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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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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 | |
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0.00 | 0.00% | 0.625 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:0793M GMO Limited 15 November 2006 Press Release 15 November 2006 GMO Limited ("GMO" or the "Group") Update on the proposed acquisition of 20% equity interest in Wisdom Choice Investments Ltd. ("WCI") GMO Limited (AiM:GMO), a leading provider of wireless value-added services in China, is pleased to announce the following update on the Group's proposed acquisition, as announced on 29 September 2006, of a 20% equity interest in WCI ("Proposed Acquisition"). WCI is the exclusive service and technology provider of ColorComm Software Technology Group ("ColorComm Group"). The Proposed Acquisition is conditional upon, inter alia, WCI having achieved an aggregate EBITDA of at least US$8.2 million in respect of the two financial periods of six months ended 31 December 2005 and 30 June 2006. Highlights * WCI achieved audited EBITDA of US$11.9 million in respect of the two financial periods of six months ended 31 December 2005 and 30 June 2006. * Revised purchase consideration of US$23.6 million, reflecting the better than expected performance achieved by WCI during the period. * Acquisition of initial 20% equity interest in WCI to be partly funded through the issue of 5 million New Ordinary Shares in GMO. * Option to acquire the remaining shares in WCI for a consideration of up to US$94.79 remains unchanged. Commenting on the announcement, Eugene Goh, Chief Executive of GMO, said: "These audited results for WCI demonstrate the business is continuing to grow strongly. This better than expected performance is reflected in the increased consideration that GMO will pay for the initial 20% equity interest in WCI. "The combination of WCI and GMO will create one of the largest interactive media and mobile messaging companies in China. We look to the future with confidence." For further information: GMO Limited Eugene Goh, Chief Executive Officer Tel: +65 969 000 99 eugene@gmoglobal.com www.gmoglobal.com Corporate Synergy Plc John Wakefield / Mike Coe, Corporate Finance Tel: +44 (0) 117 933 0020 Jwakefield@corporatesynergy.co.uk www.corporatesynergy.co.uk Media enquiries: Abchurch Henry Harrison-Topham / Chris Lane Tel: +44 (0) 20 7398 7700 henry.ht@abchurch-group.com www.abchurch-group.com GMO is pleased to announce the results of WCI, on a pro forma basis, for the two financial periods of six months ended 31 December 2005 and 30 June 2006. WCI'S 12 MONTHS ENDED 30 JUNE 2006 FINANCIAL RESULTS (PRO FORMA) WCI Results Highlights(1) (on the basis of IFRS): WCI pro forma results RmB ('000) 6 months to 6 months to 12 months to 31 Dec 2005 30 Jun 2006 30 Jun 2006 Revenue 78,420 117,399 195,819 EBITDA(2) 39,081 56,068 95,149 Operating income 38,647 55,545 94,192 Net income 35,506 51,366 86,872 WCI pro forma results US$(3) ('000) 6 months to 6 months to 12 months to 31 Dec 2005 30 Jun 2006 30 Jun 2006 Revenue 9,802 14,675 24,477 EBITDA(2) 4,885 7,008 11,893 Operating income 4,831 6,943 11,774 Net income 4,438 6,421 10,859 Note 1) Details of the WCI pro forma financial results are shown in Appendix I 2) EBITDA comprises operating income plus depreciation and amortization 3) RmB has been translated into US$ at an average exchange rate of RmB 8.00 to US$ 1.00 The pro forma information reflects WCI's ability to enjoy the entire economic benefits of ColorComm Group plus certain pro forma adjustments as if the transfer of the economic benefits had taken place at the beginning of the period presented. WCI has achieved an aggregate EBITDA of US$11.9 million over the two financial periods. The results for the two financial periods have been audited by KPMG Huazhen, China. REVISED PURCHASE CONSIDERATION Pursuant to the Share Sale Agreement entered into on 29 September 2006, as a result of the better than expected aggregate EBITDA achieved by ColorComm over the two financial periods, the purchase consideration for the Proposed Acquisition has been revised to approximately US$23.8 million cash from the initial indicated US$16.4 million cash. GMO has paid an initial US$5.0 million deposit which will be utilised as part payment towards the purchase consideration. The remaining US$18.8 million in respect of the purchase consideration is payable before 31 December 2006, subject to the fulfillment of all the conditions precedent of the Share Sale Agreement. As previously announced, the Company has been granted an option to acquire the remaining shares in Wisdom Choice