GO plc announced its financial results for the year ended 31 December 2009. Whilst the number of customer connections and services increased significantly in 2009 and amounted to just under 480,000, the Group reported a decline in revenues and profitability.

In 2009, the Group has recorded a loss before taxation amounting to €3.2 million (2008: Profit €0.3 million). This represents a negative return of 1.8% (2008: positive 0.15%) of the average shareholders’ funds and a negative total assets employed of 1.03% (2008: positive 0.09%). Earnings per share for the year amounted to a negative €0.067 (2008: negative €0.02).

In 2009, the Group registered an operating profit of €7.4 million as against €13.3 million in 2008. However, both 2009 and 2008 results include various one time charges for voluntary retirement costs of €11.5 million (2008: €2 million), write back of provision for pensions of €0.3 million (2008: charge of €12.9 million), impairment loss on receivables of €3.1 million (2008: €0.3 million) and release of financial liabilities of €3.2million (2008: €0.2 million).

Normalised operating profit for 2009 amounted to €18.6 million as against €28.3 million in 2008. The Group achieved a normalised EBITDA of €42.6 million representing an EBITDA margin of 34.4%. Comparative figures show normalised EBITDA of €52.2 million and margin of 40.3%. This decline in performance is primarily the result of lower revenue. In fact, Group turnover amounted to €123.7 million, a decline of 4.5% over 2008. Group revenues have also been impacted, positively, by the results of the BM Group in which the Company acquired a 60% strategic shareholding in April.

The 2009 results have been negatively affected by the Group’s share of the results of Forthnet. It is encouraging to note that Forthnet continues to register growth in its client base, revenue streams and EBITDA levels and GO is confident that in the medium term this investment will start to make a positive contribution to the results of GO.

The Board of Directors is recommending the payment of a final dividend of €0.10c net of tax per share for the approval of the shareholders at the next Annual General Meeting to be held on 17 May 2010 which dividend will be payable on 21 May 2010. This net dividend will be payable to shareholders who will be on the register of shareholders as at 16 April 2010.

Commenting about these results, GO plc Chairman Deepak Padmanabhan said, “2009 has been a challenging year as demand for the Group’s services has been impacted by the international economic climate, increased competitive environment and the impact of regulation of certain tariffs.”

He added, “Demand for the various core services remains strong and the Group continues to manage the decline of traditional fixed-line voice services by maximizing on the growth opportunities of broadband and TV services. Revenue from mobile services experienced a decline due to a combination of increased competition and weaker demand due to the economic environment.”

Mr Padmanabhan said in 2009, the Group managed to grow its broadband, TV and mobile client base and register only a marginal decline in its fixed-line voice connections. At year end, the Group serviced nearly 480,000 customer connections, an increase of almost 22,000 over 2008. This achievement auger well for the future, he commented.

GO’s Chief Executive Officer David Kay said the Group’s cost base remained stable with most discretionary expenditure in decline. Cost increases were primarily the result of either these being directly related to the operations of the BM Group or to revenue growth areas such as TV.

He added that in 2009, GO pursued a right-sizing programme at a cost of €11.5 million which when compared to December 2008 lead to a reduction of almost 300 employees who left in 2009 or in the process of leaving as at year end: “This right-sizing programme is part of a larger initiative to restructure the way the Group operates to ensure it can serve its clients better and in a more cost effective manner. This reduced headcount level will deliver a significantly lower cost base in the coming years.”

Mr Kay said, “2009 was another important year during which we continued our programme of transformation to maintain our leadership in the local telecoms market. We have initiated several investments in our networks to ensure that provision of leading edge services is maintained and the customer benefits from better and improved services. These include the upgrading of broadband speeds in the last mile towards the customers’ premises, and the launch of 7.2MBps speeds on mobile internet. We continue to lead the market in terms of the value we offer and the customer experience we provide to our customers.”

During 2010, Mr Kay added, GO will continue to defend and grow its market shares on all its services and ensure profitability across all services: “We want to retain our strong position in fixed voice market, and we aim to become market leader in internet. On the mobile front, we want to ensure that we maintain revenues from pre-paid mobile and further grow post-paid and data. We are confident that we can achieve significant growth in TV, mainly as a result of the acquisition of the English Premier League and Italian Serie A football rights. The bundling of services under our Home Pack and Business Pack brands as well as cross and up-selling of services are key to grow our revenues. At the same time, we need to continue offering innovative products and services. On the business side, we want to continue strengthening our corporate business segment.”

During the year Forgendo Limited increased its shareholding in Forthnet SA from 34.6% in 2008 to 37.1%. Forgendo is the single largest shareholder in Forthnet. The Company holds 50% of the share capital of Forgendo, whilst the Company’s immediate parent holds the other 50%. During the year the Company also acquired a 60% shareholding in the BM Group which is a major data centre operation in Malta. These investments will provide growth and synergies in the coming years.

Receivables, net of impairment loss, amounted to €46.6 million (2008: €51.9 million). Of these, 47.6% (2008: 51%) represent invoiced amounts receivable in respect of services rendered and goods sold by the Group indicating that whilst the challenging economic environment impacted its revenues, the group did not experience any significant deterioration in its collection process. The Group’s trade and other payables at the end of the year amounted to €43.6 million (2008: €53.2 million).

During the year the Group completed the restructuring of its banking facilities ensuring adequate financial support for the coming years and at year end non-current and current bank loans amounted to €72 million (2008: €50 million). The gearing ratio, that is, the ratio of loan finance to shareholders’ equity stood at 41.5% at 31 December 2009 compared with 25.9% at 31 December 2008.

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