GBO.L Regulatory News (GBO)

31 Mar 2008 07:01

Globo plc31 March 2008 FOR IMMEDIATE RELEASE 31 March 2008 GLOBO plc RESULTS FOR THE 6 MONTHS AND 12 MONTHS ENDED 31 DECEMBER 2007 Globo plc ("Globo", the "Group" or the "Company"; LSE-AIM: GBO), a leader in theInformation and Communications Technology market in Greece, is pleased to announce its audited results for the 6 and 12 months ended 31 December 2007, reflecting the change in accounting reference date of the parent company. The key points refer solely to the 12 months ended 31 December 2007 and the comparable period in 2006. Key points: • These are the first results to be announced since Globo's Admission to AIM on 14 December 2007. • €3.0m in new funds were raised (net of expenses) through a share placing at the time of Admission. • The results reflect strong growth in all parts of the business. • Revenue in 2007 grew by 66% to €11.0m (2006: €6.6m). • EBITDA increased 60% to €5.6m (2006: €3.5m). • Profit before tax was up 103% to €2.1m (2006: €1.0m). • Board strengthened recently by the appointment of Dr. Joseph Coughlin as a non-executive Director. On outlook, Chairman, Brett Miller stated: "Within the last three months, Globo has achieved an excellent forward order book including approximately €4.0 million of contracts for delivery in 2008 for digitalising Greek state and parliamentary archives. These contracts, together with the growing CITRON product sales and S.a.a.S. and maintenance revenueswill provide Globo with increasing visibility of future revenues. In addition, the Group has an excellent pipeline of potential future business." "The Board is confident of delivering another year of strong growth in 2008." CONTACTS GloboBrett Miller, Non-executive Chairman +44 (0) 20-7584-3663Costis Papadimitrakopoulos, Managing Director +30 210-646-6008Dimitris Gryparis, Finance Director +30 210-646-6008 Bankside +44 (0) 20-7367-8888Simon Bloomfield or Steve Liebmann NCB Stockbrokers Limited (Nomad & Broker) +44 (0) 20 7071 5200Christopher Caldwell or Jonathan Gray About Globo Founded in 1997 by Konstantinos ("Costis") Papadimitrakopoulos and headquarteredin Halandri (a suburb of Athens), AIM-listed Globo has established itself as oneof the market leaders in the Greek ICT market. It provides e-business andtelecom software products and related services to the private and governmentalsectors in Greece as well as developing and operating broadband wired andwireless networks. It has developed to become one of the largest e-businesssoftware vendors in Greece. The three components of the Globo Group's key software revenue stream areoutlined below: • products and services that facilitate e-business; • products and services that enable access to broadband; and • resale of third-party goods. The first two of these product groups, the e-business and broadband access, areoffered under a software licence or as Software as a Service ("S.a.a.S."). Globo's products are used by private and public organisations that include morethan 600 corporate and SME clients and more than 60 public sector clients. Theyare also sold through 14 value added resellers to a large number of indirectcustomers. Globo's direct private sector customers include Xerox, National Bankof Greece, Velti, Group Marinopoulos and the University of Brighton. Globo's public sector customers in Greece include the Ministry of ForeignAffairs, the Ministry of National Education and Religious Affairs, theMunicipalities of Halandri and of Maroussi and the Hellenic parliament. Globo's e-Business platform, as well as its e-Commerce and broadband accesstechnology products have been successfully marketed and operated in Greece, UK,Ireland, France, Belgium, Cyprus, Romania, Bulgaria, Spain and Italy. CHAIRMAN'S STATEMENT Introduction I am pleased to present the first consolidated results for Globo plc (formerlyIsraeli Acquisitor 1 plc) following the acquisition of Globo Technologies S.A.and Profitel Communications S.A. in December 2007. Following Admission to AIM,Globo plc changed its accounting reference date from 30 June to 31 December tobring it into line with the Group's operating companies. The formation of theGroup has been accounted for as a reverse takeover such that they are insubstance a continuation of the Financial Statements of Globo Technologies S.A.and Profitel Communications S.A. Accordingly, these results are in respect ofthe 6 