Fears that political turmoil in Greece would weigh on Globo (GBO) proved unfounded as insatiable demand for enterprise mobility solutions fuelled a 41 per cent rise in first-half operating profits to €23.2m (£17.2m). The software group also bowed to market pressure by directly expensing research costs, and moved almost all of its cash reserves to safer banks. Investors sent its shares up 9 per cent on results day.
Robust renewals and new customers such as Vodafone and Coca-Cola drove sales of Globo's mobile solutions - GO!Enterprise, GO!Social and CitronGO! - up 65 per cent to €66.2m. The group also made inroads into the enormous US market, where sales leapt more than seven-fold to north of €15m. Improved cash generation fuelled a 71 per cent rise in free cash flow to €7.2m.
Management plans to secure further growth by launching add-ons to its platforms that tap into explosive markets such as the internet of things, wearable devices and machine-to-machine (M2M) communications. The company has also agreed to acquire a European specialist in 'bring your own device' and mobile-security software for €14m, and continues to sound out larger opportunities.
Broker Canaccord Genuity expects full-year pre-tax profits of €47.6m, giving EPS of 11¢ (FY 2014: €35.7m and 9¢).
GLOBO (GBO) | ||||
---|---|---|---|---|
ORD PRICE: | 38.3p | MARKET VALUE: | £143m | |
TOUCH: | 38.0-38.5p | 12-MONTH HIGH: | 64p | LOW: 25p |
DIVIDEND YIELD: | nil | PE RATIO: | 5 | |
NET ASSET VALUE: | 53¢* | NET CASH: | €47.4m |
Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
---|---|---|---|---|
2014 | 46.5 | 16.1 | 4.3 | nil |
2015 | 72.4 | 22.0 | 4.9 | nil |
% change | +56 | +37 | +14 | - |
*Includes intangible assets of €56.9m, or 15¢ a share £1=€1.35 |