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TLM
TLM
TLM - TeleMasters - Unaudited condensed consolidated interim results for the
three and nine month periods ended 30 June 2011
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 condensed consolidated interim results for the three and nine month
periods ended 30 June 2011
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited Unaudited Unaudited Unaudited
3 months 3 months 9 months 9 months
ended ended ended ended
30 June 30 June 30 June 30 June
2011 2010 2011 2010
R`000 R`000 R`000 R`000
Revenue 63 899 57 253 221 896 174 719
Cost of sales (55 323) (48 430) (187 006) (146 512)
Gross profit 8 576 8 823 34 890 28 207
Operating expenses (7 504) (5 623) (23 626) (19 567)
Operating profit 1 072 3 200 11 264 8 640
Investment income 223 194 641 621
Finance costs (51) (97) (267) (422)
Profit before taxation 1 244 3 297 11 638 8 839
Taxation (225) (1 924) (4 019) (3 819)
Profit for the period 1 019 1 373 7 619 5 020
Total comprehensive 1 019 1 373 7 619 5 020
income for the period
Basic earnings per 2.43 3.27 18.14 11.95
share (cents)
Diluted earnings per 2.43 3.27 18.14 11.95
share (cents)
Headline earnings
reconciliation:
Profit for the period 1 019 1 373 7 619 5 020
Adjustments: - 332 (19) 375
(Profit)/loss on
disposal of property,
plant and equipment
Headline earnings for 1 019 1 705 7 600 5 395
the period
Headline earnings per 2.43 4.06 18.09 12.84
share (cents)
Diluted headline 2.43 4.06 18.09 12.84
earnings per share
(cents)
Weighted average shares 42 000 42 000 42 000 42 000
in issue (`000)
Dividends declared per 5.00 - 13.00 8.00
share (cents)
Capital distribution - 2.00 - 2.00
declared per share
(cents)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited at Audited at
30 June 30 September
2011 2010
R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 14 923 16 601
Intangible assets 2 125 2 843
Goodwill 2 687 2 687
Deferred tax assets 4 732 3 861
Total non-current assets 24 467 25 992
Current assets 15 979 18 726
Trade and other receivables 26 763 20 144
Cash and cash equivalents 42 742 38 870
Total current assets
67 209 64 862
Total assets
EQUITY AND LIABILITIES
Capital and reserves
Issued capital 48 48
Retained earnings 32 178 30 019
Total equity 32 226 30 067
Non-current liabilities
Finance lease liabilities 674 2 097
Total non-current liabilities 674 2 097
Current liabilities
Trade and other payables 25 317 26 438
Current portion of finance lease 2 632 2 427
liabilities
Current tax payable 4 203 2 044
Shareholders for dividend 2 118 1 717
Bank overdraft 39 72
Total current liabilities 34 309 32 698
Total liabilities 34 983 34 795
Total equity and liabilities 67 209 64 862
Number of shares in issue (`000) 42 000 42 000
Net asset value per share (cents) 76.73 71.59
Net tangible asset value per share (cents) 65.27 58.42
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited at Unaudited at
30 June 2011 30 June 2010
R`000 R`000
Cash flows from operating activities
Cash generated from operations 16 683 22 962
Finance costs (267) (422)
Tax paid (2 731) (9 568)
Net cash inflow from operating activities 13 685 12 972
Cash flows from investing activities
Property, plant and equipment acquired (1 447) (2 711)
Proceeds on sale of property, plant and 49 1 019
equipment
Investment income 641 621
Intangible assets acquired - (27)
Investments acquired - (1 800)
Net cash outflow from investing activities (757) (2 898)
Cash flows from financing activities
Instalment sale agreements obtained 665 700
Borrowings obtained - 1 800
Repayment of instalment sale agreements (1 882) (1 960)
Repayment of borrowings - (1 700)
Dividends and capital distributions paid (5 059) (4 877)
Net cash outflow from financing activities (6 276) (6 037)
Net increase in cash and cash equivalents 6 652 4 037
Cash and cash equivalents at the beginning 20 072 16 166
of the period
Cash and cash equivalents at the end of the 26 724 20 203
period
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Issued Share Total Retained Total
