Back to Globo and Matt Earl – are the accounts all Greek to you?

Comments

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   Johan Cruft

   21 July 2014, 16:18

   I would say the arguments around Globo fall into 2 Catagories. Fristly there are those people who like to study the ins and outs of every digit on a companys accounts, to form their investment decisions. And Secondly there are those people that are seduced by the actual product that the company is producing. The concept of the product being a huge success in the future. Maybe the accounts of Globo and GT do make the first group of people raise the eyebrows and hence thay are bearish. On the other hand the second group of investors they like the products such as Go Enterprise! and they like the development of the company by it’s move into the USA, and they like the nice things that Gartner have said about the products. Mobility is a very fast moving market, perhaps the fastest out there today, so Globo even now in 2014 is quite a different animal to what it was in 2012 or even 2013. Therefore if the products that Globo have now do become big winners in the Mobility market, then the accounts of 2012 probably are an irrelevance. As an investor you just have to choose if you want to back the products or if you want to study the accounts from one or two years ago. Everyone can make their choice.

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   Johan Cruft

   21 July 2014, 20:13

   On the Globo web site a person has the opportunity to connect and chat to a employee who is there to answer questions. I have just done that and although the conversation was very brief, I copy it here for anybody else’s interest.
   Chad :Welcome to Globo, how can I help you today?

   Johan:Please can you tell me the date of the next trading update?

   Chad :Johan, actually I am not current with that information. I can direct your question to your Investor Relations department for further inquiry.

   Johan:OK

   Chad :I will most likely not have an answer for you today, but will hope to have it as quickly as possible for you.

   Johan:OK

   Chad :Is there anything else I can help you with today?

   Johan:hAVE YOU PERSONALLY MET THE CEO?

   Chad :Yes sir I have.

   Johan:He appears to have a very clear vision of where he wants to go with GLOBO

   Johan :Yes he does. It has been a great joy working for this organization.

   Johan:Great news, would you say that there is a bigger buzz amongst your colleagues now, more than ever before?

   Chad :Absolutely. Things are very exciting right now in this market.

   Johan:OK, Good luck to you and all your colleagues. Thanks for being so kind.

   Good Bye for now.

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   wildrides

   21 July 2014, 22:30

   Try asking open questions next time instead of giving him the answer you would like to have come back to you framed in the question .

   Fleece a moron a day, it helps you work rest and play .
   And putting ya loot in this turkey makes it a certainty.

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   mjnandrew

   22 July 2014, 08:07

   Great article Matt. I.m now paranoid about any of my companies’ associates. Seems to me there.s massive latitude under the rules to make something out of nothing.

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   craig macfarlane

   22 July 2014, 09:31

   Someone else has done some analysis. Yiur thoughts please dark destroyer….

   During the past days, I read all the analysis and the s..t that certain “analysts” have thrown to all Globo’s investors and the company.

   I picked up the phone and asked a friend (who happens to be a Big 4 – IFRS Auditor) to look at the questions raised.

   Guess what. They are all WRONG !

   Here it is:

   1) GLOBO PLC has consolidated €12.1 million sales from GT up to 3 Dec 2012 (
   htTP://www.globoplc.com/inst/globo/gallery/DC/Reports_Accounts_and_Public_Documents/2012_Annual_Report.pdf
   - page 18)
   “For the period until 3 December 2012, being the date the Group divested 51 per cent of its Greek subsidiary, Globo Technologies S.A. recorded revenue of €12.1 million via several projects, principally from private sector clients.”

   This figure is also reconciled on the revenue analysis provided in page 86.

   So this says, that out of the total 2012 GT’s revenue, €12.1 million of sales have been consolidated in the Group’s revenues. This revenue is related to external customers of the Group.

   As Globo reports on their segment information (
   htTP://www.globoplc.com/inst/globo/gallery/DC/Reports_Accounts_and_Public_Documents/2012_Annual_Report.pdf
   - page 73) the discontinued operations from Third Party goods and Software products and services add to a total (€1.989K + €10,060K = 12,049K) So once again the consolidated figure of €12.1 million is verified.

   I am sure that GT had additional revenues related to the Group companies (very normal) which are eliminated from the Group numbers during consolidation. Having a closer look only at the discontinued operations the intersegment revenue of GT (just for these two discontinued lines of business – page 73) are €2.4million.

   So the 2012 to 2013 GT’s reported drop of sales is not factual for its business but as a result of the divestment transaction. There are possibly several additional explanations of at least €11.1 million of worth. See also my comment No 4.

   2) GLOBO PLC divested GT with €7 million in cash and €7.3 million in Debt. (
   htTP://www.globoplc.com/inst/globo/gallery/DC/Reports_Accounts_and_Public_Documents/2012_Annual_Report.pdf
   - page 85 – 86)
   So Globo PLC did not give away the cash. It effectively repaid even more debt, so the net cash benefit for the Group is €0.3 million

   3) GLOBO PLC got rid of finance leases that followed GT. (
   htTP://www.globoplc.com/inst/globo/gallery/DC/Reports_Accounts_and_Public_Documents/2012_Annual_Report.pdf
   - page 88)
   This seems to be additional benefit for the Group of €2.5million

   4) During 2012, GT reduced their debt to the Group by 18.2 million (
   htTP://www.globoplc.com/inst/globo/gallery/DC/Reports_Accounts_and_Public_Documents/2012_Annual_Report.pdf
   - page 113)
   It seems that GT had recorded a big value of the assets of the Group on its balance sheet, which due to the disposal, needed to be “transferred” to the Group. In exchange the money owed to the group reduced by €18.2 million at the end of 2012.

   It seems like a totally normal move.

   This potentially explains the additional revenue recorded by GT during 2012 as of the sale of these assets back to the Group (as they must relate with the ongoing group operations).

   Studying GT’s 2013 annual report (
   hxxp://www.globogr.com/inst/globoae/gallery/oikonomikesKatastaseis/GloboTechnologies_Oikonomikes_katast_2013_final.pdf
   – page 10) GT’s stated revenue for 2013 and 2012 fell by €10.5 million

   BUT, after studying GT 2012 (previous year) annual report
   (
   htTP://www.globogr.com/inst/globoae/gallery/oikonomikesKatastaseis/Οικονομικές%20Καταστάσεις_GloboTechnologies%202012-FINAL.pdf
   – Page 11) it seems like during 2012 it had disposed €11.1 million of intangibles.

   This perfectly explains the loss of that revenue from 2012 to 2013.

   Why?

   Simply because during 2012 GT disposed these assets to Globo Plc for 11.1 million (or so) and at the same time

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   Johan Cruft

   22 July 2014, 14:01

   There are some things aabout the stock market that are a complete puzzle to me. For example so much is written about one Greek Tech Outfit (ie Globo) but hardly nothing is written about another (ie InternetQ). It’s almost like InternetQ does not exist. Everyone knows the name of Globo’s CEO but I bet few can remember the name of InternetQ’s CEO. It’s almost incredible that here we are today with InternetQ’s share price at such low levels, that nobody ever talks about this as a stock that has been shorted, nobody enters into a discussion. Is InterrnetQ such a boring stock. Sometimes it’s the boring unmentioned stocks that turn into the highest flyers. Very puzzling situation. Surely InternetQ merits the same attention as Globo. However today the volume for InternetQ is 4 times it’s average daily volume so far at 2pm. Maybe someone is noticing after all……or maybe not.

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   wildrides

   22 July 2014, 14:54

   Internet who ?

   I would imagine you happen to be a holder !