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Abridged Un-Audited Consolidated Results for 3 and 9 Month Periods Ended 31 March 2015 and Dividend Declaration
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 CONDENSED UN-AUDITED CONSOLIDATED RESULTS FOR THREE AND NINE MONTH PERIODS
ENDED 31 MARCH 2015 AND DIVIDEND DECLARATION
UN-AUDITED UN-AUDITED UN-AUDITED UN-AUDITED AUDITED
CONDENSED
CONSOLIDATED For the 9 For the 9 For the 3
STATEMENTS OF month period For the 3 month month period month period For the year
COMPREHENSIVE ended 31 period ended 31 ended 31 ended 31 ended 30
INCOME March March March March June
2015 2015 2014 2014 2014
R R R R R
Revenue 73 495 626 24 321 932 79 779 823 24 687 273 103 439 415
Cost of sales (49 888 753) (16 718 667) (55 414 906) (16 172 642) (77 325 970)
Gross profit 23 606 873 7 603 265 24 364 917 8 514 631 26 113 445
Other income 659 325 419 583 - - 1 040 687
Operating expenses (21 081 953) (7 962 467) (20 443 441) (8 084 362) (23 172 680)
Operating profit 3 184 245 60 381 3 921 476 430 269 3 981 452
Investment revenue 306 095 89 000 92 410 31 792 162 039
Finance costs (374 434) (103 511) (295 512) (94 115) (354 821)
Profit
before tax 3 115 906 45 870 3 718 374 367 946 3 788 670
Taxation (872 454) (6 704) (1 134 104) (113 988) (1 121 240)
Profit for the period 2 243 452 39 166 2 584 270 253 958 2 667 430
Comprehensive income for
the year
2 243 452 39 166 2 584 270 253 958 2 667 430
Total comprehensive
income for the year 2 243 452 39 166 2 584 270 253 958 2 667 430
Profit and total
comprehensive income
attributable to the owners
of the company 2 243 452 39 166 2 584 270 253 958 2 667 430
EARNINGS PER SHARE
Basic earnings per share
(cents) 5.34 0.09 6.15 0.60 6.35
Dilutive earnings per share
(cents) 5.34 0.09 6.15 0.60 0.60
Headline earnings per
share (cents) 5.34 0.09 6.15 0.60 6.33
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 2 243 452 39 166 2 584 270 253 958 2 667 430
HEADLINE EARNINGS:
Earnings attributable to
owners of the Company 2 243 452 39 166 2 584 270 253 958 2 667 430
Adjusted for:
(Gain)/ loss on disposal of
property plant and
equipment – net of tax - - - - (8 717)
Headline earnings for the
period 2 243 452 39 166 2 584 270 253 958 2 658 713
Number of shares issued 42 000 000 42 000 000 42 000 000 42 000 000 42 000 000
Weighted average
number of shares issued 42 000 000 42 000 000 42 000 000 42 000 000 42 000 000
Dividends declared per
share (cents) 5.00 1.00 2.00 1.00 3.00
CONDENSED
CONSOLIDATED
STATEMENTS OF
FINANCIAL POSITION
UN-AUDITED AUDITED UN-AUDITED
As at 31 March As at 30 June As at 31 March
2015 2014 2014
R R R
ASSETS
Non-current assets
Property plant & equipment 17 062 945 16 139 662 15 546 373
Intangible assets 1 086 454 1 241 942 365 474
Goodwill 2 686 779 2 686 779 2 686 779
Deferred tax 1 661 768 2 534 222 2 521 357
22 497 946 22 602 605 21 119 983
Current assets
Inventories 155 211 260 547 1 457 700
Current tax receivable - - 33 126
Trade and other receivables 12 979 366 15 854 317 15 973 620
Cash and cash equivalents 6 980 536 7 115 824 4 210 680
20 115 113 23 230 688 21 675 126
Total assets 42 613 059 45 833 293 42 795 109
EQUITY AND LIABILITIES
Total equity
Issued capital 48 059 48 059 48 059
Retained earnings 32 190 343 32 046 891 32 383 731
32 238 402 32 094 950 32 431 790
Non-current liabilities
Finance lease liabilities 648 484 1 120 222 1 184 422
648 484 1 120 222 1 184 422
Current liabilities
Other financial liabilities 3 557 805 4 600 000 4 600 000
Trade and other payables 4 846 723 5 977 650 2 726 220
Finance lease liabilities 1 248 764 1 961 401 1 776 291
Current tax liabilities - - -
Bank overdraft 72 881 79 070 76 386
Total Current liabilities 9 726 173 12 618 121 9 178 897
Total liabilities 10 374 657 13 738 343 10 363 319
Total equity and liabilities 42 613 059 45 833 293 42 795 109
Number of shares in issue 42 000 000 42 000 000 42 000 000