and 12 months ended 31 December 2007. However, for the purpose ofpresenting the Group's performance during 2007, the Chairman's Statement, theManaging Director's Statement and the Financial Review each refer to the 12months ended 31 December 2007 and the corresponding period in 2006. Globo delivered strong growth in revenue and profits during 2007 compared to2006 and recently we have been pleased to announce several substantial newcontracts. The excellent progress made in the first half of the year continuedthroughout the traditionally stronger second half with both the private andpublic sectors contributing to growth. Results and Finance As stated previously, the results for 2007 have been drawn up under IFRS 3"Business Combinations" and more specifically the reverse acquisition provisionstherein. This presents the Group's results as if the reverse takeover had beencompleted at the start of the year. Prior to the reverse acquisition, Globo plcwas a clean 'shell' company and, as such, it had no revenue during 2007 otherthan interest income and incurred operating costs of approximately €67,000.Comparative 2006 numbers in this statement and the accompanying financialinformation relates solely to Globo Technologies S.A., the principal operatingcompany within the Group, and Profitel Communications S.A. Revenue for the year grew by over 66 per cent to €11.0 million (2006 - €6.6million). Operating margins showed a healthy increase to 26.8 per cent (2006 -23.3 per cent) after allowing for the small margin on some €0.5 million ofrevenue arising from the disposal of slow moving telecom equipment inventory.Operating profit increased 92 per cent to €2.96 million (2006 - €1.54 million)after providing for Israeli Acquisitor's operating costs. Excluding these costs,the growth in operating profit would have been 97 per cent. Profit before taxincreased 103 per cent to €2.10 million (2006 - €1.03 million) resulting inprofit after tax improving by 116 per cent to €2.00 million (2006 - €0.93million). Basic earnings per share increased to €0.018 (2006 - €0.015). The consolidated balance sheet reflects strong growth in the business with networking capital reflecting the increase in revenue, which was particularlyweighted towards the closing months of the year. Net debt at 31 December 2007was €4.65 million (2006 - €4.96 million) including the €3.0 million net proceedsfrom the fund raising in December 2007. Strategy Globo's strategy, as set out at the time of Admission to AIM, is to expand itsoperations both within its Greek domestic market and internationally. There area number of strands to the growth strategy. Within the Greek market, Globo plansto expand the sale of its CITRON branded software products to the corporate andgovernment sectors. Globo also serves the Small and Medium Enterprise ("SME")market by delivering its products as Software as a Service ("S.a.a.S.") throughits Profitel subsidiary. The Greek government market (local and national) isbeing developed successfully, often through collaborative tenders.Internationally, Globo plans to establish local sales and support offices inneighbouring Balkan countries in order to drive forward the expansion of itsS.a.a.S. business model. Underpinning these plans is the expected growth in ICT markets in Greece andEastern Europe at a rate which significantly exceeds that for more matureWestern European and North American markets. During the three months since Admission to AIM, Globo has already madesignificant progress on each strand of its growth plan. Board Following Admission, the Board comprised a balance of non-executive andexecutive Directors. We were pleased to announce the recent appointment of Dr. Joseph Coughlin as anon-executive Director. Dr. Coughlin's broad experience within both the publicand private sectors will enable him to contribute to Globo's plans for growth. Outlook Within the last three months, Globo has achieved an excellent forward order bookincluding approximately €4.0 million of contracts for delivery in 2008 fordigitalising Greek state and parliamentary archives. These contracts, togetherwith the growing CITRON product sales and S.a.a.S. and maintenance revenues,will provide Globo with increasing visibility of future revenues. In addition,the Group has an excellent pipeline of potential future business. The Board is confident of delivering another year of strong growth in 2008. In