25th Apr 2019 13:44
LONDON (Alliance News) - Zegona Communications PLC reported a swing to a profit in 2018 following a sharp rise in income from its investment in Spanish telecommunications firm Euskaltel SA.
Zegona is an operating company that acquires businesses in the European telecommunications, media and technology sector.
In 2018, the company reported a pretax profit of GBP9.9 million compared to a GBP11.2 million loss in 2017.
Zegona recorded GBP12.6 million in finance income in 2018 compared to GBP105,000 the year before, which partially explains the swing to a profit.
The company's operating loss decreased 57% to GBP4.7 million from GBP11.0 million, with corporate costs decreasing 36% to GBP3.9 million and project costs decreasing 83% to GBP822,000.
Zegona said it "primarily focused" on Euskaltel during the year.
In a statement, the company said: "We still believe Euskaltel is a strategically attractive business with a strong competitive position in its home markets, with a range of opportunities to deliver profitable growth and generate significant positive cash flow.
"While we have expressed disappointment with certain aspects of its performance, we still strongly believe there is potential to create significant additional value by driving efficiency improvements, increasing revenue growth in the existing regions and accelerating expansion outside the current footprint."
Zegona currently owns 21% in Euskaltel.
Zegona added: "Beyond Spain, we continue to see a very healthy environment for acquisitions across the broader European telecommunications, media and technology landscape. There has been an increase in deal activity and we have also seen growth in the availability of assets.
"We have continued to evaluate new acquisition opportunities and actively pursue those which initially meet our rigorous financial and strategic criteria."
Zegona said it is committed to paying dividends and will return all dividends it receives from Euskaltel to its own shareholders.
Shares in Zegona were untraded Thursday, but last closed at 98.00 pence each.
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