GO plc maintains stable turnover in 2011

In spite of a challenging economic environment and increased competition, the Group managed to keep its turnover stable, with only a marginal decrease from €132.3 million in 2010 to €131.6 million in the year under review.

 In 2011, the Group registered an operating profit of €18.4 million as against €22.8 million in 2010.

There were a number of one-off transactions relating to voluntary retirement schemes and a provision for pensions which amounted to €5.2 million (2010: €322,000).  Normalised operating profit for 2011 amounted to €23.7 million as against €23.1 million in 2010.

Normalised EBITDA amounted to €51.4 million, an increase of 4.6% over the previous year.

The telecommunications market continues to be characterised by a tough competitive environment and extensive regulation, which have substantially impacted the Group's mobile business.

The reduction in revenue from mobile business, which was impacted by regulation, and slow and steady decline in traditional fixed-line voice services have been offset by growth in TV and data services in general.

The Group also experienced growth in data hosting and related activities.

 The Group retains a strong presence in the local market with over 500,000 customer connections.

 The Group's total cost base amounted to €108.8 million.  Whilst this represents a marginal reduction of €1.2 million over the previous year, discretionary expenditure continued to be addressed and in general only expenditure directly related to sales activity experienced growth.

Of note is the growth in costs relating to the TV business as a result of the substantial growth in client base and the acquired role as the main provider of premium content in general and sports in particular.

The Group continues to streamline processes and to invest in technology and innovation, which allow it to continue to right-size its operations. 

2011 has been characterised by financial uncertainties substantially impacting the Eurozone in general and a number of countries within the Eurozone in particular.  Greece is one of the worst impacted countries.

This economic climate has seriously impacted Forthnet.  Despite an acceptable operating performance, Forthnet's results include a charge of €128.5 million representing an impairment charge attributable to goodwill arising from Forthnet's investment in Nova, its TV arm. 

The events taking place in Greece and issues impacting Forthnet have negatively impacted the Company's ability to establish the value of its investment in Forthnet through a value in use assessment.

As a result the Board of Directors decided that in the circumstances the value assigned to the investment in Forthnet through Forgendo should reflect the share price of Forthnet as quoted on the Athens Stock Exchange.

This led GO to recognise a charge of €62.3 million representing a write down in the value of its shareholding in and amounts receivable from Forgendo as at December 2011 to €3.6 million.

Net cash generated from operations amounted to €35.1 million (2010: €43.2 million).  Both years include one-time items relating to pensions and voluntary retirement costs whilst the comparative period also includes a refund of VAT relating to prior periods.

Normalised cash flow from operations for 2011 amounted to €40.4 million, marginally below the €40.9 million generated in 2010.  In 2011 the Group maintained its investment programme at the same level of 2010 and invested €25.6 million.

 The Group is reporting a loss before taxation of €45.2 million (2010: €9.1 million).

The loss per share amounted to €0.503 (2010: €0.189).  As a result the Board of Directors is not recommending the payment of a dividend.

 Commenting about these results, GO plc Chairman Deepak Padmanabhan said: "In spite of the considerable economic and regulatory challenges, the Group has been able to maintain a stable turnover and normalised operating profit, and continues to win customers in our broadband, mobile and TV markets.

 He added: "It is no surprise that the uncertainty in the Greek economy negatively impacted GO's investment in Forthnet but the Group is carefully monitoring the situation and taking a prudent stand.

Overall, GO remains a sound company with a sustainable future, thanks to its relentless efforts to improve its customers' experience and deliver value propositions."

GO's Chief Executive Officer David Kay said: "The Group has made considerable progress in its €100 million investment programme, and has renewed its entire mobile network - including the best mobile internet speeds - ensuring the company remains a leader in this segment.  Investments in the roll-out of fibre are ongoing.

apart from launching GO interactive tv, the Group has also invested in tv content and won the Champions League rights, making it the leader in TV premium sports content."

Mr Kay added: "We have an exciting investment programme continuing during 2012 and beyond that will ensure that GO offers the best internet everywhere experience, as well as a number of IT projects which will among other things empower our customers by giving them increased ability to manage their accounts with the group."