Forgendo, the joint vehicle between Go plc and its majority shareholder Emirates International Telecommunications (Malta), is aiming for majority control in Greek telecoms company Forthnet and will continue to build on its current 40.99 per cent stake when share prices are “right”, Go chief executive David Kay told The Times Business. Forgendo dented Go’s financial results for the year ended December 31, 2010, by €28.3 million as Forthnet continued to brave Greece’s current economic environment. Go registered a €9.1 million pre-tax loss in 2010, almost three times the €3.2 million loss of the previous year, despite tripling its operating profit to €22.8 million and customer connections hitting a record 515,000.
Mr Kay emphasised the results had to be seen in the context of one-off charges in 2009 and the true perspective of Forgendo’s financial relation to Go. He also refuted suggestions Go had money to spend in Greece but not in its home market as he outlined the progress in the company’s €100 million, six-year investment in its infrastructure.
“We believe in the investment case and we believe we will see a return.
“There is a premium associated with majority control and we would like to arrive at majority control at the right price. But it cannot be said that investment in Forthnet is taken away from Go,” he said.
Go – which has just won World Finance’s prestigious Best Corporate Governance in Malta 2010 award – was also in business in a highly competitive market.
Mr Kay admits the “substantial” investment made in acquiring the English and Italian football rights had exceeded expectations at the end of the last year but the total numbers had missed the original targets set at the time of the bid.
The chief executive said the board’s recommendation to halve shareholders’ dividend stemmed from its policy for prudence and its careful examination of the business’ current situation.
He stressed Go’s shareholders – now numbering more than 10,000 – were an important constituent of the company. In weighing its options, the board had to consider the company’s future, its financiers, and its investment programme.
Year Two of Go’s investment programme could see an outlay of more than €20 million and substantial amounts will continue to be directed at the mobile network. After September Go will be able to unveil what Mr Kay described as the best network in the country by a long stretch, boasting 4G capabilities.
Mr Kay said IPTV, meanwhile, should be ready for roll-out in the summer.