| Thu 17 Sep 2009, 8:22 | | TLM - Telemasters - Interim results for the nine month period ended 30 June 2009 |
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TLM
TLM
TLM - Telemasters - Interim results for the nine month period ended 30 June 2009
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 INTERIM RESULTS FOR THE NINE MONTH PERIOD ENDED 30 JUNE 2009 AND
DECLARATION OF INTERIM DIVIDEND
INCOME STATEMENT Unaudited
Unaudited
9 months 9 months
ended ended
30 June 30 June
2009 2008
R R
Revenue 170,379,404 128,391,974
Cost of sales -143,909,732 -
106,684,757
Gross profit 26,469,672 21,707,217
Operating expenses -12,974,491 -9,829,758
Operating profit 13,495,181 11,877,459
Investment income 882,533 878,097
Finance costs -226,562 -153,634
Profit before taxation 14,151,152 12,601,922
Taxation -4,242,544 -4,381,805
Attributable earnings for the 9,908,608 8,220,117
period
Reconciliation of headline
earnings:
Attributable earnings 9,908,608 8,220,117
Adjustments: 0 0
Headline earnings 9,908,608 8,220,117
Weighted average shares in issue 42,000,000 42,000,000
(`000)
Headline earnings per share 23.59 19.57
(cents)
Earnings per share (cents) 23.59 19.57
Dividends paid per share (cents) 4.00 18.00
BALANCE SHEET Unaudited at Unaudited at
30 June 30 June
2009 2008
ASSETS
Non-current assets
Intangible assets 4,778,937 1,679,618
Property, plant and equipment 14,805,312 9,057,162
Deferred tax 814,768 -
20,399,017 10,736,780
Current assets
Trade and other receivables 19,660,448 16,943,564
Cash and cash equivalents 13,519,123 12,378,088
33,179,571 29,321,652
Total assets 53,578,588 40,058,432
EQUITY AND LIABILITIES
Total equity
Share capital 2,148,059 5,508,059
Retained earnings 23,170,145 11,673,642
25,318,204 17,181,701
Non-current liabilities
Deferred tax - 376,293
Installment sale agreements 3,283,176 613,663
3,283,176 989,956
Current liabilities
Current portion of long term 1,806,435 571,658
liabilities
Current tax payable 4,656,709 3,377,362
Bank overdraft 48,451 -
Dividend payable 1,684,241 30,621
Provisions 156,875 172,939
Trade and other payables 16,624,497 17,734,195
24,977,208 21,886,775
Total equity and liabilities 53,578,588 40,058,432
Number of shares in issue (`000) 42,000,000 42,000,000
Net asset value per share (cents) 60.28 40.91
Net tangible asset value per share 48.90 36.91
(cents)
CASH FLOW STATEMENTS Unaudited at Unaudited
at
30 June 2009 30 June
2008
R R
Cash flows from operating activities
Cash generated from operations 13,008,176 9,526,386
Finance costs -226,562 -153,634
Tax paid -6,383,201 -5,069,566
Net cash from operating activities 6,398,413 4,303,186
Cash flows from investing activities
Expenditure to expand operating
activities
Property, plant and equipment -6,260,338 -3,485,530
acquired
Investment income 882,533 878,097
Sale of financial asset - 19
Intangible assets acquired -2,926,988 -1,565,306
Net cash from investing activities -8,304,793 -4,172,720
Cash flows from financing activities
Proceeds on share issue - -
Proceeds from borrowings 2,608,982 1,138,956
Dividends paid -1,680,000 -7,560,000
Shareholders for dividend 1,684,241 30,621
Share premium repaid -3,360,000 -
Repayment of borrowings -876,926 -692,880
Net cash from financing activities -1,623,703 -7,083,303
Total cash movement for the period -3,530,083 -6,952,837
Cash at beginning of period 17,000,755 19,330,925
Total cash at end of the period 13,470,672 12,378,088
STATEMENT OF CHANGES IN
SHAREHOLDERS` EQUITY
Share Share Total Retained Total
share
capital premium capital income
Balance at 30 4,200 5,503,859 5,508,059 11,013,525 16,521,584
September 2007
Dividends paid - - - - 7,560,000 - 5,040,000
Net profit for the - - - 8,220,117 8,220,117
period ended 30
June 2008
Balance at 30 June 4,200 5,503,859 5,508,059 11,673,642 17,181,701
2008
Dividends paid - - - -2,520,000 -2,520,000
Net profit for the - - - 5,787,895 5,787,894
period ended 30
September 2008
Balance at 30 4,200 5,503,859 5,508,059 14,941,537 20,449,596
September 2008
Dividends paid - - - -1,680,000 -1,680,000
Share premium - - 3,360,000 - -3,360,000
repaid 3,360,000
Net profit for the - - - 9,908,608 9,908,608
period ended 30
June 2008
Balance at 30 June 4,200 2,143,859 2,148,059 23,170,145 25,318,204
2009
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
2009 2008
R R
Revenue by Nature
Commissions earned on airtime 156,649,934 118,688,128
Connection incentive bonuses 10,828,638 9,668,757
Other 2,900,832 35,089
170,379,404 128,391,974
Major customers
Revenues from transactions with a
single external customer accounting
to 10 percent or more of the
company`s revenue, are disclosed
below:
- Sales of airtime - Customer A - 17,462,141
- Sales of airtime - Customer B 48,818,265 13,864,102
- Commission and connection 121,561,139 97,065,731
incentive bonus with other customers
170,379,404 128,391,974
1. FINANCIAL RESULTS
1.1 Statement of compliance and basis of preparation
The consolidated interim financial statements for the nine months ended 30 June
2009 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 are consistent with the previous period and 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 32.70% compared with the comparative nine
month period. This increase has resulted from our internal revenue enhancement
program, organic growth and the additional revenue resulting from the client
bases acquired during this financial year.
