It's still all about Telecable at technology, media and telecoms investment group Zegona Communications (ZEG). The group's first and only acquisition, a Spanish telecoms company, has performed well over the year, with revenue increasing 3 per cent to €139m (£118m) for the year. This was driven by trading in the consumer mobile and business sectors, which grew 10.3 per cent and 6.2 per cent, respectively.
However, this did not translate into improved cash profits, which were largely flat on an adjusted basis at €65.1m. The company cited offsetting factors including a substantial investment in premium football content and higher mobile access costs from a legacy agreement, which will reduce in the first half as the company transitions to a new arrangement.
Management expects the company to generate significant excess cash in 2017, supported by rising prices and a strengthening Spanish economy. Excess cash will be returned to shareholders, or used to fund acquisitions - management said industry consolidation, technology convergence and trends in consumer consumption were conducive to its buy-fix-sell strategy.
Analysts at JPMorgan expect full-year adjusted cash profit of €64m, giving a loss per share of 6ȼ (from a €61m profit and 3ȼ loss in 2016).
| ZEGONA COMMUNICATIONS (ZEG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 149p | MARKET VALUE: | £291m | |
| TOUCH: | 147-150p | 12-MONTH HIGH: | 149p | LOW: 99p |
| DIVIDEND YIELD: | 3% | PE RATIO: | na | |
| NET ASSET VALUE: | 185ȼ* | NET DEBT: | 71% | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (ȼ) | Dividend per share (p) |
|---|---|---|---|---|
| 2015† | 53.0 | -16.4 | -16.7 | nil |
| 2016 | 141 | 10.9 | -2.8 | 4.5 |
| % change | +166 | - | - | - |
Ex-div:na Payment:na *Includes intangible assets of €560m, or 286ȼ a share †Zegona was incorporated on Jan 2015 and floated in Mar 2015 £1=€1.17 | ||||
