With funding in place, GO internet (MI:GO) is stepping up the implementation of its network and we reduce FY17 EPS forecasts to capture this profile as well as the new €1.75m loan, but leave FY18 estimates largely unchanged. A pick-up in the pace of subscriber additions could trigger upside to our base case DCF of €2.8/share. In addition, with 3.5GHz now earmarked for 5G services, GO’s spectrum could be used for a wider service offering in the longer term and may put it in focus for operators looking to secure 5G capacity.
FY16 results reflect slower roll-out of network
Despite the slower pace of network roll-out in 2016, GO continued to show steady financial progress. FY16 revenues of €6.4m increased in line with the subscriber base (+21%). EBITDA of €2.5m, while up 25%, was 11% lower than our forecast, reflecting the launch costs of the new fibre service in Perugia. Following last October’s €4m funding round, management took advantage of favourable terms before the year-end to acquire additional base stations. Consequently, despite the slowdown in installation of base station last year, capital expenditure increased 28% to €5.7m and net debt was €3.0m (vs €2.3m forecast).
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