MSE | Wednesday, 25 March 2009

GlobalCapital Financial Management Ltd - Malta Stock Exchange Review

Lack of activity and turnover in the local market

Yesterday, on the Exchange floor trading was not exactly vibrant as activity was spread among four of the listed equities. The Malta Stock Exchange index moved to a lower ground by 0.06% or 1.71 points to close the second session of the week at 2707.32 points.
The sole gainer of the day was Lombard Bank Malta p.l.c. The share price edged forward €1c0 to settle at the €2.53 level. The volume amounted to 1,500 shares. These shares were swapped in two trades and carried a market value of €3,795. The shares of GlobalCapital p.l.c. are currently trading at €1.991.
On the loser’s front, GO p.l.c. commenced the session on a positive note as the shares price started to increase steadily. However, the share price finished on the back foot by €1c7 at €1.48. The price shifted in a very tight range of €1.48 to €1.50. At the end of trading, bids for 1,633 shares stood at €1.48, whereas the best offer for 1,700 shares stood at €1.49. On Friday 20th March the Board of Directors of GO p.l.c. has approved the annual results for the financial year ended 31st December 2008. The Board of Directors recommend that the Annual General Meeting, to be held on Friday 15th May, approves the payment of a final net dividend of €0.12 net of taxation per share. The payment of this Net Dividend amounts to the sum of € 12,157,259. The final dividend will be paid on the 20th of May, 2009 to all shareholders who are on the shareholders’ register as at Friday the 17th of April 2009. During the year, the Group has recorded a loss before taxation amounting to €1.3 million when compared to a profit of €27.6 million in 2007. Earnings per share for the year amounted to a negative €0.03 when compared to a positive €0.165 in 2007. The Group’s turnover amounted to €130.3 million when compared to €131.9 million in 2007, a decrease of 1.2% over 2007. Overall, the Group increased turnover from its core services. The Group registered an operating profit of €11.8 million when compared to €28.6 million in 2007. However, results include various one-off transactions, namely a charge for pensions of €12.9 million, voluntary retirement costs of €2.0 million when compared to €4.3 million in 2007 and income from refundable VAT claim of €9.6 million in 2007. If these transactions were excluded, the Group’s operational performance would have improved by 14.6% from €23.3 million in 2007 to €26.7 million in 2008.
On the banking front, Bank of Valletta p.l.c. and HSBC Bank Malta p.l.c. had a rather slow session as turnover was poor. A total of 9,327 shares changed hands in Bank of Valletta whereas 2,525 shares were swapped in HSBC Bank Malta. The share price of both stocks preferred to stay on the sidelines and closed unchanged at €2.20 and €2.18 respectively. Week on week Bank of Valletta p.l.c. lost 0.90% from its closing price of €2.22. Meanwhile, HSBC shares moved into opposite direction and increased 1.16% from its closing price of €2.155 on Tuesday 17th March.
On Tuesday 17th March, FIMBank p.l.c. announced that it published a Prospectus dated 9th March 2009 in respect of an issue of 7% Subordinated Bonds 2012-2019 for an aggregate of €15 million subject to an Over-allotment Option not exceeding €15 million in any one or a combination of EUR Bonds and USD Bonds. The Bonds shall be offered to the general public at their par value of €100 and USD100, respectively. Preferred Applicants, namely shareholders on the Register at the Central Securities Depository of the Malta Stock Exchange, and directors and employees of the Company in both instances as at 24th March 2009, will be entitled to subscribe to the Bonds at a discount of 3% of their par value, i.e. EUR97 and/or USD97. Payment of interest shall be made semi-annually. Bondholders may elect to receive payment of interest in cash or shares when the Company exercises its discretion to grant such option.

At the meeting held on 17th March 2009, the Board of Directors of RS2 Software p.l.c. approved the final audited financial statements for the financial year ended 31st December 2008. For the year ended 31st December 2008, the Company registered total revenue of €8.34m, representing a significant increase of 33% over of last year’s total revenue of €6.26m. Gross profit for the year amounts to €3.64m, yielding a gross profit margin of 44%. This shows a slight decrease in the profit margin when compared to 45% in 2007. Profit before taxation amounts to €2.9m a 35% increase over the reported profit in 2007 of €2.15m. Income tax expense for the year amounts to €0.35m. Profit after taxation amounted to €2.55m. This represents a net profit margin after taxation of 31% and an increase in profit after tax of 24% over the previous year. The Board of Directors further resolved to recommend for the approval of the Annual General Meeting the payment of a net final dividend of €0.02c2 per share amounting to €825,000. This dividend, if approved at the Annual General Meeting, will be paid on Tuesday, 19th May 2009 to shareholders who appear on the shareholders’ register as at the close of business on Wednesday 15, April 2009.

In the fixed interest market, a total of €170,981 (fifteen deals) was transacted in Government Bonds. Meanwhile, a total of €89,262 (thirteen deals) was transacted in Corporate Bonds.

Issued by GlobalCapital Financial Management Ltd, 120 The Strand, Gzira, GZR1027 for information purposes only and is not intended to constitute any financial, legal or tax advice. This write up is not to be taken as investment advice to buy or sell any investment. Investors should seek professional advice prior to taking investment decisions and should note that the value of investments may fall as well as rise. Readers who would like more information are invited to send an E-mail to or Tel: 21 342342. GlobalCapital Financial Management Ltd is a member of the Malta Stock Exchange and is licensed by the Malta Financial Services Authority (MFSA).



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25 March 2009

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