RNS Number:0069C
GMO Limited
14 August 2007
Press Release 14 August 2007
GMO Limited
("GMO" or the "Group")
Unaudited 2007 Interim Results
GMO Limited (AIM:GMO), an AIM-listed leading provider of wireless value-added
services ('WVAS') currently focused on the Chinese market today announces its
unaudited Interim Results, for the six months ended 30th June 2007.
Highlights
* Successfully completed the acquisition of 20% of Wisdom Choice Investments
Ltd ("WCI") for a consideration of USD23.8 million financed in part by the
issue of USD20.235 million Murabahah Loan Notes
* Achieved EBITDA of USD1.7 million*
* Earnings per share of 1.43 US cents
* GMO Limited was formed in June 2006 and therefore no comparables are available
Commenting on the results, Tan Sri Datuk Dr Omar Rahman, Chairman of GMO, said:
"GMO will continue to focus on the strong fundamentals of its service offering
to ensure the Company keeps pace with the strong growth of the
telecommunications sector currently being achieved in China."
Eugene Goh, Chief Executive Officer of GMO, added: "We will continue to build up
on our competitive advantages in the telecommunications sector and roll-out
innovative products and services in anticipation of 3G in China"
For further information:
GMO Limited
Eugene Goh, Chief Executive Officer Tel: + 65 9690 0099
eugene@gmoglobal.com www.gmoglobal.com
Blue Oar Securities
Justin Lewis Tel: +61 (0) 3 9607 8439
John Wakefield Tel: +44 (0) 117 933 0020
jwakefield@blueoarsecurities.co.uk www.blueoarsecurities.co.uk
Media enquiries:
Abchurch
Chris Lane/ Georgina Bonham Tel: +44 (0) 20 7398 7700
georgina.bonham@abchurch-group.com www.abchurch-group.com
Chairman's Statement
Overview
On 22 January 2007, GMO completed the acquisition of a 20% equity interest in
WCI, the exclusive service and technology provider for ColorComm Software
Technology Group ("ColorComm"), a market leader in the WVAS and interactive
media services in China.
For the six months ended 30 June 2007, GMO achieved an EBITDA of USD1.7 million
on the back of revenue of USD5.4 million.
Basic earnings per share ('EPS') were 1.43 US cents.
Operational Review
The operating environment within the WVAS industry during the first half of 2007
has been difficult due to the full implementation of the various new regulations
imposed by the Ministry of Information Industry of China. However, the
anticipated adoption of 3G in China will be a significant factor to boost the
already exponential growth of the telecommunications sector in China. GMO will
continue to roll-out new products and services in anticipation of 3G in China
and the Company is well positioned to exploit opportunities in this new market.
Current trading and prospects
Despite the challenging environment currently being experienced by the WVAS
industry, GMO will continue to expand its range of products and services to
increase its revenue base and to improve its profitability.
GMO's share of WCI's profit after tax was USD0.5 million for the financial
period from 22 January 2007 to 30 June 2007.
Tan Sri Datuk Dr. Omar A. Rahman
Chairman
14 August 2007
CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
PERIOD FROM PERIOD FROM PERIOD FROM
1.1.2007 20.6.2006 20.6.2006
TO 30.6.2007 TO 30.6.2006 TO 31.12.2006
USD'000 USD'000 USD'000
Notes (AUDITED)
Revenue 5,396 - 2,888
Cost of sales (3,220) - (1,918)
Gross Profit 2,176 - 970
Administrative expenses (440) (5) (427)
EBITDA* 1,736 (5) 543
Other income 48 - 583
Finance cost (762) - -
Amortisation (453) - (334)
Profit / (Loss) from operations 569 (5) 792
Share of profit after tax of 489 - -
associate
Profit / (Loss) before taxation 1,058 (5) 792
Taxation
Profit / (Loss) after taxation 1,058 (5) 792
Minority interest (486) - (184)
Profit / (Loss) for the period 572 (5) 608
Earnings per share attributable
to equity holders of the parent
- Basic (cent) 4 1.43 NA 1.52
- Diluted (cent) NA NA NA
*EBITDA - denotes "Earnings Before Interest, Taxation, Depreciation and
Amortisation."
This is the unaudited interim report on the consolidated results for the
financial period from 1 January 2007 to 30 June 2007 announced by the Company in
compliance with AIM requirements.