closing I would like to thank the board, the Group's employees and ouradvisors for their tremendous efforts in a very busy year. Brett MillerNon-executive Chairman MANAGING DIRECTOR'S STATEMENT Introduction I am pleased to report that Globo has made strong progress in all aspects ofbusiness during 2007, finishing the year with the Company's Admission to AIM inmid-December. Our new public company status will reinforce Globo's position as aleading e-business Group within our principal markets. Operations Globo's business currently operates through two main companies: GloboTechnologies which delivers its CITRON branded e-business software products andbroadband services to both private and public sector customers and Profitel,which delivers the Group's Software as a Service ("S.a.a.S") offering to the SMEmarketplace. Markets Government and Public Sector During 2007, Globo has won a number of public sector contracts for deliveringe-business applications to local authorities including governmental portals,intranets, digitalisation of libraries, interactive services for citizens andgeographical information systems. Since Admission to AIM in December 2007, Globohas won major contracts with the Parliament of Greece and the Greek Ministry ofNational Education & Religious Affairs for the digitalisation of records andarchives. These contracts emphasise the strength of Globo's position within themarket for document digitalisation and additional contracts are expected to besigned during the course of the current year. Revenues earned from public sectorcustomers in 2007 were approximately €2.4 million. Corporate During 2007, Globo has won projects from several customers in Greece, such asMarinopoulos Group, Agricultural Bank, Gregory's Food Service Group, Bull,Quality and Reliability, Velti and Xerox. The majority of the projects relate toGlobo's e-business applications including Citron Internet Server, CitronDocument Server and Citron CRM as well as broadband access technologiesincluding Internet Hotel and WiPLUS. Revenues earned from corporate sectorcustomers in 2007 were approximately €8.5 million. SME- Software as a Service The SME marketplace is served through the Profitel, a subsidiary company in theGroup; this was established initially as a separate company and was acquired byGlobo Technologies with effect from 30 June 2007. Profitel provides Globo'ssuite of CITRON products bundled with appropriate broadband and telephonyservices as a S.a.a.S. to the SME marketplace, delivering a stream of recurringrevenues. In 2007, Profitel contributed approximately €0.1 million to Grouprevenues. Towards the end of 2007, Globo acquired the assets of OneSoft S.A. for a nominalsum. Based in Arta, Western Greece, OneSoft is a business developing softwarefor the SME marketplace. Based in a part of Greece with lower costs than Athens,the acquisition provides an additional software development team and a callcentre to support the Group's customers, particularly those using Profitel'sS.a.a.S. These additional resources will be particularly valuable as Globoexpands into neighbouring geographic areas. International Globo currently provides Internet Hotel (a fully packaged broadband connectivitysolution for the hotel and restaurant sector) and WiPLUS (the operation of WiFi'hotspots' at venues) to customers in many European countries in addition toGreece. WiPLUS service is already commercially deployed in Cyprus through arepresentative. Progress is being made in developing new subsidiaries to market and supportS.a.a.S. in Bulgaria and Romania with marketing campaigns expected to belaunched in these countries in Q3, 2008. Once these are established, Globoexpects to expand its S.a.a.S. into Turkey and Cyprus by forming its own localsubsidiaries. Globo is also participating in Interactive Services for Electronic Tourism("I-Set"), an EU funded project for delivering interactive services to smallerhotels for WiFi, room bookings and general hotel administration. Globo is thesole technological partner and will provide services to this project, givingaccess to a wider market within the EU including the establishment of some 100WiFi hotspots and S.a.a.S customers in Spain, Italy, Cyprus and Greece. TheI-Set project is also supported by Deloitte & Touche in Portugal, a majorprovider of technology consultancy services to the tourism industry, and work isunderway with Bournemouth