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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Gmo | LSE:GMO | London | Ordinary Share | GB00B19Z0S04 | ORD NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.625 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
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 END FR IIFEDFFISLIT
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