Earnings for the third quarter of the 2009 year amount to R9,908,608 after tax
when compared to R8,220,117 for the nine month comparative period, an increase
of 20.54%. The Earnings Per Share (EPS) for this nine month period amounts to
23.59 cents per share with a comparative EPS of 19.57 cents per share.
The company has invested in the growth of the company by acquiring intangible
assets of R2,926,988 during the current year and fixed assets of R6,260,338.
This R9,187,326 total investment to expand the operations of the business has
been funded from the cash flow of the business with only 28%, R2,608,982, being
funded with long term borrowings. This together with the total of 12 cents per
share which has paid out in the form of dividends and capital distributions
indicates the optimal management of working capital of the business.
The company maintains a strong focus on managing the trade receivables to ensure
that the effects of the current recession do not affect the results of our
operations in any significant manner. We have however noted a small increase in
customers who are not meeting their repayment obligations in the manner in which
we expect. We have taken steps to reduce our risks by insisting on upfront
payments from higher risk clients and we also choose to not do business in
certain industries. This has ensured that our trade receivables have only
increased by 16% despite an increase in Revenue of 32.70%. Our current ratio
remains healthy at 1:0.75 despite the large investments as indicated above.
The increase in Revenue has resulted in an increase in operating costs. A larger
element of fixed remuneration for sales staff was included in the current
financial year when compared with the prior period. Recent changes to the
structuring will result in an almost negligible fixed cost component again with
the majority of sales staff salary structures reverting to a variable nature
which will be reported once again as a cost of sale in future periods as was
done in the prior period. The increase in assets has resulted in a higher
depreciation and amortisation charge being included in the current period as
compared to in the prior period.
The company remains cash positive with a good liquidity position. The Net Asset
Value (NAV) per share increased by 47.36% when compared with the balance sheet
as at the comparative date. The total value paid to shareholders in the current
period of 12 cents per share would represent a further 29.33% growth in NAV has
these amounts been maintained in the company. The company whilst not maintaining
a fixed dividend policy remains committed to ensure that a portion of the
profits are distributed quarterly to our shareholders.
1.3. Dividends
The board is satisfied with the performance and has declared that a further
quarterly interim dividend of 4 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, 09 October 2009 September 2009. The dividend per share
reflected above of 4 cents per share was paid during the first quarter of this
financial year and excludes the capital redemption of 8 cents paid during the
second and third quarters. The total dividend and capital distribution to
shareholders in the current year will then amount to 16 cents per share.
The dates relating to the dividend, which the directors have declared, are as
follows:
2009
Last date to trade: Friday, 02
October
Securities start trading ex dividend: Monday, 05
October
Record date to determine who receives Friday, 09
the dividend: October
Electronic transfer of funds or cheques Monday, 12
posted/CSDPs and brokers credited October
Shares may not be dematerialised of rematerialised between Monday, 05 October
2009 and Friday, 09 October 2009.
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 other than for capital
distribution totaling 8 cents per share to shareholders from the share premium
account in terms of a special resolution adopted at the last AGM of the company.
The total reduction of share premium as a result amounted to R3,360,000.
5. OPERATIONAL REVIEW AND OUTLOOK
The company has shown a remarkable tenacity in during the recession and the
effect of the strategies implemented by the Board resulted in a growth of 32% in
Revenue. Internally the focus on increasing margins was successful. The company
focus on core customers and pursued new clients in growing industries. The belt
tightening programmes of customers also ensured that our business offering found
very fertile ground. These practices and relationships ensures that the board
remains confident of the prospects and continued growth of the company.
For and on behalf of the Board:
MB Pretorius BR Topham
Chief Executive Officer Chief Financial Officer
15 September 2009
Designated Advisor:
Arcay Moela Sponsors (Proprietary) Limited
Date: 17/09/2009 08:22:09 Produced by the JSE SENS Department.
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