for a consideration of up to US$94.79 million, to be satisfied in cash or by the issue of new ordinary shares in GMO. The exercise period expires on 15 February 2007 and payment on exercise is dependent on Wisdom Choice having achieved an audited EBITDA of US$9.5m for the year ending 31 December 2006. SOURCE OF FUNDS It is intended that the US$18.8 million in respect of the Proposed Acquisition shall be funded partly through the issue of 5.0 million new GMO shares with the balance through debt financing. ESTIMATED TIME FRAME FOR COMPLETION GMO is in the final stages of completing its due diligence in respect of the Proposed Acquisition. The Proposed Acquisition is envisaged to complete by December 2006. FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION Based on GMO's pro forma interim results for the six months ended 30 June 2006 as announced on 29 September 2006 and WCI's pro forma financial results for six months ended 30 June 2006 as highlighted above, the pro forma financial effects of the Proposed Acquisition on GMO are illustrated below. Financial Effects Highlights: GMO pro forma results As at After acquisition 30 Jun 2006 of 20% equity (announced) in WCI Earnings per share 1.51 pence 2.60 pence attributable to ordinary equity holders Net assets per share 17.6 pence 38.5 pence attributable to ordinary equity holders Note 1) Details of the GMO pro forma financial effects after the Proposed Acquisition are shown in Appendix II 2) RmB has been translated into US$ at an average exchange rate of RmB 8.00 to US$ 1.00 3) US$ has been translated into # at an average exchange rate of US$ 1.00 to # 0.56 The pro forma information reflects the combined business plus certain pro forma adjustments, including the public issue pursuant to the listing of GMO, as if the Proposed Acquisition had taken place at the beginning of the period presented. APPENDIX I - WCI PRO FORMA FINANCIAL RESULTS FOR THE TWO FINANCIAL PERIODS OF SIX MONTHS ENDED 31 DECEMBER 2005 AND 30 JUNE 2006 1) WCI pro forma consolidated income statement In US$ 6 months to 6 months to 12 months to 31 Dec 2005 30 Jun 2006 30 Jun 2006 Revenue 9,802,556 14,674,816 24,477,373 Business tax and surcharge (302,942) (424,218) (727,160) Net revenue 9,499,614 14,250,599 23,750,213 Advertisement costs (4,217,136) (6,701,161) (10,918,298) Gross profit 5,282,478 7,549,437 12,831,915 Admin (397,339) (540,996) (938,335) EBITDA 4,885,139 7,008,442 11,893,581 Depreciation and amortisation (54,260) (65,372) (119,632) Operating income 4,830,879 6,943,070 11,773,949 Interest income 11,024 14,586 25,610 Profit before taxation 4,841,903 6,957,656 11,799,559 Taxation (403,594) (536,879) (940,472) Profit after taxation 4,438,310 6,420,777 10,859,087 Note 1) RmB has been translated into US$ at an average exchange rate of RmB 8.00 to US$ 1.00. 2) The information provided assumes that WCI has been able to enjoy the economic benefits of ColorComm Group since the beginning of the period presented. 2) WCI pro forma consolidated balance sheet In US$ As at As at 31 Dec 2006 30 Jun 2006 Non-current assets Property, plant and equipment 291,376 332,123 Intangible assets 7,500 13,125 Interest in subsidiary 47,546 61,746 Interest in an associates 537,500 537,500 883,922 944,494 Current assets Trade receivables 2,486,480 4,171,941 Other receivables 490,981 225,020 Amount owing by shareholders 1,434,793 693,000 Cash and cash equivalents 4,138,307 4,578,106 8,550,561 9,668,067 Current liabilities Trade payables 73,880 71,595 Other payables 201,340 127,136 Salary and welfare payables 80,333 50,698 Income tax payable 459,909 543,334 815,462 792,763 Net current assets 7,735,099 8,875,304 Total assets less current liabilities 8,619,021 9,819,798 Equity attributable to shareholders Paid in capital 1,687,500 1,765,000 Reserves 890,996 890,996 Retained earnings 6,040,525 7,163,802 8,619,021 9,819,798 3) WCI pro forma consolidated cash flows statement In US$ 6 months to 6 months to 12 months to 31 Dec 2005 30 Jun 2006 30 Jun 2006 Profit before taxation 4,925,487 7,092,159 12,017,646 Adjustment: - Share of profit from associates (96,560) (147,139) (243,699) costs from subsidiary 12,977 12,635 25,612 Profit before taxation 4,841,903 6,957,656 11,799,559 Amortisation 625 6,875 7,500 Depreciation 38,841 45,560 84,400 Interest income (13,876) (16,595) (30,470) 4,867,493 6,993,495 11,860,989 Increase in trade and other receivables (20,280) (1,418,473) (1,438,752) Decrease in salary and welfare payables (50,138) (9,170) (59,308) Decrease in trade and other payables 112,480 (35,560) 76,920 4,909,556 5,530,293 10,439,849 Income tax paid (49,063) (454,390) (503,452) Net cash flow from operating activities 4,860,493 5,075,903 9,936,397 Acquisition of