Wrap Text
Abridged Condensed Consolidated Results for the Period Ended 30 June 2013
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” or “the Group”)
ABRIDGED UN-AUDITED CONDENSED CONSOLIDATED RESULTS FOR THE THREE MONTH
PERIOD ENDED 30 SEPTEMBER 2013
UNAUDITED AUDITED
CONDENSED
CONSOLIDATED For the 3 month
STATEMENTS OF period ended 30 For the 3 month period
COMPREHENSIVE INCOME September ended 30 September
2013 2012
R R
Revenue 25 108 508 30 434 606
Cost of sales (17 884 416) (28 073 776)
Gross profit 7 224 092 2 360 830
Other gains 176 969
Operating expenses (5 782 752) (2 629 514)
Operating profit/(loss) 1 441 340 91 715
Gain on derecognition of liability - 5 430 017
Investment revenue 31 466 113 151
Finance costs (74 955) (81 235)
Profit before tax 1 397 851 5 370 218
Taxation (391 498) (1 185 511)
Profit for the year 1 006 535 4 184 707
Comprehensive income for the
year
- -
Total comprehensive income
for the year 1 006 535 4 184 707
Profit and total
comprehensive income
attributable to the owners of
the company 1 006 535 4 184 707
EARNINGS PER SHARE
Basic earnings per share
(cents) 2.40 9.96
Dilutive earnings per share
(cents) 2.40 9.96
Headline earnings per share
(cents) 2.40 9.96
The earnings per share/ dilutive
earnings per share and headline
earnings per share were
determined using the following
information:
Basic and dilutive earnings -
used in the calculation of
basic and dilutive earnings
per share
Earnings attributable to owners
of the company 1 006 535 4 184 707
HEADLINE EARNINGS:
Earnings attributable to owners
of the Company 1 006 535 4 184 707
Adjusted for:
(Gain)/ loss on disposal of
property plant and equipment –
net of tax - -
Headline earnings for the
period 1 006 535 4 184 707
Weighted average
Weighted number of ordinary Number of shares number of shares
shares issued issued
Shares as at 30 June 2013 42 000 000 42 000 000
Shares as at 30 September
2012 42 000 000 42 000 000
Dividends declared per share
(cents) 0.50 2.00
CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL
POSITION
UN-AUDITED Audited AUDITED
As at 30 As at 30 As at 30
September June September
2013 2013 2012
R R R
ASSETS
Non-current assets
Property plant & equipment 16 298 762 17 071 370 17 314 281
Intangible assets 843 750 1 082 888 1 577 573
Goodwill 2 686 779 2 686 779 2 686 779
Deferred tax 3 263 963 3 655 462 3 904 063
23 093 254 24 496 499 25 482 696
Current assets
Inventories 1 862 520 2 233 771 1 451 828
Current tax receivable 33 126 33 126 -
Trade and other receivables 17 308 781 17 690 979 13 029 493
Cash and cash equivalents 3 273 387 4 633 006 8 461 901
22 477 814 24 590 882 22 943 222
Total assets 45 571 068 49 087 381 48 425 9185 918
EQUITY AND LIABILITIES
Total equity
Issued capital 48 059 48 059 48 059
Retained earnings 31 435 996 30 639 461 31 222 381
31 484 055 30 687 520 31 270 440
Non-current liabilities
Finance lease liabilities 1 959 342 2 384 318 1 700 717
1 959 342 2 384 318 1 700 717
Current liabilities
Other financial liabilities 6 110 122 7 010 123 -
Trade and other payables 4 052 088 6 980 816 13 869 753
Finance lease liabilities 1 839 425 1 942 425 1 307 692
Current tax liabilities - - 202 628
Bank overdraft 126 036 82 179 74 688
15 454 761
Total liabilities 12 127 671 16 015 543 17 155 478
Total equity and liabilities 45 571 068 49 087 381 48 425 918
Number of shares in issue 42 000 000 42 000 000 42 000 000
Net asset value per share (cents) 74.96 73.07 74.45
Net tangible asset value per
share (cents) 66.56 64.09 64.30
CONDENSED CONSOLIDATED
STATEMENTS OF CASH
FLOWS
UN-AUDITED AUDITED
For the 3 months
For the 3 months ended 30
ended 30 September September
2013 2012
R R
Cash flows from operating
activities
Cash (utilised)/ generated by
operations 352 133 (441 012)
Finance cost (74 955) (81 235)
Income taxes (paid)/refunded - (17 004)
Net cash generated/(utilised)
from operating activities 277 178 (539 251)
Cash flow from investing
activities
Investment revenue received 31 466 113 151
(Additions)/ disposal to plant and
equipment (74 143) 300 085
Proceeds from disposal of plant
and equipment - 251 199
Additions to intangible assets - (487 197)
Net cash used in investing
activities (42 677) (177 238)
Cash flow from financing
activities
Dividends paid (210 000) (840 000)
Proceeds from borrowings 95 264 (275 191)
Repayment of borrowings (1 523 241) (337 107)
Net cash used in financing
activities (1 637 977) (1 452 298)
Total cash movement for the
period (1 403 476) (2 168 787)
Cash and cash equivalents at the
beginning of period 4 550 827 10 556 000
Cash and cash equivalents at
the end of year 3 147 351 8 387 213
CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN
EQUITY
Total
Share Share share Retained Total