The unaudited consolidated income statement should be read in conjunction with
the audited financial statements for the financial period ended 31 December 2006
and the accompanying explanatory notes attached to the interim financial
statements.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AT AT AT
30 JUNE 2007 30 JUNE 2006 31 DECEMBER 2006
USD'000 USD'000 USD'000
Notes (AUDITED)
Non - current assets
Plant and equipment 1 - -
Intellectual property 12,190 - 12,643
Investment in associate 5 24,645 - -
36,836 - 12,643
Current assets
Amount owing by a related 1,830 - 1,384
party
Other receivables, deposits 22 - 5,214
and prepayments
Suspense for Profit rate on 6 2,658 - -
Murabahah Loan Notes
Cash and bank balances 1,936 - 6,323
6,446 - 12,921
Current liabilities
Trade payables - - 1,851
Other payable and accruals 150 - 294
Provision - - 2,300
Profit rate payable on
Murabahah Loan Notes - 6 1,739 - -
Tranche 1
Amount owing to related
parties 2,444 5 1,719
4,333 5 6,164
Net current assets 2,113 (5) 6,757
Net Assets / (Liabilities) 38,949 (5) 19,400
Financed by:
Capital and reserves
Equity attributable to
equity holders of the parent
Share capital 7,542 - 7,542
Share premium 9,809 - 9,809
Other reserve - 161
161
Exchange fluctuation reserve 37 - 72
Retained profits /
(Accumulated losses) 1,180 (5) 608
18,729 (5) 18,193
Minority Interest 1,724 - 1,207
Total equity 20,453 (5) 19,400
Non-current liabilities
Profit rate payable on
Murabahah Loan Notes 6 1,681 - -
-Tranche 2
Murabahah Loan Notes 6 16,815 - -
38,949 (5) 19,400
Net assets per share attributable
to ordinary equity
holders of the parent (cent) 93 NA 48
This is the unaudited interim report on the consolidated results for the
financial period from 1 January 2007 to 30 June 2007 announced by the Company in
compliance with AIM requirements.
The unaudited consolidated balance sheets should be read in conjunction with the
audited financial statements for the financial period ended 31 December 2006 and
the accompanying explanatory notes attached to the interim financial statements.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (UNAUDITED)
PERIOD FROM PERIOD FROM PERIOD FROM
1.1.2007 20.6.2006 20.6.2006
TO 30.6.2007 TO 30.6.2006 TO 31.12.2006
USD'000 USD'000 USD'000
(AUDITED)
Cash flows from operating activities
Profit / (Loss) before taxation 1,058 (5) 792
Adjustments for:
Amortisation and depreciation 453 - 334
Share options granted to directors - - 59
Excess of Group's interest in the net fair
value of acquiree's Identifiable assets,
liabilities and contingent liabilities over
cost - - (475)
Provision for profit rate on Murabahah Loan Notes 762 - -
Interest income (48) - (37)
Share of results of associate (489) - -
Unrealised gain on foreign exchange (71)
Profit / (Loss) before working capital changes 1,736 (5) 602
Changes in working capital:
(Increase) / Decrease in amount owing by (446) - 642
related parties
Decrease in other receivables 192 - 159
(Decrease) / Increase in trade and other payables (4,296) - 2,189
Decrease in amount owing by related parties 725 5 -
Cash (used in) / generated from operations (2,089) - 3,592
Net cash (used in) / generated from operating
activities (2,089) - 3,592
Cash flows used in investing activities
Acquisition of plant and equipment (1) - -
Acquisition of a subsidiary, net of cash acquired - - 629
Investment in associate (19,156) - (5,000)
Interest received 48 - 37
Net cash used in investing activities (19,109) (4,334)
Cash flows from financing activities
Proceeds from issuance of shares - - 7,942
Repayment to related parties - (911)
Proceeds from issuance of Murabahah Loan Notes 16,815 - -
Net cash generated from financing activities 16,815 - 7,031
Net (decrease) / increase in cash and cash
equivalents (4,383) - 6,289
Cash and cash equivalents at beginning period - -
6,323
Effect of foreign exchange rate changes on cash and
cash equivalents (4) - 34
Cash and cash equivalents at end of period (i) 1,936 - 6,323
This is the unaudited interim report on the consolidated results for the
financial period from1 January 2007 to 30 June 2007 announced by the Company in
compliance with AIM requirements.
The unaudited consolidated cash flow statement s should be read in conjunction
with the audited financial statements for the financial period ended 31 December
2006 and the accompanying explanatory notes attached to the interim financial
statements.
NOTES TO THE INTERIM FINANCIAL REPORT
1. Basis of Preparation
The interim financial statements are unaudited and have been presented in
accordance to International Financial Reporting Standards and the requirements
of AIM rules for the financial period from 1 January 2007 to 30 June 2007.
2. Qualification of Financial Statements
The auditor's report on the latest audited financial statements for the
financial period ended 31 December 2006 was not subject to any audit
qualification.
3. Accounting Convention
The financial statements are prepared under the historical cost convention and
on the going concern basis.
4. Basis of Consolidation
a. Subsidiaries
The consolidated financial statements include the financial statement of the
Company and its subsidiary as at the balance sheet date.
A subsidiary is defined as a company in which the Group has the power, directly
or indirectly, to exercise control over the financial and operating policies so
as to obtain benefits from its activities.
