| Wed 30 Jul 2008, 11:54 | | TLM - Telemasters - Interim Results For The Nine Month Period Ended 30 June 2008 |
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TLM
TLM
TLM - Telemasters - Interim Results For The Nine Month Period Ended 30 June 2008
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")
INTERIM RESULTS FOR THE NINE MONTH PERIOD ENDED 30 June 2008 AND DECLARATION OF
THIRD INTERIM DIVIDEND
INCOME STATEMENTS Unaudited Unaudited
9 months 9 months
ended ended
30 June 30 June
2008 2007
R R
Revenue 128,391,974 108,275,119
Cost of sales -106,684,757 -90,797,092
Gross profit 21,707,217 17,478,027
Operating expenses -9,829,758 -7,053,297
Operating profit 11,877,459 10,424,730
Investment income 878,097 217,707
Finance costs -153,634 0
Profit before taxation 12,601,922 10,642,437
Taxation -4,381,805 -3,078,860
Attributable earnings for the period 8,220,117 7,563,577
6.40% 6.99%
Reconciliation of headline earnings:
Attributable earnings 8,220,117 7,563,577
Adjustments: 0 0
Headline earnings 8,220,117 7,563,577
Weighted average shares in issue (`000) 42,000,000 42,000,000
Headline earnings per share (cents) 19.57 18.01
Earnings per share (cents) 19.57 18.01
Dividends paid per share (cents) 18.00 0
BALANCE SHEETS Unaudited at Unaudited
at
30 June 30 June
2008 2007
R R
ASSETS
Non-current assets
Intangible assets 1,679,618 207,875
Property, plant and equipment 9,057,162 6,948,302
10,736,780 7,156,177
Current assets
Trade and other receivables 16,943,564 12,695,809
Cash and cash equivalents 12,378,088 11,296,498
29,321,652 23,992,307
Total assets 40,058,432 31,148,484
EQUITY AND LIABILITIES
Total equity
Share capital 5,508,059 5,970,462
Retained earnings 11,673,642 7,563,577
17,181,701 13,534,039
Non-current liabilities
Deferred tax 376,293 0
Instalment sale agreements 613,663 625,830
989,956 625,830
Current liabilities
Current portion of long term liabilities 571,658 242,008
Current tax payable 3,377,362 3,078,860
Dividend payable 30,621
Provisions 172,939 122,939
Trade and other payables 17,734,195 13,544,808
21,886,775 16,988,615
Total equity and liabilities 40,058,432 31,148,484
Number of shares in issue (`000) 42,000,000 42,000,000
Net asset value per share (cents) 40.91 32.22
Net tangible asset value per share (cents) 36.91 31.73
CASH FLOW STATEMENTS Unaudited at Unaudited
at
30 June 30 June
2008 2007
R R
Cash flows from operating activities
Cash generated from operations 9,526,386 13,248,123
Finance costs -153,634 0
Tax paid -5,069,566 0
Net cash from operating activities 4,303,186 13,248,123
Cash flows from investing activities
Expenditure to expand operating activities
Property, plant and equipment acquired -3,485,530 -8,751,064
Investment income 878,097 217,707
Sale of financial asset 19
Intangible assets acquired -1,565,306 -256,568
Net cash from investing activities -4,172,720 -8,789,925
Cash flows from financing activities
Proceeds on share issue - 5,970,462
Instalment sale agreements 1,138,956 867,838
Dividends paid -7,529,379 -
Repayment of instalment sale agreements -692,880 -
Net cash from financing activities -7,083,303 6,838,300
Total cash movement for the period -6,952,837 11,296,498
Cash at beginning of period 19,330,925 -
Total cash at end of the period 12,378,088 11,296,498
STATEMENT OF CHANGES IN SHAREHOLDERS`
EQUITY
Share Share Retained Total
Capital Premium Income R
R R R
Balance 23 May 2006 on - - - -
incorporation
Share capital and share premium 4,200 5,966,262 - 5,970,462
issued
Share issue & listing costs - -462,403 - -462,403
applied against share premium
Net profit for the year ended 30 - - 7,563,577 7,563,577
June 2007
Balance at 30 September 2008 4,200 5,503,859 7,563,577 13,071,636
Dividends paid 30 November 2007 - - - -5,040,000
5,040,000
Net profit for the period ended 30 - - 3,449,948 3,449,948
September 2007
Dividends paid 31 March 2008 - - -2,520,000 -2,520,000
Balance at 31 March 2008 4,200 5,503,859 3,453,525 8,961,584
Net profit for the period ended 30 - - 8,220,117 8,220,117
June 2008
Balance at 30 June 2008 4,200 5,503,859 11,673,642 17,181,701
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
9 months 9 months
ended ended
30 June 30 June
2008 2007
R R
Revenue by Nature
Commissions earned on airtime 118,688,128 98,996,365
Connection incentive bonuses 9,668,757 9,250,690
Other 35,089 28,064
128,391,974 108,275,119
Major customers
Revenues from transactions with a single
external customer accounting to 10 percent or
more of the company`s revenue, are disclosed
below:
- Commission - Customer A 17,462,141 20,188,363
- Commission - Customer B 13,864,102 -
- Commission and connection incentive bonus 97,065,731 88,086,756
with other customers
128,391,974 108,275,119
1. FINANCIAL RESULTS
1.1 Statement of compliance and basis of preparation
The consolidated interim financial statements for the nine months ended 30
June 2008 have been presented in accordance with IAS 34, Interim Financial
Reporting. The results have been prepared in accordance with accounting
policies of the company that comply with International Financial Reporting
Standards. These results have not been reviewed or audited by the Company`s
auditors.