University on promoting e-tourism. This project isexpected to give Globo significant experience and opportunities for deliveringits S.a.a.S and WiPLUS services to small hotel establishments on a pan-Europeanbasis. Products and Services Globo has continued its investment in all aspects of its product and servicelines. All existing platforms have been upgraded with significant new featuresin order to be fully competitive, both internationally and locally. Globo'sholistic approach in the development of business software and service offeringshas continued, taking full advantage of the developing convergence of telecomsand IT. Highlights of the key product and services developments in 2007 include: New e-Business Products CITRON Digital Library, an integrated component within Citron Document Server,provides an end-to-end solution for handling digital assets from theirgeneration through capturing devices, such as Zeutschel scanners, to thedocumentation, archiving and dissemination of the content through differentplatforms and media. This new product has provided a significant edge to Globo'soffering in large public and private tenders for digitalisation projects and isnow used in the Greek General State Archives, the Greek Parliament and numerousother clients. Globo Development Framework (GDF) is a software development toolset developed toautomate software development, personalise and integrate bespoke solutions tomeet specific customer demands. GDF is being used to develop new solutions andto tailor existing applications by using graphical interface design and codingtools, thus limiting the source code development to a minimum to achieve ashorter time-to-market and lower development costs. Several bespoke solutionshave been developed using GDF, such as Gregory's ordering and quality assuranceintranet application integrated to the customer's SAP back office system,providing access and seamless ordering, delivery tracking and operationalassistance to the 200 franchisees within Greece. Software as a Service ("S.a.a.S.") Profitel's offering of S.a.a.S. has been extended with additional servicesincluding SMS, fax and email campaigns, hosting services, e-commerce and websitebuilders. Additionally, significant development has focused on the S.a.a.S.licencing server to enable the provision of customer installed applications(such as CRM, ERP and Document Management) under the S.a.a.S. payment model.This allows the Group to develop applications to address typical customerconcerns such as security and the outsourced storage of critical data andcommercial information, through installing the application in the customer'spremises but charging on a "pay as you go" basis. Broadband Access The Group's WiPLUS service has also undergone significant development. Newfeatures include payment modules supporting pre-paid, subscription and micropayments utilising online credit card clearance, PayPal accounts and premium SMSusage. Additional new network features include dynamic IP, SMTP redirection,mobile client authentication and virtual user LANs. The WiPLUS Hotspot modulehas been extended to support 'thinner' clients running LINUX platforms in orderto minimise the costs of investment for smaller installations such as cafes andrestaurants. The WiPLUS infrastructure currently supports all standards of the Wi-Fi Alliancein terms of functionality and roaming, thus being able to be integrated withinglobal Wi-Fi aggregator offerings. People Since the Admission to AIM, recruitment in Athens and the acquisition of OneSofthas increased the number of direct employees from 49 to 85 today. I would like to thank each employee for their hard work during the yearincluding the substantial additional burden during the preparation for the IPOin December 2007. Key Tasks for 2008 Globo's key priorities in 2008 are to maintain the excellent momentum of thepast year in each area of the business. In particular, we expect to see a steadyincrease in recurring revenues as a proportion of the Group total as the yearprogresses, thereby improving the forward visibility for the business as awhole. Globo aims to expand its geographical footprint to neighbouring countriesby forming subsidiaries which will replicate Profitel's successful businessmodel, as well as establishing partnerships which will enable the Group toexploit additional markets around the world. Organic growth of the