governmental and mobile sectors. The Group has an International presence with offices and subsidiaries in 8 countries and continues to expand internationally based on its mobile communications strategy. For further information please go to www.globoplc.com