I have bought a small holding (1.5% of JIC portfolio) of Globo (LON:GBO) this morning. Globo's business is all about helping companies to go mobile. It provides software, enabling businesses to optimise their operations for use on the mobile devices of its customers or employees.
It is a Greek company quoted on the AIM market of the London Stock Exchange. Earlier this month it divested of its Greek operations by selling 51% of its holding to management for €11.2m. The reason given for the divestment was that it would allow the Company to focus on building its international mobile business, which now accounts for the majority of Group profits.
Go!Enterprise Server was launched a year ago and has started to gain traction. On Monday this week it announced its second contract win with a tier-1 mobile network operator for GO!Enterprise targeting "the commercialisation of both GO!Enterprise Office (secure e-mail, files, messaging and personal information management) and GO!Enterprise Mobilizer (development of mobile apps that connect to enterprise systems)". Commercial launch is expected to take place in January 2013 with the service being provided on a recurring monthly subscription per device.
In the release, the Company took the opportunity to update on progress across the business. It said that GO!Enterprise had experienced strong demand "resulting in a total of more than 900 active customers with more than 140,000 Business to Employee and Business to Business active licenses through the GO!Enterprise Office and Mobilizer license scheme, and a total of more than 80,000 Business to Consumer active licenses through the GO!Enterprise Reach license scheme." Globo has been building a partner network which it says is behind its success in gaining new customers.
The Company expressed confidence that GO!Enterprise will evolve into one of the major drivers of its future growth and said that following the successful launch of GO!Enterprise Server in the US in October it expects to announce several direct customers and partner deals soon.
I have been watching Globo for some time and now feel that the timing is right to buy a small holding in the Company. I think 2013 could be the year that the Globo share price makes real progress as it builds momentum through sales of its Go!Enterprise software. To me, it looks just too cheap valued on consensus earnings forecasts of 8.9x the year just ending, 7.3x to December 2013 and just 4.9x to December 2014. There are of course risks with a company of this size at this stage in its development, hence the 1.5% holding. (See transaction history) www.globoplc.com
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