Group'scompanies and the acquisition of smaller, complementary businesses will be thetools to develop Globo's positioning as a major e-business provider in theregion. Investment in all aspects of the business is considered to be a key driver forprofitable growth. Globo sees tremendous opportunities in the areas of SMEs,S.a.a.S and ubiquitous computing, driven by broadband availability through fixedand wireless networks. The structural EU funding is also expected to providefurther impetus to the growth rate of the ICT market within the region. Costis PapadimitrakopoulosManaging Director FINANCIAL REVIEW Profit for the financial year before tax was €2.10 million (2006 - €1.04million). The profit after tax for the financial year of €2 million (2006 - €0.9million) reduced the retained losses of previous years. In the financial year ended 31 December 2007, revenue reached €11.03 million,posting an increase of 66.4 per cent compared with 2006 (€6.63 million). Theincrease in revenue was fuelled by organic growth in both private (51 per centfrom 2006) and public sector (167 per cent from 2006) segments of the Group. Therevenue mainly consists of sales of the Group's own products and services (85per cent) while 15 per cent of the revenue comes from sales of third partygoods. Operating expenses excluding depreciation and amortization were €5.68 million,representing an increase of 73.1 per cent compared with 2006 (€3.28 million) insupport of the increase in revenue. Depreciation and amortization of intangiblesreached €2.56 million (€1.98 million in 2006) reflecting the significant productdevelopment undertaken both in 2006 and 2007.Operating profit increased by 92.2per cent to €2.96 million (€1.54 million in 2006) which despite the increase of29.3 per cent in the depreciation and the amortization charge, delivered anoperating margin of 26.8 per cent, improved from 2006 (23.2 per cent). The net interest charge for the year was €0.86 million, an increase of €0.35million, as the Group used financing tools for working capital purposes, mainlyon significant public sector contracts. We believe that these costs will bereduced in 2008 as management is already renegotiating for reduced charges andcommissions with every cooperating bank. Profit before taxes for 2007 was €2.10 million representing an increase of 103.9per cent over 2006 (€1.03 million). The taxation charge for the year was €0.10million (2006 - €0.11 million) which relates predominantly to deferred taxationas the Group has taken advantage of special tax relief incentives provided bythe Greek Government. These laws provide special treatment for investments madeby the Group. Basic earnings per share increased from €0.015 to €0.018. The balance sheet at 31 December 2007 was substantially strengthened as a resultof raising €2.99 million (net) by floating on AIM in December 2007. The fundsraised by the IPO will be used to fund increased working capital requirementsthat resulted from the stout growth in revenue and to finance the productdevelopment and investments of the Group. Total assets were €26.62 million at 31 December 2007 (2006 - €17.32 million). Oftotal assets, €10.21 million were held in non current assets, €12.71 millionwere held in trade debtors, prepayments and other current assets and €3.70million were cash and cash equivalents. Equity increased by 96.5 per cent to€11.56 million and total liabilities increased by 31.6 per cent to €15.06million. Accounts receivables and prepayments increased by €3.04 million primarilybecause of the high duration of large public projects that the Group gained inthe year. The Group expects a significant proportion of the outstanding amountswill be recovered in 2008. Inventory was €0.38 million, reduced by €0.55 million(2006 - €0.93 million) as a result of the disposal of slow moving telecomequipment. Cash generated from operations was €1.56 million while net cash used ininvesting activities was €4.92 million reflecting the significant investment inproduct development and infrastructure. Dimitris GryparisFinance Director CONSOLIDATED INCOME STATEMENTFor the 6 and 12 months ended 31 December 2007 Six months Six months Year Year ended ended ended ended 31 December 30 June 31 December 31 December 2007 2007 2007 2006 •'000 •'000 •'000 •'000 Continuing Operations Revenue 6,936 4,093 11,029 6,627Cost of sales (3,445) (2,440) (5,885) (3,369) ---------- ---------- ---------- ---------- Gross