capital premium capital earnings equity
R R R R R
Balance at 30 September 2011 4 200 43 859 48 059 32 879 674 32 927 733
Comprehensive income
- (Loss0/ Profit for the period - - - (4 161 733) (4 161 733)
Total comprehensive income - - - (4 161 733) (4 161 733)
Transaction with owners
- Dividends - - - (840 000) (840 000)
Total transactions with owners - - - (840 000) (840 000)
Balance at 30 June 2012 4 200 43 859 48 059 27 877 941 27 926 000
Comprehensive income
- Profit for the period - - - 4 184 440 4 184 440
Total comprehensive income - - - 4 184 440 4 184 440
Transaction with owners
- Dividends - - - (840 000) (840 000)
Total transactions with owners - - - (840 000) (840 000)
Balance at 30 September 2012 4 200 43 859 48 059 31 222 381 31 270 440
Comprehensive income
- Profit for the period - - - 257 080 257 080
Total comprehensive income - - - 257 080 257 080
Transaction with owners
- Dividends - - - (840 000) (840 000)
Total transactions with owners - - - (840 000) (840 000)
Balance at 30 June 2013 4 200 43 859 48 059 30 639 461 30 687 520
Comprehensive income
- Profit for the period - - - 1 006 535 1 006 535
Total comprehensive income - - - 1 006 535 1 006 535
Transaction with owners
- Dividends (210 000) (210 000)
Total transactions with owners (210 000) (210 000)
Balance at 30 September 2013 4 200 43 859 48 059 31 435 996 31 484 055
SEGMENT REPORT
IFRS8 requires an entity to report financial and descriptive
information about its reportable segments, which are operating
segments or aggregations of operating segments that meet specific
criteria. Operating segments are components of an entity about
which separate financial information is available that is evaluated
regularly by the chief operating decision maker. The Chief
Executive Officer is the Chief Operating decision maker of the
Group.
The Group 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.
All revenues from external customers originate in South Africa.
LCR and Digital Direct+ are two technologies which are fully
integrated to provide one telecommunications solution to our
customers and are not separately managed.
A breakdown of the Group’s revenue from external customers is set
out as follows:
Audited 3
Un-Audited 3 Months ended
Months ended30 30 September
September 2013 2012
R R
Revenue by Nature
Sale of fixed cellular airtime 15 508 769 22 316 852
Sale of fixed line airtime 9 512 817 2 439 217
Other 86 922 5 678 537
Total revenue 25 108 508 30 434 606
Major customers
Revenues from transactions with a single external
customer amounting to 10 per cent or more of the
Group’s revenue, are disclosed below:
- Customer B - 2 313 607
- Other customers 25 108 508 28 120 999
Total revenue 25 108 508 30 434 606
1. COMPANY PROFILE
TeleMasters is licensed to provide voice, data and cloud based corporate communication. It supplies
fixed-line, fixed cellular, fixed data and virtual PBX services countrywide.
2. FINANCIAL RESULTS
2.1 Statement of compliance and basis of preparation
The un-audited abridged condensed financial results comprise a condensed statement of financial
position, condensed statement of comprehensive income, condensed statement of changes in equity
and condensed statement of cash flow for the 3 month period ended 30 September 2013 which have
been presented in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (“IFRS”), the information required by
IAS 34: Interim Financial Reporting, the South African Companies Act as amended, SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by Financial Reporting Standards Council and the JSE Listings
Requirements. The results have been prepared in accordance with accounting policies of the Group
that are consistent with those applied in the audited annual financial statements for the year ended
30 June 2013.
These results were prepared under the supervision of Brandon Topham CA (SA) and have not been
audited or reviewed by the Auditors of the Group.
2.2 Commentary on operating results
The board is pleased to reflect a net profit for the three months of R1 006 535. These results have
been achieved with lower Revenue when compared with the comparative period and is in line with the
reported change over in part of the technological platform used from Least Cost Routing (“LCR”) to
our Digital Direct offering. The newer offering and innovations applied to our business solution
resulted in a higher Gross Margin of 28.77% when compared with the prior periods 7.76%. The Group
is on track to convert and re-capture market share which was lost as a result of the changes to
the interconnect pricing model. Our new offering once again offers a superior quality communications
product with substantial savings when compared to a fixed line agreement with one Telco.
