Globo’s (GBO) fast-growing international mobile software business made sure half-year results came in slightly better than expected. The company is generating positive free cash flow for the first time, too, and there’s no sign of a slowdown in the second half.
Over two-thirds of revenue now comes from overseas after more than doubling to €17m (£13.6m). Central and Latin America chipped in €5.4m from virtually nothing a year ago and sales to Asia and the Middle East quadrupled to over €6m. Meanwhile, a 137 per cent surge in higher margin mobile sales means they comprise three-quarters of the business. Globo’s CitronGo! And Go!Social now have 1.8m active users, 29 per cent more than last time and, with more employees using their own mobiles at work, revenue from its Go!Enterprise service doubled to €4.4m. Analysts at housebroker RBC Capital Markets reckon Globo should rake in €6m from this in the second half, but admit this could be conservative. Greece is less of a worry, too. The struggling domestic software business there will be sold in a few months, leaving Greece accounting for just a fraction of the business.
RBC expects full-year pre-tax profit of €17.8m, giving EPS of 4.4¢ (€12.1m and 3.2¢ in 2011).
GLOBO (GBO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 25p | MARKET VALUE: | £83m | |
| TOUCH: | 24.5-26p | 12-MONTH HIGH: | 31.5p | Low: 13p |
| DIVIDEND YIELD: | nil | PE RATIO: | 8 | |
| NET ASSET VALUE: | 22¢* | NET CASH: | €12.3m | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 19.6 | 3.18 | 0.90 | nil |
| 2012 | 25.2 | 5.86 | 1.40 | nil |
| % change | +29 | +84 | +56 | - |
*Includes intangible assets of €22.8m, or 7¢ per share £1:€1.248 | ||||
