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TLM
TLM
TLM - Telemasters - Unaudited condensed consolidated interim results for the
three and six month periods ended 31 March 2011
TELEMASTERS HOLDINGS LIMITED AND ITS SUBSIDIARY
(Incorporated in the Republic of South Africa)
(Registration number 2006/015734/06)
Share code: TLM & ISIN Number: ZAE000093324
("TeleMasters" or "the Company")
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE THREE AND SIX MONTH
PERIODS ENDED 31 MARCH 2011
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited Unaudited Unaudited Unaudited
3 months ended 3 months 6 months 6 months
31 March 2011 ended ended ended
31 March 31 March 31 March
2010 2011 2010
R R R R
Revenue 71 765 702 54 538 625 157 996 272 117 466 515
Cost of sales (58 690 803) (45 249 (131 682 (98 082 181)
049) 599)
Gross profit 13 074 899 9 289 576 26 313 673 19 384 334
Operating expenses (7 950 281) (8 528 379) (16 122 (13 944 003)
042)
Operating profit 5 124 618 761 197 10 191 631 5 440 331
Investment income 206 107 226 989 418 475 426 591
Finance costs (123 829) (188 726) (215 448) (325 625)
Profit before 5 206 896 799 460 10 394 658 5 541 297
taxation
Taxation (1 987 245) (333 309) (3 794 689) (1 894 601)
Profit for the period 3 219 651 466 151 6 599 969 3 646 696
Total comprehensive 3 219 651 466 151 6 599 969 3 646 696
income for the period
Basic earnings per 15.71 8.68
share (cents) 7.67 1.11
Diluted earnings per 15.71 8.68
share (cents) 7.67 1.11
Headline earnings
reconciliation:
Profit for the period 3 219 651 466 151 6 599 969 3 646 696
Adjustments: - 43 298 (19 315) 43 298
(Profit)/loss on
disposal of property,
plant and equipment
Headline earnings for 3 219 651 509 449 6 580 654 3 689 994
the period
Headline earnings per 7.67 1.21 15.67 8.79
share (cents)
Diluted headline 7.67 1.21 15.67 8.79
earnings per share
(cents)
Weighted average 42 000 000 42 000 000 42 000 000 42 000 000
shares in issue
Dividends declared 4.00 4.00 8.00 8.00
per share (cents)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited at Audited at
31 March 2011 30 September
2010
R R
ASSETS
Non-current assets
Property, plant and equipment 15 435 884 16 600 971
Intangible assets 2 364 356 2 842 631
Goodwill 2 686 779 2 686 779
Deferred tax assets 4 875 188 3 860 944
Total non-current assets 25 362 207 25 991 325
Current assets
Trade and other receivables 19 625 201 18 726 561
Cash and cash equivalents 24 829 129 20 144 204
Total current assets 44 454 330 38 870 765
Total assets 69 816 537 64 862 090
EQUITY AND LIABILITIES
Capital and reserves
Issued capital 48 059 48 059
Retained earnings 33 259 293 30 019 324
Total equity 33 307 352 30 067 383
Non-current liabilities
Finance lease liabilities 1 120 284 2 096 728
Total non-current liabilities 1 120 284 2 096 728
Current liabilities
Trade and other payables 27 226 238 26 438 205
Current portion of finance lease 2 482 927 2 426 455
liabilities
Current tax payable 3 926 068 2 044 085
Shareholders for dividend 1 694 233 1 717 055
Bank overdraft 59 435 72 179
Total current liabilities 35 388 901 32 697 979
Total liabilities 36 509 185 34 794 707
Total equity and liabilities 69 816 537 64 862 090
Number of shares in issue 42 000 000 42 000 000
Net asset value per share (cents) 79.30 71.59
Net tangible asset value per share (cents) 67.28 58.42
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited at Unaudited at
31 March 2011 31 March 2010
R R
Cash flows from operating activities
Cash generated from operations 12 648 801 17 596 388
Finance costs (215 448) (325 625)
Tax paid (2 926 950) (9 248 436)
Net cash inflow from operating activities 9 506 403 8 022 327
Cash flows from investing activities
Property, plant and equipment acquired (943 730) (2 132 193)
Proceeds on sale of property, plant and 19 315 261 966
equipment
Investment income 418 475 426 591
Intangible assets acquired - (915 233)
Net cash outflow from investing activities (505 940) (2 358 869)
Cash flows from financing activities
Instalment sale agreements obtained 251 994 -
Dividends paid (3 382 822) (3 354 710)
Repayment of instalment sale agreements (1 171 966) (1 287 269)
Net cash outflow from financing activities (4 302 794) (4 641 979)
Net increase in cash and cash equivalents 4 697 669 1 021 479
Cash and cash equivalents at the beginning of 20 072 025 16 165 680
the period
Cash and cash equivalents at the end of the 24 769 694 17 187 159
period
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Issued Share Total share
capital premium Capital
Balance at 30 September 2009 4 200 2 143 859 2 148 059
Profit for the period ended 31 - - -
March 2010
Prior year correction of deferred - - -
tax
Dividends declared - - -
Balance at 31 March 2010 4 200 2 143 859 2 148 059
Profit for the period ended 30 - - -
September 2010
Capital distributions - (2 100 000) (2 100 000)
Dividends declared - - -
Balance at 30 September 2010 4 200 43 859 48 059
Profit for the period ended 31 - - -
March 2011
Dividends declared - - -
Balance at 31 March 2011 4 200 43 859 48 059
Retained Total
Income Equity
Balance at 30 September 2009 25 984 966 28 133 025
Profit for the period ended 31 3 646 696 3 646 696
March 2010
Prior year correction of deferred (1 899 257) (1 899 257)
tax
Dividends declared (3 360 000) (3 360 000)
Balance at 31 March 2010 24 372 405 26 520 464
Profit for the period ended 30 6 066 919 6 066 919
September 2010
Capital distributions - (2 100 000)
