Wrap Text
Abridged Condensed Unaudited Consolidated Results for the three month period ended 30 September 2015
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 THE THREE MONTH PERIOD ENDED
30 SEPTEMBER 2015
UNAUDITED UNAUDITED
CONDENSED CONSOLIDATED For the 3 month
STATEMENTS OF COMPREHENSIVE For the 3 month period period ended 30
INCOME ended 30 September September
2015 2014
R R
Revenue 27 240 517 25 045 956
Cost of sales (17 804 507) (16 665 697)
Gross profit 9 436 010 8 380 259
Operating expenses (8 615 820) (6 715 135)
Operating profit/(loss) 820 190 1 665 124
Investment revenue 144 853 107 556
Finance costs (42 470) (227 958)
Profit before tax 922 573 1 544 722
Taxation (262 933) (362 980)
Profit for the period 659 640 1 181 742
Comprehensive income for the period - -
Total comprehensive income for the
period 659 640 1 181 742
Profit and total comprehensive
income attributable to the owners of
the company 659 640 1 181 742
EARNINGS PER SHARE
Basic earnings per share (cents) 1.57 2.81
Dilutive earnings per share (cents) 1.57 2.81
Headline earnings per share (cents) 1.57 2.81
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 659 640 1 181 742
HEADLINE EARNINGS:
Earnings attributable to owners of the
Company 659 640 1 181 742
Adjusted for: - -
Headline earnings for the period 659 640 1 181 742
Weighted number of ordinary shares Number of shares Number of shares
issued issued
Shares as at 30 September 2015 42 000 000 42 000 000
Shares as at 30 September 2014 42 000 000 42 000 000
Dividends declared per share (cents) 1.00 2.00
CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL
POSITION
UNAUDITED AUDITED UNAUDITED
As at 30 September As at 30 June As at 30 September
2015 2015 2014
R R R
ASSETS
Non-current assets
Property plant & equipment 16 632 331 16 696 294 16 559 121
Intangible assets 797 509 849 170 1 127 860
Goodwill 2 686 779 2 686 779 2 686 779
Deferred tax 1 349 648 1 612 581 2 171 242
21 466 267 21 844 824 22 545 002
Current assets
Inventories 267 773 384 888 53 883
Current tax receivable 33 126 33 126 -
Trade and other receivables 14 571 790 14 731 293 14 912 387
Cash and cash equivalents 6 604 667 7 180 029 8 596 383
21 477 356 22 329 336 23 562 653
Total assets 42 943 623 44 174 160 46 107 655
EQUITY AND LIABILITIES
Total equity
Issued capital 48 059 48 059 48 059
Retained earnings 32 518 697 32 279 057 32 388 633
32 566 756 32 327 116 32 436 692
Non-current liabilities
Finance lease liabilities 608 682 585 775 854 445
608 682 585 775 854 445
Current liabilities
Other financial liabilities 3 380 805 3 600 000 4 064 946
Trade and other payables 5 115 063 6 526 872 6 916 729
Finance lease liabilities 1 181 561 1 075 518 1 759 834
Bank overdraft 90 756 58 879 75 009
9 768 185 11 261 269 12 816 518
Total liabilities 10 376 867 11 847 044 13 670 963
Total equity and liabilities 42 943 623 44 174 160 46 107 655
Number of shares in issue 42 000 000 42 000 000 42 000 000
Net asset value per share (cents) 77.54 76.97 77.23
Net tangible asset value per share
(cents) 69.24 68.44 68.04
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
UNAUDITED UNAUDITED
For the 3 months For the 3 months
ended 30 September ended 30 September
2015 2014
R R
Cash flows from operating activities
Cash generated/(utilised) by operations 589 171 4 374 915
Finance cost (42 470) (227 958)
Income taxes refunded/(paid) - 33 126
Net cash generated/(utilised) from
operating activities 546 701 4 180 083
Cash flow from investing activities
Investment revenue received 144 853 107 556
(Additions)/disposal to plant and
equipment (743 548) (960 622)
Net cash used in investing activities (598 695) (853 066)
Cash flow from financing activities
Dividends paid (420 000) (840 000)
Proceeds from borrowings - 644 761
Repayment of borrowings (90 245) (1 647 159)
Net cash used in financing activities (510 245) (1 842 398)
Total cash movement for the period (607 239) 1 484 619
Cash and cash equivalents at the
beginning of period 7 121 150 7 036 754
Cash and cash equivalents at the end
of period 6 513 911 8 521 373
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 year - - - 2 667 430 2 667 430
Total comprehensive income - - - 2 667 430 2 667 430
Transaction with owners
- Dividends (1 260 000) (1 260 000)
Total transactions with owners (1 260 000) (1 260 000)
Balance at 30 June 2014 4 200 43 859 48 059 32 046 891 32 094 950
Comprehensive income
- Profit for the year - - - 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
Comprehensive income
- Profit for the period - - - 1 570 424 1 570 424
Total comprehensive income - - - 1 570 424 1 570 424
Transaction with owners
- Dividends - - - (1 680 000) (1 680 000)
Total transactions with owners
Balance at 30 June 2015 4 200 43 859 48 059 32 279 057 32 327 116
Comprehensive income
- Profit for the period - - - 659 640 659 640
Total comprehensive income - - - 659 640 659 640
Transaction with owners
- Dividends - - - (420 000) (420 000)
Total transactions with owners (420 000) (420 000)
Balance at 30 September 2015 4 200 43 859 48 059 32 518 697 32 566 756
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 delivers full telecommunication connectivity voice services across South Africa to SMEs and enterprise
clients. We have full ICASA ECS and ECNS telecommunication licenses and carry all call types to all destinations.