share
capital premium Capital Income Equity
R`000 R`000 R`000 R`000 R`000
Balance at 30 September 2009 4 2 144 2 148 25 984 28 132
Profit for the period ended - - - 5 020 5 020
30 June 2010
Distribution of share - (840) (840) - (840)
premium
Dividends declared - - - (3 360) (3 360)
Balance at 30 June 2010 4 1 304 1 308 27 644 28 952
Profit for the period ended - - - 2 795 2 795
30 September 2010
Distribution of share - (1 260) (1 260) - (1 260)
premium
Dividends declared - - - (420) (420)
Balance at 30 September 2010 4 44 48 30 019 30 067
Profit for the period ended - - - 7 619 7 619
30 June 2011
Dividends declared - - - (5 460) (5 460)
Balance at 30 June 2011 4 44 48 32 178 32 226
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 9 months 9 months
ended ended ended ended
30 June 30 June 30 June 30 June
2011 2010 2011 2010
R`000 R`000 R`000 R`000
Revenue by nature
Sale of airtime 63 027 55 166 220 833 165 188
Connection incentive - 1 036 5 5 603
bonuses
Other 872 1 051 1 058 3 928
Total revenue 63 899 57 253 221 896 174 719
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 - 14 439 16 858 42 895
- Customer B 22 990 - 74 229 -
- Other customers 40 909 42 814 130 809 131 824
Total revenue 63 899 57 253 221 896 174 719
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 nine months ended 30 June
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 R22.9million, and for the nine months
ended 30 June 2011 revenue totalled R74.2million.
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 R0.4million at 30
September 2010 to R4.5million at 30 June 2011.
2.3. Dividends
The following dividends were declared during the year to date:
- First quarter: A dividend of 4 cents (2010: 4 cents) per share was declared
on 22 December 2010 and paid to all shareholders recorded in the share
register of the Company at the close of business on Friday, 21 January
2011;
- Second quarter: A dividend of 4 cents (2010: 4 cents) per share was
declared on 31 March 2011 and paid to all shareholders recorded in the
share register of the Company at the close of business on Friday 29 April
2011;
- Third quarter: A dividend of 5 cents per share was declared on 22 June 2011
and paid to all shareholders recorded in the share register of the Company
at the close of business on Friday 15 July 2011. During the third quarter
of the prior year a capital distribution from share premium of 2 cents per
share was declared.
- Fourth quarter: A dividend of 4 cents per share will be declared on
27 September 2011, and will be paid to all shareholders recorded in the
share register of the Company at the close of business on Friday 21 October
2011. During the fourth quarter of the prior year a capital distribution
from share premium of 3 cents per share plus a cash dividend of 1 cent per
share was declared.
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 9 months 9 months
ended ended ended ended
30 June 30 June 30 June 30 June
2011 2010 2011 2010
R`000 R`000 R`000 R`000
Sales to related
parties
TeleMasters (Pty) Ltd 285 14 338 22 246 42 489
Unaudited Unaudited Unaudited Unaudited
3 months 3 months 9 months 9 months
ended ended ended ended
30 June 30 June 30 June 30 June
2011 2010 2011 2010
R`000 R`000 R`000 R`000
Purchases from related
parties
TeleMasters (Pty) Ltd 14 671 1 933 2 617
Snowy Owl Properties 82 349 105 694 316
(Pty) Ltd
Unaudited at Audited at
30 June 2011 30 September 2010
R`000 R`000
Balances owing by related parties
included in Trade and other receivables
TeleMasters (Pty) Ltd 1 531 7 030
Balances owing to related parties
included in Trade and other payables
TeleMasters (Pty) Ltd - 151
Snowy Owl Properties 82 (Pty) Ltd - 10
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
continues to take place.
For and on behalf of the Board:
MB Pretorius E Rossouw
Chief Executive Officer Financial Director
27 September 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: 27/09/2011 10:40:01 Produced by the JSE SENS Department.
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