Wrap Text
TLM - TeleMasters - Unaudited Condensed Consolidated Interim Results for the
three month period ended 31 December 2011
TELEMASTERS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2006/015734/06)
Share code: TLM & ISIN Number: ZAE000093324
("TeleMasters" or "the Company")
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE THREE MONTH
PERIOD ENDED 31 DECEMBER 2011
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited 3 Unaudited 3
months ended 31 months ended 31
December 2011 December 2010
R R
Revenue 55 963 175 86 230 570
Cost of sales (49 259 644) (72 991 796)
Gross profit 6 703 531 13 328 774
Operating expenses (8 098 483) (8 171 761)
Operating (loss) profit (1 394 952) 5 067 013
Investment income 123 587 212 368
Finance cost (51 586) (91 619)
(Loss) profit before taxation (1 322 951) 5 187 762
Taxation 271 994 (1 807 444)
(Loss) profit after taxation (1 050 957) 3 380 318
Total comprehensive (loss) income for (1 050 957) 3 380 318
the period
Basic (loss) earnings per share (2.50) 8.05
(cents)
Diluted (loss) earnings per share (2.50) 8.05
(cents)
Headline earnings reconciliation:
(Loss) profit for the period (1 050 957) 3 380 318
Adjustment: Profit on disposal of - (19 315)
property, plant & equipment
Headline (loss) earnings for the (1 050 957) 3 380 318
period
Headline (loss) earnings per share (2.50) 8.00
(cents)
Diluted headline earnings (loss) per (2.50) 8.00
share (cents)
Weighted average number of shares in 42 000 000 42 000 000
issue
Dividends declared per share (cents) 1.00 4.00
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited at Reviewed at Unaudited at
31 December 30 September 30 December
2011 2011 2010
R R R
ASSETS
Non-current assets
Property, plant and 14 463 646 14 008 539 16 319 515
equipment
Intangible assets 1 670 891 1 912 081 2 603 494
Goodwill 2 415 685 2 415 685 2 686 779
Deferred tax assets 4 547 298 4 233 304 4 283 830
Total non-current assets 23 097 520 22 569 609 25 893 618
Current assets
Trade and other receivables 13 208 736 20 024 147 28 704 268
Cash and cash equivalents 15 746 079 20 420 572 21 650 169
Total current assets 28 954 815 40 444 719 50 354 437
Total assets 52 052 335 63 014 328 76 248 055
EQUITY AND LIABILITIES
Capital and reserves
Issued capital 48 059 48 059 48 059
Retained earnings 31 408 718 32 879 675 31 719 642
Total equity 31 456 777 32 927 734 31 767 701
Non-current liabilities
Finance lease liabilities 252 584 336 779 1 720 031
Total non-current 252 584 336 779 1 720 031
liabilities
Current liabilities
Trade and other payables 18 358 034 27 256 316 38 426 537
Current portion of finance 1 760 123 2 305 928 2 481 140
lease liabilities
Current tax payable 169 163 122 260 1 773 005
Bank overdraft 55 654 65 311 79 641
Total current liabilities 20 342 974 29 749 815 42 760 323
Total liabilities 20 595 558 30 086 594 44 480 354
Total equity and liabilities 52 052 335 63 014 328 76 248 055
Number of shares in issue 42 000 000 42 000 000 42 000 000
Net asset value per share 74.89 78.40 75.64
(cents)
Net tangible asset value per 65.17 68.10 63.04
share (cents)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited at Reviewed at Unaudited at
31 December 30 September 31 December
2011 2011 2010
R R R
Cash flows from operating
activities
Cash generated from (2 501 669) 17 928 045 6 633 532
operations
Finance costs (51 586) (482 418) (91 619)
Tax paid - (6 836 590) (2 501 409)
Net cash inflow from (2 553 255) 10 609 037 4 040 504
operating activities
Cash flows from investing
activities
Property, plant and (1 605 167) (2 765 418) (746 496)
equipment acquired
Proceeds on sale of - 584 054 19 315
property, plant and
equipment
Investment income 123 587 876 040 212 368
Net cash outflow from (1 481 580) (1 305 324) (514 813)
investing activities
Cash flows from financing
activities
Proceeds from borrowings - 664 957 251 994
Dividends paid - (7 140 000) (1 705 174)
Repayment of borrowings (630 000) (2 545 435) (574 008)
Net cash outflow from (630 000) (9 020 478) (2 027 188)
financing activities
Total cash movement for the (4 664 835) 283 235 1 498 503
period
Cash and cash equivalents 20 355 260 20 072 025 20 072 025
at the beginning of the
period
Cash and cash equivalents 15 690 425 20 355 260 21 570 528
at the end of the period
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Issued Share Total share Retained Total
capital premium Capital Income Equity
Balance at 4 200 000 2 143 859 2 148 059 25 984 967 28 133 026
30
September
2009
Comprehensi - - 3 180 545 3 180 545
ve income - -
Profit for
the period
ended 31
December
2009
Transaction - - - (1 680 000) (1 680 000)
with owners
- Dividends
declared
Balance at 4 200 000 2 143 859 2 148 059 27 485 512 29 633 571
31 December
2009
Comprehensi - - - 4 633 813 4 633 813
ve income -
Profit for
the period
ended 30
September
2010
Transaction - - - (2 100 000) (2 100 000)
with owners
- Dividends
declared
Transaction - (2 100 000) (2 100 000) - (2 100 000)
with owners
-Distributi
on of share
premium
Balance at 4 200 000 43 859 48 059 30 019 324 30 067 383
30
September
2010
Comprehensi - - - 3 380 318 3 380 318
ve income -
Profit for
the period
ended 31
December
2010
Transaction - - - (1 680 000) (1 680 000)
with owners
- Dividends
declared
Balance at 4 200 000 43 859 48 059 31 719 642 31 767 701
31 December
2010
Comprehensi - - - 6 620 033 6 620 033
ve income -
Profit for
the period
ended 30
September
2011
Transaction - - - (5 460 000) (5 460 000)
with owners
- Dividends
declared
Balance at 4 200 000 43 859 48 059 32 879 675 32 927 734
30
September
2011
Comprehensi - - - (1 018 365) (1 018 365)
ve income -
Loss for
the period
ended 31
December
2011
Transaction - - - (420 000) (420 000)
with owners
- Dividends
declared
Balance at 4 200 000 43 859 48 059 31 441 310 31 489 369
31 December
2011
SEGMENT REPORT
The Company does not have different operating segments. The business is
conducted in South Africa and is managed centrally with no branches. The
company is managed as one operating unit. Accordingly there is no
meaningful segmental information to report other than the following
information:
Unaudited Unaudited
3 Months ended 3 Months
31 December ended 31
2011 December 2010
R R
Revenue by Nature
Sale of fixed cellular airtime 51 143 133 86 165 875
Sale of fixed line airtime 1 989 820 -
Connection incentive bonuses - 5 150
Other 2 830 222 59 545
Total revenue 55 963 175 86 230 570
Major customers
Revenues from transactions with external
customers amounting to 10 percent or more
of the Company`s revenue, are disclosed
below:
- Customer A - 10 017 726
- Customer B 19 144 400 27 135 058
- Other customers 36 818 775 49 077 786
Total revenue 55 963 175 86 230 570
1. COMPANY PROFILE
TeleMasters is a fully licenced fixed-line telecommunication service provider.