Net asset value per share
(cents) 76.76 76.42 77.22
Net tangible asset value per
share (cents) 67.77 67.06 69.95
CONDENSED
CONSOLIDATED
STATEMENTS OF
CASH FLOWS
UN-AUDITED UN-AUDITED AUDITED UN-AUDITED UN-AUDITED
For the 9 For the 3
For the 9 For the 3 months months
months ended months ended For the year ended 31 ended 31
31 March 31 March ended 30 June March March
2015 2015 2014 2014 2014
R R R R R
Cash flows from
operating activities
Cash (utilised)/
generated by operations 7 544 186 460 791 9 924 177 5 417 988 2 579 052
Finance cost (374 434) (103 511) (354 821) (295 512) (94 115)
Income taxes
(paid)/refunded - - - - -
Net cash
generated/(utilised)
from operating
activities 7 169 752 357 280 9 569 356 5 122 476 2 484 937
Cash flow from
investing activities
Investment revenue
received 306 095 89 000 162 039 92 410 31 791
(Additions)/ disposal to
plant and equipment (3 278 376) (435 500) (2 156 874) (1 015 268) (465 161)
Proceeds from disposal
of plant and equipment - - 259 752 - -
Additions to intangible
assets - - (644 355) - -
Net cash used in
investing activities (2 972 281) (346 500) (2 379 438) (922 858) (433 370)
Cash flow from
financing activities
Dividends paid (2 100 000) (420 000) (1 048 748) (840 000) (420 000)
Proceeds from
borrowings 380 821 - 680 407 95 265 95 265
Repayment of
borrowings (2 607 391) (246 194) (4 335 650) (3 871 416) (1 072 042)
Net cash used in
financing activities (4 326 570) (666 194) (4 703 991) (4 616 151) (1 396 777)
Total cash movement
for the period (129 099) (655 414) 2 485 927 (416 533) 654 790
Cash and cash
equivalents at the
beginning of period 7 036 754 7 563 069 4 550 827 4 550 827 3 479 504
Cash and cash
equivalents at the end
of year 6 907 655 6 907 655 7 036 754 4 134 294 4 134 294
CONDENSED
CONSOLIDATED
STATEMENTS OF CHANGES
IN EQUITY
Share Share Total share Retained Total
capital premium capital Earnings equity
R R R R R
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
Comprehensive income
- Profit for the period - - - 1 323 777 1 323 777
Total comprehensive income - - - 1 323 777 1 323 777
Transaction with owners
- Dividends - - - (210 000) (210 000)
Total transactions with
owners - - - (210 000) (210 000)
Balance at 31 December 2013 4 200 43 859 48 059 32 549 773 32 597 832
Comprehensive income
- Profit for the period - - - 253 958 253 958
Total comprehensive income - - - 253 958 253 958
Transaction with owners
- Dividends - - - (420 000) (420 000)
Total transactions with
owners - - - (420 000) (420 000)
Balance at 31 March 2014 4 200 43 859 48 059 32 383 731 32 431 790
Comprehensive income
- Profit for the period - - - 83 160 83 160
Total comprehensive income - - - 83 160 83 160
Transaction with owners
- Dividends - - - (420 000) (420 000)
Total transactions with
owners - - - (420 000) (420 000)
Balance at 30 June 2014 4 200 43 859 48 059 32 046 891 32 094 950
Comprehensive income
- Profit for the period - - - 1 181 742 1 181 742
Total comprehensive income - - - 1 181 742 1 181 742
Transaction with owners
- Dividends - - - (840 000) (840 000)
Total transactions with
owners - - - (840 000) (840 000)
Balance at 30 September 2014 4 200 43 859 48 059 32 388 633 32 436 692
Balance at 30 September 2014 4 200 43 859 48 059 32 388 633 32 436 692
Comprehensive income
- Profit for the period - - - 1 022 544 1 022 544
Total comprehensive income - - - 1 022 544 1 022 544
Transaction with owners
- Dividends - - - (840 000) (840 000)
Total transactions with
owners - - - (840 000) (840 000)
Balance at 31 December 2014 4 200 43 859 48 059 32 571 177 32 619 236
Comprehensive income
- Profit for the period - - - 39 166 39 166
Total comprehensive income - - - 39 166 39 166
Transaction with owners
- Dividends - - - (420 000) (420 000)
Total transactions with
owners - - - (420 000) (420 000)
Balance at 30 March 2015 4 200 43 859 48 059 32 190 343 32 238 402
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.
