Globo's (GBO) shift in focus from consumers to enterprise markets continues to pay off. More reliable licensing revenues saw free cash flow increase for the third consecutive year to €7.3m (£5.3m), while the business app specialist also smashed expectations by posting sales growth of 49 per cent.
The lion's share of growth came once again from Globo's flagship GO!Enterprise product, which enables employees to communicate and access files securely and remotely. Revenues here almost doubled to €57.9m as the Greek group reaped the benefits of expanding its US operations and product suite. The acquisition of two US businesses - Notify, which specialises in mobile device management, and app developer Sourcebits - notably had a positive impact. The latter brought access to heavyweight clients including Intel, Coca-Cola and Bank of America.
Management plans to take advantage of strong cash generation to make further acquisitions and entrench the group's presence in US and western European markets. Upping the marketing spend remains a major theme, too, as Globo searches for ways to drive up sales and profits.
In light of rampant demand and ongoing investment in the US, broker Canaccord Genuity upgraded its forecast for adjusted cash profit by 4 per cent to €67.5m, giving EPS of 11¢ (from €50.9m and 9¢ in 2014).
| GLOBO (GBO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 52p | MARKET VALUE: | £194m | |
| TOUCH: | 51.5-52.25p | 12-MONTH HIGH: | 62p | LOW: 34p |
| DIVIDEND YIELD: | nil | PE RATIO: | 8 | |
| NET ASSET VALUE: | 47¢* | NET CASH: | €40.4m | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 30.9 | 4.6 | 2.8 | nil |
| 2011 | 27.5 | 12.0 | 3.9 | nil |
| 2012 | 46.0 | 17.2 | 5.2 | nil |
| 2013 | 71.5 | 27.4 | 7.4 | nil |
| 2014 | 106.4 | 35.7 | 9.4 | nil |
| % change | +49 | +30 | +27 | - |
Ex-div: Payment: *Includes intangible assets of €52.9m, or 14¢ a share £1=€1.38 | ||||