The profitability and sustainability of the Group has been ensured by the increase of the Gross Margin
and the decrease of Operating Costs.
EPS is at 2.40 cents per share which is down from the comparative period EPS of 9.96 cents per
share but substantially up from prior period results taking into account the fact that the Operating
Profit in the prior period was achieved as a result of an accounting gain on de-recognition of a liability
of R 5 430 017. Thus it is clear that the current operating results reflect a substantial improvement in
Group profitability and on-going sustainability.
We are pleased to report that the problem experienced in obtaining a Tax clearance certificate from
the South African Revenue Services have now been resolved and we are making good progress in
recovering long outstanding debtors who were withholding payments subject to obtaining the tax
clearance. This has and will continue to result in our outstanding Trade Receivables once again
reducing to our low levels of the past.
Our working capital and Balance Sheet remains positive and all of our key ratios remain healthy. The
board considers the working capital satisfactory in the current market to maintain operations in the
coming year and looks forward to increased cash reserves in future.
The Group has extremely low debt with Long Term and Current portion of Finance Lease Liabilities
totalling R3 798 767 when compared with a total depreciated plant and equipment balance of over
R16.29 million excluding all intangibles.
The net asset value per share amounts to 74.96 (2012: 74.45). This is higher than many trades on
the JSE and is a very good indicator that the share price is lower than should be. The board remains
committed to paying quarterly dividends which should once again rise to higher levels in line with
improved profitability and working capital generation by the Group.
2.3. Dividends paid
Notice is hereby given that a dividend of 0,5 cents per share is declared and will be paid to all
shareholders recorded in the share register of the Company at the close of business on Friday,
17 January 2014.
The dividend will be subject to the Dividends Tax that was introduced with effect from 1 April 2012. In
accordance with the provisions of the Listings Requirements of the Johannesburg Stock Exchange,
the following additional information is disclosed:
- the dividend has been declared out of retained earnings;
- the local Dividends Tax rate is 15%;
- the gross local dividend is 0.5 cents per share for shareholders exempt from Dividends Tax;
- no STC credits have been utilised
- the net local dividend is 0.425 cents per share for shareholders liable for Dividends Tax;
- the Company has 42 000 000 ordinary shares in issue;
- the Company’s income tax reference number is: 9683978143.
The following dates are applicable to the dividend:
The last day to trade in order to be eligible for the dividend will be Friday, 10 January 2014. Shares
will trade ex-dividend from Monday, 13 January 2014. The record date will be Friday, 17 January
2014 and payment will be made on Monday, 20 January 2014.
Share certificates may not be dematerialised/ re-materialised between Monday, 13 January 2014 and
Friday, 17 January 2014, both days inclusive.
2.4. Acquisition of property plant and equipment
Property, plant and equipment acquired during the year 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
Group as reported.
4. LITIGATION
Other than mentioned below, there is currently no legal or related proceedings against the Group, of
which the Board is aware, which may have or have had in the 12 months preceding the date of this
report a material effect on the consolidated position of the Group, besides the matter listed below.
The Group is currently involved in litigation with a previous client pertaining to outstanding receivables
to the value of R4.1 million. These receivables are, however adequately secured through a cession of
shares held against the debt owed to the Group. The matter has been referred for arbitration which is
currently taking place.
5. SHARE CAPITAL
No changes to share capital occurred during the past financial year.
6. FUTURE PROSPECTS
The Group continues with its transition from a fixed cellular agency to a fully ICASA licensed fixed line
Telco.
The company has invested in a unique set of technologies that delivers the highest quality of voice. It
has successfully implemented its Virtual PBX service and rolled this out profitably. As reported
previously, our transition to the new technologies brings a higher quality solution to clients with the
added benefit to the Group of higher margins when compared to that earned when only using LCR as
we did in the past.
The Board remains positive about the future and believes that the profitability will continue to improve
in the coming periods.
For and on behalf of the Board:
MB Pretorius BR Topham
Chief Executive Officer Chief Financial Officer
6 December 2013
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
Auditors: Nexia SAB&T, 119 Witch-Hazel Avenue, Highveld Technopark, Centurion
Transfer secretaries: Link Market Services Proprietary Limited 13th Floor, 19 Ameshoff Street
Braamfontein, 2017
Designated Advisor: Arcay Moela Sponsors Proprietary Limited
Website: www.telemasters.co.za
Date: 06/12/2013 05:41:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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