Dividends declared (420 000) (420 000)
Balance at 30 September 2010 30 019 324 30 067 383
Profit for the period ended 31 6 599 969 6 599 969
March 2011
Dividends declared (3 360 000) (3 360 000)
Balance at 31 March 2011 33 259 293 33 307 352
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 Unaudited Unaudited
3 months 3 months 6 months 6 months
ended ended ended ended
31 March 31 March 2010 31 March 31 March
2011 2011 2010
R R R R
Revenue by nature
Sale of airtime 71 640 929 53 193 727 157 806 804 110 021 464
Connection incentive - 45 750 5 150 4 567 237
bonuses
Other 124 773 1 299 148 184 318 2 877 814
Total revenue 71 765 702 54 538 625 157 996 272 117 466 515
Major customers
Revenues from
transactions with a
single external
customer amounting to
10 percent or more of
the Company`s
revenue, are
disclosed below:
- Customer A 6 840 228 13 988 080 16 857 954 28 456 200
- Customer B 23 182 941 - 50 317 998 -
- Other customers 41 742 533 40 550 545 90 820 319 89 010 315
Total revenue 54 538 625 157 996 272 117 466 515
71 765 702
1. COMPANY PROFILE
TeleMasters is a specialist tele-management and business communication strategy
player operating exclusively in the South African corporate market. It is now a
full ICASA licensed Service Provider. The company provides current and future
clients access to the most efficient and effective digital telecommunication
technologies.
2. FINANCIAL RESULTS
2.1 Statement of compliance and basis of preparation
The interim financial statements for the three and six months ended 31
March 2011 have been presented in accordance with the framework concepts
and the measurement and recognition requirements of International Financial
Reporting Standards, the information required by IAS 34: Interim Financial
Reporting, the South African Companies Act, as amended, the AC500 Standards
as issued by the Accounting Practices Board and the JSE Listings
Requirements. The results have been prepared in accordance with accounting
policies of the Company that are consistent with those applied in the
audited annual financial statements for the year ended 30 September 2010.
These results have not been reviewed or audited by the Company`s auditors.
2.2 Significant items included in results
New customer contract
The Company`s contract with Customer B, concluded in October 2010, runs on
a month-to-month basis. During the quarter under review, revenue earned
from this customer under the said contract totalled R23 182 941, and for
the six months ended 31 March 2011 revenue totalled R50 317 998.
Provision for doubtful debt
Due to the change in operational risk and the continuing poor market
conditions the Company increased its provision for doubtful debt from R424
958 at 30 September 2010 to R3 717 212 at 31 March 2011.
2.3. Dividends
On 22 December 2010 the board has declared a quarterly interim dividend of
4 cents per share, which was paid to all shareholders recorded in the share
register of the Company at the close of business on Friday, 21 January
2011. On 31 March 2011, and announced on 1 April 2011, the board has
declared another quarterly interim dividend of 4 cents per share, which was
paid to all shareholders recorded in the share register of the Company at
the close of business on Friday 29 April 2011.
During the comparative period ended 31 March 2010 the Company declared two
quarterly cash dividends of 4 cents each.
The board will continue with the policy of declaring quarterly dividends.
2.4. Related party transactions
The following material transactions with related parties occurred during
the quarter under review:
Unaudited Unaudited Unaudited Unaudited
3 months 3 months 6 months 6 months
ended ended ended ended
31 March 2011 31 March 2010 31 March 2011 31 March 2010
R R R R
Sales to related
parties
TeleMasters 9 083 218 13 811 700 21 961 533 28 151 470
(Pty) Ltd
Purchases from
related parties
TeleMasters 1 130 518 655 846 1 919 576 1 946 453
(Pty) Ltd
Snowy Owl 295 545 105 421 344 803 210 841
Properties 82
(Pty) Ltd
Unaudited at Audited at
31 March 2011 30 September
2010
R R
Balances owing by related parties
included in Trade and other
receivables
TeleMasters (Pty) Ltd 2 276 377 7 030 229
Balances owing to related parties
included in Trade and other payables
TeleMasters (Pty) Ltd 670 236 150 956
Snowy Owl Properties 82 (Pty) Ltd - 9 748
2.5. Acquisition of property, plant and equipment
Property, plant and equipment acquired during the quarter 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 Company as reported.
4. FUTURE PROSPECTS
The Board is confident about the future prospects of the Company, as
conversion from its traditional least-cost routing business to ICASA
licensed business takes place.
For and on behalf of the Board:
MB Pretorius E Rossouw
Chief Executive Officer Financial Director
23 June 2011
Corporate information
Directors: DS van Der Merwe*#, J Voigt*, VI Beck*#, MB Pretorius, BR Topham,
E Rossouw
(* 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 Inc.
Auditors: BDO South Africa Inc., Block C, Riverwalk Office Park, 41 Matroosberg
Avenue, Ashlea Gardens, Pretoria
Transfer secretaries: Computershare Investor Services (Proprietary) Limited,
70 Marshall Street, Johannesburg, 2001 (P.O. Box 61051, Marshalltown, 2107)
Designated Advisor: Arcay Moela Sponsors (Proprietary) Limited
Website: www.telemasters.co.za
Date: 23/06/2011 11:24:02 Produced by the JSE SENS Department.
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