It operates exclusively in the South African corporate market. The company
provides clients access to the most efficient and effective telecommunication
technologies and services.
2. FINANCIAL RESULTS
2.1 Statement of compliance and basis of preparation
The interim financial statements for the three months ended 31 December 2011
have been presented in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting
Standards, the information required by IAS 34: Interim Financial Reporting, the
South African Companies Act, as amended, the AC500 Standards as issued by the
Accounting Practices Board and the JSE Listings Requirements. The results have
been prepared in accordance with accounting policies of the Company that are
consistent with those applied in the audited annual financial statements for the
year ended 30 September 2010 and the reviewed results for the year ended 30
September 2011. These results were prepared under the supervision of Brandon
Topham CA(SA) and have not been reviewed or audited by the Company`s auditors.
2.2 Commentary on financial results and prospects
The first quarter reflects management`s expectations as voiced earlier that 2012
will be a tough transitional year. The traditional least-cost routing (LCR)
turnover decreased by 35% over the corresponding previous period due to the loss
of 2 large clients that reached the end of tender periods. Expectations are that
no more LCR tenders will be issued in future. The licenced telecoms services are
being rolled out and have reached 260 clients. The challenge is to exceed the
loss of revenue with the conversion of 600 long-standing current clients and the
acquisition of new clients to the company`s Digital Direct service. A further
R1.6m has been invested in capital acquisition in order to upgrade the
interconnect facilities to be independent of 3rd party vendors and so increase
the quality of service. The company has amended its billing, processes, sales
model, logistics and technical support to serve the requirements of cellular and
fixed line billing and facilitate geographic number porting successfully. A
number of learning experiences were inevitable and structural and procedural
adjustments were made to decrease response time and increase efficiency of
service provision. The company expects an ever-increasing level of quality and
its current level of voice service quality rivals any other offering in the
market. With increased billing the company will realise economies of scale in
its operations and fixed cost components. Operating expenditure has remained
constant and active measures to reduce this are being implemented. Gross margin
is expected to increase as number porting is rolled out and incoming call
revenues are realised. The company has sufficient reserves to ensure the roll
out of the needed technology. A lower interim dividend for the period was
declared to allow for conservative cash flow management.
2.3. Dividends
On 21 December 2011, the board declared a quarterly interim dividend of 1 cent
per share, which was paid to all shareholders recorded in the share register of
the Company at the close of business on Friday, 13 January 2011.
During the first quarter of the prior financial year, which ended on 31 December
2010, the Company declared an interim dividend of 4 cents per share for that
quarter.
2.4. Acquisition of property, plant and equipment
Property, plant and equipment acquired during the quarter comprise various items
of Furniture and fittings, Motor vehicles, Office equipment, IT equipment and
Routers and handsets.
3. SUBSEQUENT EVENTS
The directors are not aware of any matter or circumstance arising since the
reporting date which would have a material effect on the consolidated results or
the consolidated financial position of the Company as reported.
4. CHANGES IN THE COMPOSITION OF THE BOARD & SHARE CAPITAL
There have been no changes to the composition of the board nor to the share
capital of the Company.
For and on behalf of the Board:
MB Pretorius BR Topham
Chief Executive Officer Chief Financial Officer
16 February 2011
Corporate information
Directors: DS van Der Merwe*#, J Voigt*, VI Beck*#, MB Pretorius, BR Topham
(* non-executive, # independent)
Registered address: 90 Regency Drive, Route 21 Corporate Office Park, Irene,
0157, Pretoria (P.O. Box 68255, Highveld Park, 0169)
Company secretary: Brandon Topham Inc.
Auditors: BDO South Africa Inc., Block C, Riverwalk Office Park, 41 Matroosberg
Avenue, Ashlea Gardens, Pretoria
Transfer secretaries: Computershare Investor Services (Proprietary) Limited, 70
Marshall Street, Johannesburg, 2001 (P.O. Box 61051, Marshalltown, 2107)
Designated Advisor: Arcay Moela Sponsors (Proprietary) Limited
Website: www.telemasters.co.za
Date: 16/02/2012 08:00:02 Supplied by www.sharenet.co.za
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