Globo

SPECULATIVE BUY

19/01/2012 Ben Jaglom

Greece-based mobile technology specialist Globo (GBO) has issued a bullish trading update stressing continued international growth.

The AIM-quoted concern, which operates mostly in Eastern and Central Europe, declares that revenues in 2011 grew 46.4% to €45.25m (£37.8m), with pre-tax profits said to be 'slightly ahead of expectations'.

Globo enthuses that both CitronGO!, its cloud-based email service, and GO!Social, its service focused on businesses, are 'continuing to expand' their customer base. Operating cash flow reached €6.2m, and Globo draws attention to the £17.25m that it raised via a placing over the course of a year. Net cash stood at €800,000 at the end of the year.

Looking ahead, the group remarks that it is keen to focus on 'accelerated market penetration' of its products into Western Europe, the UK, the USA, Canada and Australia, adding that it expects to be able to 'substantially marginalise the impact of the current economic difficulties and market uncertainties within the Eurozone'.

Concerning its activities in Greece itself, Globo adds that it has 'embarked on a review of the options for divesting the Greek-related businesses'. The company remarks that it is 'actively considering opportunities to acquire international mobile software and services businesses'.

Analysts at Daniel Stewart are forecasting pre-tax profits of €11.5m (for earnings of 3.4 cents a share) on revenues of €45.3m for the year to December 2011. The broker sees 2012 profits of €17.7m (for earnings of 4.9 cents a share) on sales of €62m.

Recommended by Growth Company Investor at 12.75p in September 2010, Globo shares have since surged to 23p. Defying the wider gloom in the shattered Greek economy, Globo's strong international exposure and niche technology look set to benefit it further. We retain our speculative buy rating.