2. FINANCIAL RESULTS
2.1 Statement of compliance and basis of preparation
The unaudited 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 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 that are consistent with those applied in the
audited annual financial statements for the period ended 30 June 2015.
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
Despite increased competition on selling price Group Revenue has increased by 8.76% which is an indication of the
gradual increase in our client base. Gross Profit Percentage is slightly up to 34.64% from 33.46% as a result of a
reduction of the interconnection cost per minute when compared to the prior year. Operating expenditure is
significantly higher as a result of the ongoing investment into additional sales and technical staff required to exploit the
growth opportunities in the market. This investment has shown results and will contribute towards future quarters due
to long sales lead times and the learning curve for the new staff. Despite tough competition the company continues to
invest in the future and is confident that these investments will contribute to future growth and the sustainability of the
core business.
The reduction in borrowings from the prior period has reduced our finance costs in the current period dramatically but
is not significant to the Group results due to the low level of borrowings in the Group. The Earnings per share has
reduced from 2.81 cents per share to 1.57 cents per share as a result of the deliberate investment into operational
expenditure.
In addition to the investment in operating capacity we invested R743 548 into additional equipment. As a result of
good working capital ratios we still paid a one cent per share dividend to shareholders, albeit down from the two cents
per share paid in the prior period.
2.3 Dividends paid and notice of declaration of dividend
The following dividends were declared during the year to date:
- A dividend of 1 cent per share was declared and payable to all shareholders recorded in the share register of
the Company at the close of business on 23 October 2015;
Notice is hereby given that a dividend of 1 cent per share is declared in respect of the quarter commencing
1 October 2015 and ending 31 December 2015 and will be paid to all shareholders recorded in the share register of
the Company at the close of business on Friday 29 January 2016.
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, 22 January 2016. Shares will trade ex-
dividend from Monday, 25 January 2016. The record date will be Friday, 29 January 2016 and payment will be made
on Monday, 1 February 2016.
Share certificates may not be dematerialised/ re-materialised between Monday, 25 January 2016 and Friday,
29 January 2016, both days inclusive.
2.4 Acquisition of property plant and equipment
Property, plant and equipment acquired during the period comprise various items of IT equipment, 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
There are currently no legal proceedings of which the Group 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, other than as disclosed
below:
- The Company 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 previous client has lodged a counter claim against the Company
for a similar amount as the claim the Company has against it. The matter has been referred for arbitration,
which is in process.
- The Company is currently involved in litigation with a previous supplier relating to disputes over amounts billed
by the suppler to the value of R1.6 million.
The estimated legal fees to continue pursuing these legal matters are approximately R600 000.
5. GOING CONCERN
The board of directors is of the opinion that, having regard to the current status and the future strategy of the Group,
the Group has sufficient resources to continue as a going concern.
6. SHARE CAPITAL
No changes to share capital occurred during the period.
7. CORPORATE GOVERNANCE
The Group subscribes to the values of good corporate governance at all levels and is committed to conducting
business with discipline, integrity and social responsibility.
8. FUTURE PROSPECTS
The Group continues to grow its client base on a monthly basis. The growth is primarily funded from operating capital
and these new clients will result in increased profitability over time. The investment into additional staff, whilst having
not yet provided the returns hoped for, continues to have the promise of a significant increase in Revenue in the
coming months. The Board, though disappointed in the current results remains upbeat for the coming periods and
believe that the current strategy will be rewarded in due course. The market conditions remain extremely competitive
with continued regulatory uncertainty but our business model is sound and our technology continues to offer the
highest quality of telecommunications solutions for business in South Africa. We are poised to remain a significant
player in this market.
For and on behalf of the Board:
MB Pretorius BR Topham
Chief Executive Officer Chief Financial Officer
6 January 2016
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: TAG Consulting (Pty) Ltd
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: Arbor Capital Sponsors Proprietary Limited
Website: www.telemasters.co.za
Date: 06/01/2016 05:46:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