All subsidiaries are consolidated using the acquisition method of accounting.
Under the acquisition method of accounting, the results of subsidiaries acquired
or disposed of are included from the date of acquisition or up to the date of
disposal. At the date of acquisition, the fair values of the subsidiaries' net
assets are determined and these values are reflected in the consolidated
financial statements.
Intra-group transactions, balances and unrealized gains on transactions are
eliminated; unrealized losses are also eliminated unless cost cannot be
recovered. Where necessary, adjustments are made to the financial statements of
subsidiaries to ensure consistency of accounting policies with those of the
Group.
Minority interest is measured at the minorities' share of the fair values of the
identifiable assets and liabilities of the acquired.
4. Basis of Consolidation (Continued)
b. Associates
Associates are entities in which the Group has significant influence and that is
neither a subsidiary nor an interest in a joint venture. Significant influence
is the power to participate in the financial and operating policy decisions of
the investee but not in control or joint control over those policies.
Investments in associates are accounted for in the consolidated financial
statements using the equity method of accounting. Under the equity method, the
investment in associate is carried in the consolidated balance sheet at cost
adjusted for post-acquisition changes in the Group's share of net assets of the
associate. The Group's share of the net profit or loss of the associate is
recognised in the consolidated profit or loss. Where there has been a change
recognised directly in the equity of the associate, the Group recognises its
share of such changes. In applying the equity method, unrealised gains and
losses on transactions between the Group and the associate are eliminated to the
extent of the Group's interest in the associate. After application of the equity
method, the Group determines whether it is necessary to recognise any additional
impairment loss with respect to the Group's net investment in the associate. The
associate is equity accounted for from the date the Group obtains significant
influence until the date the Group ceases to have significant influence over the
associate.
Goodwill relating to an associate is included in the carrying amount of the
investment and is not amortised. Any excess of the Group's share of the net fair
value of the associate's identifiable assets, liabilities and contingent
liabilities over the cost of the investment is excluded from the carrying amount
of the investment and is instead included as income in the determination of the
Group's share of the associate's profit or loss in the period in which the
investment is acquired. When the Group's share of losses in an associate equals
or exceeds its interest in the associate, including any long-term interests
that, in substance, form part of the Group's net investment in the associates,
the Group does not recognise further losses, unless it has incurred obligations
or made payments on behalf of the associate. The most recent available audited
financial statements of the associates are used by the Group in applying the
equity method. Where the dates of the audited financial statements used are not
coterminous with those of the Group, the share of results is arrived at from the
last audited financial statements available and management financial statements
to the end of the accounting period. Uniform accounting polices are adopted for
like transactions and events in similar circumstances. In the Company's separate
financial statements, investments in associates are stated at cost less
impairment losses.
On disposal of such investments, the difference between net disposal proceeds
and their carrying amounts is included in profit or loss.
5. Earnings per share
Basic earnings per share is calculated by dividing the net profit for the period
by the weighted average number of ordinary shares in issue during the financial
period.
PERIOD FROM PERIOD FROM PERIOD FROM
1.7.2007 20.6.2006 20.6.2006
TO 30.6.2007 TO 30.6.2006 TO 31.12.2006
Net profit / (loss) for the period (USD'000) 572 (5) 608
Weighted average number of ordinary shares in
Issue 40,100,000 NA 27,050,000
Basic earnings per share (cent) 1.43 NA 2.25
6. Material Events during the Financial Period Ended 30 June 2007
Acquisition of 20% equity interest in Wisdom Choice Investments Ltd ("WCI")
On 22 January 2007, the Group announced that it had fulfilled all the conditions
precedent as per the Shares Sale Agreement entered between GMO and WCI on 29
September 2006 for the acquisition of 20% equity interest in WCI for a total
consideration of USD16.4 million and an option to acquire the remaining shares
of WCI for up to USD94.79 million. The purchase consideration for the 20% was
subsequently revised to USD23.8 million in view of the improved results achieved
by WCI for the two (2) financial periods of six months ended 31 December 2005
and 30 June 2006, as part of the conditions precedent of the said agreement. The
purchase consideration was satisfied using internally generated funds and the
issuance of Murabahah Loan Notes ("MLN"), arranged in accordance with Islamic
principles.
The subscribers of the MLN comprise, amongst others, Green Packet Berhad,
mTouche Technology Berhad, OSK Ventures International Berhad, Eugene Goh and
Wago Group Limited. The loan notes will be redeemed by GMO two years from the
date of issue and may be redeemed earlier at GMO's option.
On 30 March 2007, the Group announced that it will not be exercising the
Proposed Call Option to acquire the remaining 80% of the shares in WCI follows
statements dated 15 November 2006, 29 September 2006, 9 February 2007 and 22
January 2007 in relation to the proposed acquisition of a 20% equity interest in
WCI ("Proposed Acquisition")
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
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