GO plc increased its profit margin by 1.4 per cent in the first half of the year, although its operating profit dipped by €1.7 million as the company incurred one-off costs related to an IPO and a voluntary retirement scheme.
The group said that the BMITT Initial Public Offering, a voluntary retirement scheme and the one-off release in bad debt provisions due to IFRS 9 adoption had led to a €4 million increase in expenses during the first half of the year.
When those costs were factored out, the group’s operating profit of €14.3 million was €1 million higher than that reported in 2018.
Cash generation from operations during the period under review stood at €24.8 million (2018: €24.8 million) and allowed the company to fund investments of €16.9 million (2018: €15.5 million). The group’s cash position was amplified by the proceeds from the disposal of the non-controlling interest in BMITT, part of which was distributed as a special dividend in the current year.
GO’s fibre-to-the-home project continued to expand and by the end of the July more than 28,480 customers were using the network within 100,000 homes.
The company expects the service to be available to 120,000 residences by the end of the year. The service will be made available to rival telecoms firm Vodafone following a deal struck by the two companies in late 2018.
Investments in GO’s subsidiaries have also positively contributed to the overall profitability of the Group. During the period under review, BMITT retained same levels of operating profit as in 2018 whereas registered a marginal decrease in profit before taxation, in particular through the adoption of IFRS16 which resulted in higher amortisation and finance charges.
GO’s subsidiary in Cyprus, Cablenet continued to register positive results. Revenue increased by 8.5%, EBITDA by 12%, operating profit remained stable whereas profit before tax increased by 4.7%. This is due to Cablenet’s continued expansion of its network and more customers opting for Cablenet as their preferred service provider. Customer base grew by more than 9% compared to 2018, now exceeding 66,685 subscribers.
The Group continues to enjoy a healthy financial position. As at 30th June 2019 the Group had a total asset base of €313.5 million which is 38.6% (2018: 47%) funded through equity. The reduction, when compared to 2018, is due to the increase in right-of-use assets which are financed by lease liabilities. During the first six months of 2019, borrowings net of cash holdings increased from €56.5 million as at 31 December 2018 to €59.6 million as at 30 June 2019.
“These results continue to confirm that whilst we continue to keep our customers connected to what matters most to them, our strategy is also delivering returns to all shareholders,” comments GO’s CEO Nikhil Patil.
“This year, we have capitalised on our popular brand Homepack and revamped our offering by allowing customers to personalise their own Homepack by choosing the services that best suit their lifestyle, a move that has been very positively received by our customers. Moreover, the significant investments that GO has made in its mobile network are leading to substantial increases in our mobile subscriber base and growth in usage of mobile data. Our investments in networks and technology will continue to drive our passion to serve customers better,” added Mr Patil.