No single customer makes up more than 10% of the Group’s Revenue.
1. COMPANY PROFILE
TeleMasters is licensed to provide voice, data and cloud-based corporate communication. The Company 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 and 9 month periods ended 31 March 2015, 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 Group that are consistent with those applied in the audited annual financial
statements for the year ended 30 June 2014.
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 net profit for the nine months after tax was R2 243 452 compared to R2 584 270 with Earnings per share down from
6.15 to 5.34 cents per share. The decrease is due to investment in additional sales and technical staff as well as certain
once off costs to improve the medical benefits for staff. Whilst Revenue is down from R79 779 823 to R73 495 626 this is
mainly due to the loss of old LCR contracts and the board is satisfied that the growth in Revenue is progressing at a pace
which will ensure that previous Revenue levels will be attained once again in the coming financial year. The Gross Profit
margin is at 32% which is extremely positive when considering the competitive industry and the constantly changing
suppliers’ pricing structures. This volatility has forced the Group to be constantly moving products between different
suppliers, which has added to the sustainability of our product offering as we are no longer dependent on one supplier as
we were in previous years. The difficulties experienced with the Telkom infrastructure during March had an adverse effect
on the Group’s profitability which effected all organisations in the telecommunications sector. We are pleased that costs
have been adequately controlled to compensate for the decreased Revenue figures.
Cash generation was positive and operating cash generated R7 544 186 enabling the purchase of R3 278 376 additional
assets and the repayment of R2 607 391 of long term borrowings. Our gearing remains extremely low with only R648 484
long term liabilities and a 2:1 current asset ratio.
Net asset value per share increased from 76.42 to 76.76 cents per share after dividends of 5 cents per share over the
nine month period were paid compared to the 2 cents per share paid in the comparative nine month period.
The company has a good working capital position with a large potential for gearing should rapid capital expansion be
required to cater for the continued growth in the Group’s client base.
2.3. Dividends Paid and Declared and Dividend Declaration
The following dividends were declared during the financial period to date:
- A dividend of 2,00 cents per share was declared and paid to all shareholders recorded in the share register of the
Company at the close of business on Friday, 24 October 2014;
- A dividend of 2,00 cents per share was declared and paid to all shareholders recorded in the share register of the
Company at the close of business on Friday, 23 January 2015;
- A dividend of 1.00 cents per share was declared and paid to all shareholders recorded in the share register of the
Company at the close of business on Friday, 24 April 2015.
Notice is hereby given that a dividend of 1 cent per share is declared and paid to all shareholders recorded in the share
register of the Company at the close of business on Friday, 24 July 2015.
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 1 cent per share for shareholders exempt from Dividends Tax;
- the net local dividend is 0.85 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 17 July 2015. Shares will trade ex-dividend from
Monday20 July 2015. The record date will be Friday, 24 July 2015 and payment will be made on Monday, 26 July 2015.
Share certificates may not be dematerialised/ re-materialised between Monday, 20 July 2015 and Friday, 24 July 2015,
both days inclusive.
2.4. Acquisition of property plant and equipment
Property, plant and equipment acquired during the year comprises 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 between the end of the period and 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 that disclosed below, there are 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.
As previously disclosed, the Group is currently involved in litigation with a previous customer, Huge Group Ltd, pertaining
to outstanding receivables to the value of R4 294 443. This receivable is, however, adequately secured through a
cession of 10 million Huge Group Ltd shares held against the debt owed to the Group. The matter has been referred for
arbitration which is currently in process and set for hearing in August 2015.
5. SHARE CAPITAL
No changes were made to the share capital during the period under review.
6. FUTURE PROSPECTS
Revenue continues to grow with trading margins at high levels. Despite the continued growth in Digital Direct, the old LCR
technology remains popular with customers and through new agreements with suppliers will provide margins which will
ensure growth in earnings in the coming periods. The investment in new sales and technical support personnel over the
past two quarters is expected to result in higher gross margin in coming periods and sustainable earnings growth. The
industry remains extremely competitive with constant pricing changes amongst suppliers and competitors, but the
prospects and increased dealer channels bodes well for the coming years.
For and on behalf of the Board:
MB Pretorius BR Topham
Chief Executive Officer Chief Financial Officer
29 June 2014
Corporate information
Directors: DS van Der Merwe*#, J Voigt*, MG Erasmus*, 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 Techno Park, Centurion
Transfer secretaries: Link Market Services Proprietary Limited, 13th Floor 19 Ameshoff Street, Braamfontein, 2017
Designated Advisor: Arbor Capital Sponsors Proprietary Limited
Website: www.telemasters.co.za
Date: 29/06/2015 01:39:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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