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Globo: Positive 2012 trading statement. 2013 to be a defining year.

Friday, Jan 25 2013 by
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Globo (LON:GBO) (27.75p and 1.9% of JIC portfolio) has issued a positive trading update for the year ended 31st December 2012 in which it says it pleased to report that it has achieved a financial performance ahead of market expectations. Revenue was up 285 to €58m. However, if one strips out the Greek business which was divested in early December and compare the like for like numbers for the continuing business was up 66% at €46m.

The Company says EBITDA (earnings before interest, tax, depreciation and amortisation or the bad bits!) were up 42% to at least €29m with the continuing operations contributing the substantial majority total profits. This was driven mainly by the Group's mobile software products which account for 90% of the continuing operations.

The consumer offerings achieved revenue of €29m, up 25% on 2011 and the "strategically more important" GO!Enterprise recorded sales of €12m up from €2m in 2011. The Company addresses one area that has been of concern: operating cash flow for the year increased significantly to €13m but this is an area that investors will want to keep an eye on. Over the year as a whole the Group achieved organic free cash, (excluding acquisitions and disposals) for the year of €1.6m.

The outlook statement was positive with the Company confident that its acquisition of Dialect Technologies in February 2012 will see GO!Enterprise breakthrough in the US market and become a significant contributor to Group performance.

Conclusion: The key to Globo's future success rests on its ability to accelerate sales of GO!Enterprise. It has had some success, most notably with its 24th December announcement of a new contract with a European Tier-! mobile network operator. I bought the shares on 28th December 2012 since when they have risen 34%. However, I'm not tempted to sell as on consensus forecasts they are valued at 10x 2013 earnings (21% growth) and only 6.8x 2014 for 45% growth. Further progress should be made when the Group announces new contracts.


Filed Under: Technology, Stock Picks,

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Globo plc is engaged in the provision of telecom, mobile software products and related services, as well as developing and operating broadband wired and wireless networks. The Company operates in two segments: Mobile products and services and Telecom services (S.a.a.S). Its Mobile products and services segment in sells its own mobile software products and services to its clients. Its Telecom services (S.a.a.S) segment combines telecom services with its own software products (e-business and WiFi services) that are then sold on software as a service basis. The Company’s WiPLUS consists of a managed service provided to hotels, airports, marinas and similar locations with Globo receiving revenue from venue owners. The Company’s GO!Enterprise is a platform for development, deployment and management of secure mobile apps. In June 2014, Globo PLC acquired services division of Sourcebits Inc. more »

Share Price (AIM)
50.5p
Change
0.8  1.5%
P/E (fwd)
6.6
Yield (fwd)
n/a
Mkt Cap (£m)
185.9



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About johnrosier

Johnrosier

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In September 1984, I left university with a degree in Zoology and started work in the City of London. Over the next twenty five years most of my time was spent managing UK equity portfolios with Fleming Investment Management and Henderson Global Investors, for company and local authority pension schemes as well as the reserve fund for a well known charity. During 2009 I left full time employment and decided to take time out to consider the next stage of my career. In the meantime I have been putting my years of experience to good use investing the family savings. I have thoroughly enjoyed the freedom of investing from home and despite some tricky periods during 2011 it has been a rewarding experience. In January 2012 I set up www.johnsinvestmentchronicle.com in which I record my trades and the reasoning behind them. more »



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