RNS Number:9821N
GMO Limited
14 February 2008



Press Release                                                   14 February 2008



                                  GMO Limited
                             ("GMO" or the "Group")

                      Unaudited preliminary final 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 preliminary final results, for the financial year ended 31st December
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 USD1.6 million *



* 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:

"Given the implementation of new and various regulations of the
telecommunications sector by the Ministry of Information Industry of China, GMO
will continue to focus on the fundamentals of its service offerings 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 remain cautiously
optimistic of the telecommunications sector in China and look forward to the
early roll-out of 3G in China. In addition, we will continue to allocate
resources in research and development of innovative mobile products and services
to tap the large China market."



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 8637 1540

jlewis@blueoarsecurities.co.uk

John Wakefield                                          Tel: +44 (0) 117 933 0020

jwakefield@blueoarsecurities.co.uk                      www.blueoarsecurities.co.uk


Chairman's Statement


Overview


The GMO Group was established to take advantage of opportunities in the wireless
value-added services ("WVAS") sector in China.  GMO was listed on the AIM market
of the London Stock Exchange in September 2006 and is seeking to become a
leading cellular communication and WVAS company in China.  Working closely with
the mobile network operators in China, GMO offers a variety of wireless
services, content and applications to mobile users in China.



For the financial year ended 31 December 2007, GMO achieved an EBITDA of USD1.6
million on the back of revenue of USD7.6 million.  The Company made a loss
before tax of USD 0.4 million, after taking into account financing costs
associated with the Murabahah Loan Notes of USD 1.64 million.



Wisdom Choice Investments Limited ("WCI")



On 22 January 2007, GMO completed the acquisition of a 20 per cent equity
interest in Wisdom Choice Investments Limited ("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.



This was financed in part by the issue of USD20.235 million Murabahah Loan Notes
arranged in accordance with Islamic principles.  The terms of the Murabahah Loan
Notes require them to be redeemed within two years of issue and profit payments
to be made on each annual anniversary of their issue.  The Company is currently
in discussion with the holders of the Murabahah Loan Notes with a view to
rescheduling the payment of profit payments and the redemption of the Murabahah
Loan Notes over a longer period.  A further announcement will be made in due
course regarding this.



GMO's share of WCI's profit after tax was USD0.4 million for the financial
period from 22 January 2007 to 31 December 2007.



Operational Review



The operating environment within the WVAS industry in 2007 has been very
difficult due to the implementation of various new regulations imposed by the
Ministry of Information Industry of China.  This has resulted in content
providers spending considerably less than before the regulations and also in
less advertising, which has had a resultant knock-on effect to the WVAS
industry.  As a result revenues for 2007 have be considerably lower that the
Company anticipated.. In addition, the adoption of 3G has been delayed in China.
 This was to be a significant factor to boost the already exponential growth of
the telecommunications sector in China.  GMO will continue to invest in research
and development to roll-out new products and services in anticipation of the 3G
rollout in China and the Company is well positioned to exploit opportunities in
this new market as it develops.




Current trading and prospects


GMO, like the wider WVAS industry in China, has experienced a very challenging
past year.  However, despite this challenging operating environment, GMO believe
that the regulatory environment in China will bed down and lead to further
opportunities.  In the meantime, GMO will continue to expand its range of
products and services to increase its revenue base and to improve its
profitability.


Tan Sri Datuk Dr. Omar A. Rahman

Chairman

14 February 2008


CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)

                                                                     YEAR             PERIOD FROM
                                                                    ENDED               20.6.2006
                                                               31.12.2007           TO 31.12.2006
                                                                  USD'000                 USD'000
                                              Note                                      (AUDITED)

Revenue                                                              7,617                  2,888

Cost of sales                                                      (5,012)                (1,918)

Gross Profit                                                                                  970
                                                                    2,605
Administrative expenses                                                                     (427)
                                                                   (1,015)

EBITDA*                                                              1,590                    543
                                                                     
Other income                                                           139                    583

                                                                       
Finance cost                                                       (1,639)                      -

                                                                   
Amortisation and depreciation                                        (907)                  (334)

(Loss) / Profit from operations                                                               792
                                                                     (817)
Share of profit after tax of associate                                 373                      -

(Loss) / Profit before taxation                                      (444)                    792
                                                                     
Taxation                                                                 -                      -

(Loss) / Profit after taxation                                       (444)                    792
                                                                     
Minority interest                                                    (487)                  (184)

(Loss) / Profit for the year / period                                (931)
                                                                                              608
(Loss) / Earnings per share attributable
to equity holders of the parent

- Basic (cent)                                    5                    (2)                      2

- Diluted (cent)                                                        NA                     NA



*EBITDA - denotes "Earnings Before Interest, Taxation, Depreciation and
 Amortisation."

This is the unaudited final report on the consolidated results for the financial
year ended 31 December 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 financial statements.



CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

                                                                                AT                     AT
                                                                        31.12.2007             31.12.2006
                                                                           USD'000                USD'000
                                                                                                (AUDITED)
Non - current assets

       Plant and equipment                                                       1                       -
                                                                                                       
       Intellectual property                                                11,737                  12,643
       Investment in associate                                              24,560                       -

                                                                            36,298                  12,643
Current assets

       Trade receivables                                                        47                   1,384
       Other receivables, deposits and prepayments                              34                   5,214
       Cash and bank balances                                                1,561                   6,323

                                                                             1,642                  12,921

Total Assets                                                                37,940                  25,564

Equity and Liabilities

       Equity attributable to equity holders of the
       parent
       Share capital                                                         7,542                   7,542
       Share premium                                                         9,810                   9,810
       Other reserve                                                           253                     161
       Exchange fluctuation reserve                                             22                      72
       (Accumulated losses) / Retained profits                               (323)                     608

                                                                            17,304                  18,193
       Minority Interest                                                     1,710                   1,207
       Total Equity                                                         19,014                  19,400

Current liabilities

       Trade payables                                                            -                    1,851
                                                                               
       Accruals                                                                167                     178

       Provision for taxation                                                  125                     116

       Provision                                                                 -                   2,300
                                                                           
       Murabahah Loan Notes                               6                  1,739                       -
                                                                                                     
       Amount owing to related parties                                         180                   1,719

                                                                             2,211                   6,164

Non-current liabilities

       Murabahah Loan Notes                                                 16,715                       - 
                                                                                                      
       Total Liabilities                                                    18,926                   6,164

       Total Equity and Liabilities                                         37,940                  25,564

Net assets per share attributable to ordinary equity
 holders of the parent (cent)                                                   47                      48



This is the unaudited final report on the consolidated balance sheets for the
financial year ended 31 December 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 financial statements.


CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (UNAUDITED)

                                                                            YEAR          PERIOD FROM
                                                                           ENDED               20.6.2006
                                                                  31.12.2007          TO 31.12.2006
                                                                   USD'000               USD'000
                                                                                        (AUDITED)
Cash flows (for) / from operating activities

  (Loss) / Profit before taxation                                          (444)                  792

  Adjustments for:

  Amortisation and depreciation                                              907                  334
  Share options granted to directors                                          92                   59
  Provision for profit rate on Murabahah Loan Notes                        1,639                    -
                                                                                                
                                                                               
                                                                            
  Excess of Group's interest in the net fair value of
   Acquiree's identifiable assets, liabilities and
   contingent liabilities over cost                                            -                (475)

  Interest income                                                           (64)                 (37)
                                                                            
  Unrealised gain on foreign exchange
                                                                            (74)                 (71)

  Share of results of associate                                            (373)                    -
                                                                                                  
  Profit before working capital changes                                    1,683                  602

  Changes in working capital:

    Decrease in trade receivables                                          1,337                  642
        Decrease in other receivables                                        180                  159
        (Decrease) / Increase in trade and other payables                (4,155)                2,189
  Cash (for) / from operations                                             (955)                3,592

  Net cash (for) / from operating activities                               (955)                3,592

Cash flows for investing activities
  Acquisition of a subsidiary, net of cash acquired                            -                  629
                                                                             
  Acquisition of plant and equipment                                         (1)                  -
                                                                             
  Investment in associate                                               (19,188)              (5,000)
  Interest received                                                           64                   37
  Net cash for investing activities                                     (19,125)              (4,334)

Cash flows from financing activities
  Proceeds from issuance of shares                                             -                7,942
                                                                             
  Repayment to related parties                                           (1,539)                (911)
  Proceeds from issuance of Murabahah Loan Notes                          16,815                    - 
                                                                                                 
  Net cash from financing activities                                      15,276                7,031

Net (decrease)  / increase in cash and cash                              (4,804)                6,289
equivalents

Cash and cash equivalents at the beginning of the year /                   6,323                    - 
period                                                                                             
                                                                              

Effect of foreign exchange rate changes                                       42                   34
on cash and cash equivalents

Cash and cash equivalents at end of year / period                          1,561                6,323


This is the unaudited final report on the consolidated cash flow statements for
the financial year ended 31 December 2007 announced by the Company in compliance
with AIM requirements.

The unaudited consolidated cash flow statements 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 financial
statements.


NOTES TO THE INTERIM FINANCIAL REPORT



1.         Basis of Preparation



The preliminary final financial statements are unaudited and have been presented
in accordance to International Financial Reporting Standards and the
requirements of AIM rules for the financial year ended 31 December 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.         (Loss) / Earnings per share



Basic (loss) / earnings per share is calculated by dividing the net (loss) /
profit for the year / period by the weighted average number of ordinary shares
in issue during the financial year / period.


                                                                                              PERIOD FROM
                                                                                                20.6.2006
                                                                                  YEAR      TO 31.12.2006
                                                                                 ENDED           (AUDITED)
                                                                            31.12.2007

Net (loss) / profit for the year / period (USD'000)                               (931)               608

                                                                                  
Weighted average number of ordinary shares in
Issue                                                                        40,100,000        27,050,000

(Loss) / Earnings per share (cent)                                                  (2)                 2


6.         Murabahah Loan Notes



The Company is currently in talks with the Murabahah Loan Notes holders for a
partial repayment and an extension of the Murabahah Loan Notes payable.



7.         Material Events during the Financial Year Ended 31 December 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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