Profit 3,491 1,653 5,144 3,258 Other operating income 79 76 155 167Distribution expenses (417) (298) (715) (365)Administrative expenses (928) (619) (1,547) (1,286)Other operating expenses (58) (18) (76) (233) ---------- ---------- ---------- ---------- Operating Profit 2,167 794 2,961 1,541Finance costs (net) (464) (394) (858) (506) ---------- ---------- ---------- ---------- Profit before Tax 1,703 400 2,103 1,035Taxation (37) (64) (101) (106) ---------- ---------- ---------- ----------Profit for the period/yearfrom continuing operationsattributable to the equityholdings of the parent 1,666 336 2,002 929 ========== ========== ========== ========== Six months Six months Year Year ended ended ended ended 31 December 30 June 31 December 31 December 2007 2007 2007 2006 Basic earnings per share(• per share) (Note 3) 0.015 0.003 0.018 0.015 ========== ========== ========== ========== Diluted earnings per share(• per share) (Note 3) 0.015 0.003 0.018 n/a ========== ========== ========== ========== A separate statement of recognised income and expense is not presented as theonly recognised income and expense is the profit for the period/year, all ofwhich is attributable to the equity holders of the parent. CONSOLIDATED BALANCE SHEETAt 31 December 2007 As at As at As at 31 December 30 June 31 December 2007 2007 2006 •'000 •'000 •'000ASSETS Non-Current AssetsProperty, plant and equipment 3,339 3,148 2,740Intangible assets 5,508 5,029 3,975Goodwill 194 67 -Deferred tax assets 1,157 1,195 1,248Other receivables 7 19 16 ----------- ----------- -----------Total Non-Current Assets 10,205 9,458 7,979 ----------- ----------- ----------- Current AssetsInventories 379 1,143 925Trade receivables 9,930 6,933 6,489Other receivables 84 87 481Other current assets 2,322 1,476 366Cash and cash equivalents 3,696 872 1,077 ----------- ----------- -----------Total Current Assets 16,411 10,511 9,338 ----------- ----------- ----------- TOTAL ASSETS 26,616 19,969 17,317 =========== =========== =========== EQUITY AND LIABILITIES Shareholders' EquityOrdinary shares (Note 4) 1,781 3,211 3,211Share premium 3,894 700 700Other reserves 5,708 4,153 4,153Reverse acquisition reserve 351 - -Retained losses (179) (1,849) (2,185) ----------- ----------- -----------Total Equity - Capital and Reserves 11,555 6,215 5,879 ----------- ----------- ----------- Non-Current LiabilitiesBorrowings 1,500 1,750 1,500Retirement benefit obligations 99 44 44Finance lease liabilities 1,838 1,949 1,928Provisions 37 37 52 ----------- ----------- -----------Total Non - Current Liabilities 3,474 3,780 3,524 ----------- ----------- ----------- Current LiabilitiesTrade and other payables 3,548 3,349 2,287Taxes payable 331 427 776Borrowings 6,843 5,199 4,536Accrued liabilities 865 999 315 ----------- ----------- -----------Total Current Liabilities 11,587 9,974 7,914 ----------- ----------- ----------- TOTAL EQUITY AND LIABILITIES 26,616 19,969 17,317 =========== =========== =========== CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Reverse Share Share Shares Merger Other Acquis Ret- Prem- to be Res- Res- -ition ained Capital ium issued erve erves Reserve Losses Total •'000 •'000 •'000 •'000 •'000 •'000 •'000 •'000 Balance asat 1,652 - - - 3,021 - (1,823) 2,8501 January2006Allocationofprofit for - - - - 1,291 - (1,291) -2005Increase incapital byallocationof 159 - - - (159) - - -reservesIncrease incapital 1,400 700 - - - - - 2,100Profit forthe - - - - - - 929 929year -------------- ---------------------- --------- -------- ------Totalchanges 1,559 700 - - 1,132 - (362) 3,029for the -------------- --------------------- --------- -------- ------yearBalance asat31 December 3,211 700 - - 4,153 - (2,185) 5,8792006 ===================== ============== ========= ======== ====== Balance asat 3,211 700 - - 4,153 - (2,185) 5,8791 January2007Profit forthe - - - - - - 336 336period --------------------- -------------- --------- -------- ------Totalchanges - - - - - - 336 336for the --------------------- -------------- --------- -------- ------periodBalance asat 3,211 700 - - 4,153 - (1,849) 6,21530 June ===================== ============== ========= ======== ======2007 Balance asat 3,211 700 - - 4,153 - (1,849) 6,2151 July 2007Increase incapital 1,713 4,039 - 1,500 - - - 7,252Costs of - (1,266) - - - - - (1,266)issueReverseacquisition (3,143) 421 15 - - 351 - (2,356)Share basedpayments - - 40 - - - - 40Profit forthe - - - - - - 1,670 1,670period --------------------- -------------- --------- -------- ------Totalchanges (1,430) 3,194 55 1,500 - 351 1,670 5,340for the --------------------- -------------- --------- -------- ------periodBalance asat31 December 1,781 3,894 55 1,500 4,153 351 (179) 11,5552007 ===================== ============== ========= ======== ====== CONSOLIDATED CASH FLOW STATEMENT Six months Six months Year ended ended ended 31 December 30 June 31 December 2007 2007 2006 •'000 •'000 •'000Cash Flows from Operating ActivitiesCash generated from operations (Note5) 368 1,195 2,633Interest paid (476) (401) (506)Income tax paid - (7) (15) ----------- ---------- ----------Net Cash from Operating Activities (108) 787 2,112 =========== ========== ========== Cash Flow from Investing ActivitiesAcquisition of subsidiaries (453) (63) -Purchases of tangible and intangibleassets (2,211) (2,314) (3,434)Sales of tangible and intangible assets 85 5 -Increase in other long term assets 13 (1) -Interest received 12 7 - ----------- ---------- ----------Net Cash from Investing Activities (2,554) (2,366) (3,434) =========== ========== ========== Cash Flows from Financing ActivitiesProceeds from issue of share capital 4,148 456 1,644Increase in long term liabilities (57) 6 170Increase in long term loans (250) 250 399Increase in current loans 1,823 796 283Repayments of obligations under financeleases (178) (134) (223) ----------- ---------- ----------Net Cash from Financing Activities 5,486 1,374 2,273 =========== ========== ========== Net Increase/(Decrease) in Cash and CashEquivalents 2,824 (205) 951 =========== ========== ========== Movement in Cash and Cash EquivalentsCash and cash equivalents at thebeginning of the period 872 1,077 126Net increase/(decrease) in cash and cashequivalents 2,824 (205) 951 ----------- ---------- ----------Cash and Cash Equivalents at the End ofthe Period 3,696 872 1,077 =========== ========== ========== NOTES TO THE FINANCIAL STATEMENTSFor the 6 and 12 months ended 31 December 2007 1 Basis of preparation The Financial Statements have been prepared in accordance with InternationalFinancial Reporting Standards as adopted by the European Union ("IFRS"), IFRICinterpretations and the parts of the Companies Act 1985 applicable to companiesreporting under IFRS. The Financial Statements have been prepared under thehistorical cost convention. Prior to the acquisition of Globo Technologies S.A., Globo plc had an accountingreference date of 30 June. It has since been decided to amend the year end to 31December in order to be coterminous with Globo Technologies S.A. and ProfitelCommunications S.A., the principal operating companies within the Group. As aresult, these Financial Statements are for the six month period from 1 July 2007to 31 December 2007. The comparative periods consist of Globo Technologies S.A.and Profitel Communications S.A. Relevant information has been included in theIncome Statement, Balance Sheet, Cash Flow Statement and Statement of Changes inEquity to enable comparison with previous periods. The financial information in this announcement does not constitute the Company'sstatutory accounts for the six and twelve month periods ended 31 December 2007,but is derived from those accounts. Statutory accounts for the year ended 30June 2007 have been delivered to the Registrar of Companies and those for theperiod to 31 December 2007 will be delivered after the Company's Annual GeneralMeeting. The auditors have reported on those accounts; their reports wereunqualified and did not contain statements under s237(2) or s237(3) CompaniesAct 1985. 2 Segmental analysis of revenue Six months Six months Year Year ended ended Ended Ended 31 December 30 June 31 December 31 December 2007 2007 2007 2006 •'000 •'000 •'000 •'000 Revenue from softwareproducts & services 6,119 3,309 9,428 5,913Revenue from telecomservices 110 - 110 -Revenue from sales ofthird party goods 707 784 1,491 714 ---------- --------- ---------- ---------- Total 6,936 4,093 11,029 6,627 ========== ========= ========== ========== Revenue is mainly derived from sales of Group's software products and servicesto private and public sector customers based upon contractual agreements. Salesof third party goods which are treated as a complement to the Group's softwareproducts and services are recognized according to the relevant contractualobligations. 