property, plant & (22,380) (84,492) (106,872) equipment Acquisition of intangible assets - (12,500) (12,500) Interest received 13,876 16,595 30,470 Repayment from shareholders (764,343) 741,793 (22,550) Investment in associate and subsidiary (551,700) (551,700) Net cash flow from financing activities (1,324,547) 661,396 (663,151) Dividend paid to shareholders (478,903) (5,297,500) (5,776,403) Net increase 3,057,043 439,799 3,496,842 Cash and bank balances at beginning 1,081,264 4,138,307 1,081,264 - - - Cash and bank balances at end 4,138,307 4,578,106 4,578,106 APPENDIX II - GMO PRO FORMA FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006 ADJUSTED FOR THE PROPOSED ACQUISITION 1) GMO's pro forma consolidated income statement In # 6 months to After acquisition 30 Jun 2006 of 20% equity (announced) in WCI Revenue 905,918 905,918 Cost of sales (5,625) (5,625) Gross Profit 900,293 900,293 Administrative expenses (3,571) (3,571) Share of EBITDA of the associate - 777,977 EBITDA 896,722 1,674,699 Share of interest income of the associate - 1,634 Depreciation and amortisation (253,332) (253,332) Profit before taxation 643,390 1,423,001 Share of taxation of the associate - (60,226) Profit after taxation 643,390 1,362,775 Minority interest (191,570) (191,570) Profit for the period 451,820 1,171,205 Earnings per share attributable to 1.51 pence 2.60 pence ordinary equity holders Note 1) RmB has been translated into US$ at an average exchange rate of RmB 8.00 to US$ 1.00. 2) US$ has been translated into # at an average exchange rate of US$ 1.00 to # 0.56. 3) The information provided assumes that the Proposed Acquisition of WCI occurred at the beginning of the period presented. WCI is included on a pro forma basis assuming that WCI has been able to enjoy the economic benefits of ColorComm Group since the beginning of the period presented. 2) GMO's pro forma consolidated balance sheet In # As at After After acquisition of 20% equity 30 Jun 2006 Public in WCI (announced) Issue Non - current assets Intellectual property 7,083,855 7,083,855 7,083,855 Interest in an associate - - 14,040,385 7,083,855 7,083,855 21,124,240 Current assets Trade and other receivables 1,056,848 1,056,848 1,056,848 Cash and bank balances 360,968 4,160,968 360,968 1,417,816 5,217,816 1,417,816 Current liabilities Accruals 108 108 108 Amount owing to related parties 173,344 173,344 173,344 Provision 2,488,094 2,488,094 2,488,094 2,661,546 2,661,546 2,661,546 Net current liabilities (1,243,730) 2,556,270 (1,243,730) 5,840,125 9,640,125 19,880,510 Financed by: Capital and reserves Equity attributable to equity holders of the parent Share capital 3,000,000 4,000,000 4,500,000 Share premium 1,256,056 4,056,056 11,056,056 Foreign exchange reserve (241,082) (241,082) (241,082) Retained profits 1,276,075 1,276,075 1,995,460 5,291,049 9,091,049 17,310,434 Minority Interest 549,076 549,076 549,076 Total equity 5,840,125 9,640,125 17,859,510 Non-current liability Bank borrowings - - 2,021,000 5,840,125 9,640,125 19,880,510 Net assets per share attributable to 17.6 pence 22.7 pence 38.5 pence ordinary equity holders Note GMO's balance sheet has been adjusted to show the effect of the Placing of 10m new Ordinary shares on Admission to AIM on 6 September 2006. 3) GMO's pro forma consolidated cash flows statement In # As at After After acquisition of 20% equity 30 Jun 2006 Public in WCI (announced) Issue Cash flows from operating activities Profit before taxation 643,390 643,390 1,423,001 Adjustments for non-cash item: Amortisation of intellectual property 253,332 253,332 253,332 Other non-cash items (13,326) (13,326) (13,326) Share of results of associate - - (779,611) Profit before working capital changes 883,396 883,396 883,396 Changes in working capital: Increase in trade and other (1,056,848) (1,056,848) (1,056,848) receivables Increase in accruals 108 108 108 Increase in amount owing by related 173,344 173,344 173,344 parties Net cash generated from operating - - - activities Cash flows from investing activities Acquisition of subsidiary 360,968 360,968 360,968 Investment in associate - - (13,321,000) Net cash generated from in investing 360,968 360,968 (12,960,032) activities Cash flows from financing activity Proceeds from issuance of shares - 3,800,000 11,300,000 Drawdown of bank loan - - 2,021,000 Net cash used in financing activity - 3,800,000 13,321,000 Net decrease in cash and cash 360,968 4,160,968 360,968 equivalents Cash and cash equivalents at 1 January - - - Cash and cash equivalents at end of 360,968 4,160,968 360,968 period - Ends - This information is provided by RNS The company news service from the London Stock Exchange END MSCAKQKPABDDNDD
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