1.2 Commentary
The Revenue indicates an increase of 18.57% compared with the comparative
nine month period. As mentioned in our previous quarter`s results we
anticipated a substantial improvement on the results for the last half of
the year. The last quarter reflects an increase of Revenue of 28% when
compared with the same three month trading period in the prior year. This
increase has resulted from our previously mentioned revenue enhancement
program, which the company implemented.
Earnings for the third quarter of the 2008 year amount to R3,510,912 after
tax when compared to R1,995,228 for the three month comparative period, an
increase of 76%. Profit before taxation for the 9 month year to date shows
an improvement of 18.4% when compared to prior period nine month results.
The after tax Earnings Per Share (EPS) for this nine month period is 8.66%
up and amounts to 19.57 cents per share with a comparative EPS of 18.01
cents per share.
Included in the taxation figure is year to date Secondary Tax on Companies
(STC) of R698,670 arising on the 18 cents per share dividends paid by
TeleMasters in the current year. This makes up 22.69% of the increase in
the tax charge in the current 9 month period when compared to prior nine
month period.
The increase in Revenue in the current period is a result of mostly organic
growth by the company with a small element relating to the intangible asset
- a customer base acquired during the period at a final cost of R1,491,228
which addition was financed from the cash flows of the company. The
intangible asset is being amortised at approximately 33.3% per annum.
The company remains cash positive with a good liquidity position. The Net
Asset Value (NAV) per share increased by 27% when compared with the balance
sheet as at the comparative date. After paying dividends of 18 cents year
to date and settling the purchase consideration for the customer base, the
cash reserves of TeleMasters have increased by 9.57%.
The company remains un-geared but for a few instalment sale agreements,
profitable and cash generative.
1.3. Dividends
The board is satisfied with the performance and has declared that a further
quarterly interim dividend of 3 cents per share ("the dividend") be paid to
all shareholders recorded in the share register of the company at the close
of business on Friday, 22 August 2008. The dividend per share reflected
above comprises 12 cents declared in respect of the prior year earnings and
6 cents for the first six months of the year. The directors are pleased to
advise that TeleMasters is the first company listed on the Alternative
Exchange to have adopted a policy of declaring quarterly dividends.
The dates relating to the dividend, which the directors have declared, are as
follows:
2008
Last date to trade: Friday, 15
August
Securities start trading ex dividend: Monday, 18
August
Record date to determine who receives the Friday, 22
dividend: August
Electronic transfer of funds or cheques Monday, 25
posted/CSDPs and brokers credited August
Shares may not be dematerialised of rematerialised between Monday, 18
August 2008 and Friday, 22 August 2008.
2. LITIGATION
There are currently no legal or arbitration proceedings against the Company
(including any proceedings which are pending or threatened) of which the
Company 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
Company
3. SUBSEQUENT EVENTS
There have been no significant events after the period end.
4. SHARE CAPITAL
No changes to Share Capital occurred during the period.
5. OPERATIONAL REVIEW AND OUTLOOK
Trading conditions continue to be good despite a general decline in the
South African economy. Our business is largely unaffected by the economic
decline since the nature of the business ensures that clients receive a
substantial savings on their communications costs. In declining markets we
see an increased demand for products which when implemented reduce the
operational costs of a business. We anticipate continued growth in our
dealer market which over the past period has increased by 62 to 212.
Certain of the acquisitions which we were pursuing did not realise and the
board remains committed to only pursuing acquisitions which will be cash
generative and will add value to the business. Currently we have numerous
leads in the market but nothing has yet materialised to the point of
informing the market. We are confident in TeleMasters ability to maintain
growth based on our diverse existing communications product range and track
record thus ensuring continued growth of shareholder value.
For and on behalf of the Board:
MB Pretorius BR Topham
Executive Chairman Chief Financial Officer
30 July 2008
Designated Advisor:
Arcay Moela Sponsors (Proprietary) Limited
Date: 30/07/2008 11:54:02 Produced by the JSE SENS Department.
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