3 Earnings per Share Basic earnings per share are calculated by dividing the profit after taxattributable to equity holders by the weighted average number of ordinary sharesin issue during the period. Six months Six months Year Year ended ended ended Ended 31 December 30 June 31 December 31 December 2007 2007 2007 2006Profit attributabletoequity holders of the 1,666 336 2,002 929Company (€000's)Weighted averagenumberof ordinary shares in 111,715,794 110,000,000 110,857,897 63,314,386issue Diluted earnings per share assumes that options and warrants outstanding at 31December 2007 were exercised at 1 January 2008, for options and warrants wherethe exercise price was less than the average price of the ordinary shares duringthe period. On this basis, the calculation of diluted earnings per share isbased on the profit attributable to ordinary shareholders divided by 112,215,794(six months ended 30 June 2007:110,500,000; year ended 31 December 2007:111,357,897) ordinary shares. 4 Share Capital Company Ordinary shares Redeemable shares Number Nominal Number Nominal value value • •AuthorisedAt 1 July 2007 200,000,000 200,000 4,000,000 40,000Increase in period 2,800,000,000 2,800,000 - -Consolidation (2,700,000,000) - - - ---------- --------- --------- ---------At 31 December 2007 300,000,000 3,000,000 4,000,000 40,000 ========== ========= ========= ========= On 13 December 2007, every ten issued, and authorised but unissued, ordinaryshares of 0.1p each in the share capital of the Company was consolidated intoone ordinary share of 1p each, but otherwise with the same rights attached tothem as stated in the Articles of Association. Allotted, Called up and Fully Paid Ordinary shares Number Nominal value •'000 At 1 July 2007 - shares of 0.1p each 50,000,000 68Consolidation (45,000,000) - ---------- --------- 5,000,000 68 Issued in the period - placing shares 15,589,530 213Issued in the period - consideration shares 110,000,000 1,500 ---------- ---------At 31 December 2007 - shares of 1p each 130,589,530 1,781 ========== ========= Redeemable shares rank pari passu with the ordinary shares save that they areredeemable at par at the option of the Company at any time. The holders ofordinary shares and redeemable shares are entitled, pari passu amongstthemselves, to the profits of the Company available for distribution to bedistributed according to the amounts paid up on such ordinary shares orredeemable shares. Group Number of Ordinary shares Share premium shares •'000 •'000At 1 January 2006 4,130,000 1,652 -Issue of shares 3,896,250 1,559 700 ------------ ------------ -----------At 31 December 2006 8,026,250 3,211 700 ============ ============ =========== At 1 January 2007 8,026,250 3,211 700 ------------ ------------ -----------At 30 June 2007 8,026,250 3,211 700 ============ ============ =========== At 1 July 2007 8,026,250 3,211 700Reverse acquisitionadjustments (8,026,250) (3,211) -Consideration shares 110,000,000 1,500 -Existing shares of GloboPlc 5,000,000 68 421Placing shares 15,589,530 213 2,773 ------------ ------------ -----------At 31 December 2007 130,589,530 1,781 3,894 ============ ============ =========== Under reverse acquisition accounting, the equity structure appearing in theconsolidated financial statements shall reflect the equity structure of thelegal parent, including the equity instruments issued by the legal parent toeffect the combination. 5 Consolidated Cash Generated from Operations Six months Six months Year ended ended Ended 31 December 30 June 31 December 2007 2007 2006 •'000 •'000 •'000 Profit for the period before tax 1,703 400 1,035Adjustments for:Depreciation of property, plant andequipment 247 236 321Amortisation of intangible assets 1,164 893 1,654Provisions - - (96)Share-based payments 40 - -Work in progress 436 (639) -Recognition of government grants (48) (23) (45)Interest income/expenses 464 394 506Adjustments for changes in workingcapitalDecrease in inventory 328 456 211Increase in trade receivables (2,910) (606) (1,003)Increase in other current assets (846) (1,108) (134)Increase/(decrease) in liabilities(except bank and tax) (114) 1,544 (65)(Decrease)/increase in tax liabilities (96) (352) 249 ------------ --------- ----------Cash Generated from Operations 368 1,195 2,633 ============ ========= ========== This information is provided by RNS The company news service from the London Stock Exchange