A technology innovator delivering mobile, telecom and e-business software products and services. I have a holding in my growth portfolio (epic code: GBO).
Globo released their third quarter IMS today announcing that revenues for the first 9 months of the year grew by 46% to €73.2m and gross profit margin improved to 62% from 58% in the first half. Management stated that the margin improvement reflected the effect of direct sales compared to indirect channels.
The net cash position at 30 September 2014 was €36.3m, this compared to €46.0m at 30 June 2014 and €42.4m 31 Dec. 2013, but is after payment of US$12.0m (~€9m) for the acquisition of Sourcebits in July 2014. Management say they continued to generate free cash flow during the third quarter, but that is not evident from the numbers provided in the announcement, unless the associated costs of the acquisition and other investments were around €1m.
Management state that they are confident of meeting market expectations.
Sales growth is impressive, but many will still not be convinced by their ability to generate sufficient free cash flow commensurate with a business that is likely to turnover €100m this year.
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