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JSE
TLM
TLM - TeleMasters Holdings Limited - Abridged Pre-Listing Statement
Telemasters Holdings Limited
(formerly Sinvent Investments 96 (Pty) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2006/015734/06)
JSE code: TLM & ISIN: ZAE000093324
("TeleMasters" or "the Company")
Abridged Pre-Listing Statement
1. INTRODUCTION
The JSE Limited has formally approved the listing of TeleMasters on the ALTX
from the commencement of trade on Monday, 12 March 2007. The shares will trade
under the abbreviated name "TeleMastr", with share code "TLM" and ISIN:
ZAE000093324.
Cellular least-cost routing ("LCR") is the "business of relaying corporate calls
to cellular numbers via like-networks instead of, by default, landlines. LCR has
been hailed as "the most strategic emerging technology" per a knowledge survey
conducted by BMI-Technology in April 2006 among large corporate companies.
2. NATURE OF BUSINESS
LCR is the business of relaying corporate calls to cellular numbers via like-
networks instead of, by default, landlines. In practice a customer will receive
cellular equipment with SIM cards from each network mounted on his PABX and the
PABX is then programmed to route all cellular calls to e.g. 083 numbers via MTN
to the MTN destination. The effect hereof is that the customer realises
approximately 37% savings versus a similar call via the incumbent Telkom. The
networks provide the capital for the equipment needed in return for contractual
obligations (24 months Vodacom and Cell C and 36 months MTN), exactly like the
current handset business.
TeleMasters (Pty) Limited signed its first contract, with Eskom Megawatt Park,
in May 1998. Since then TeleMasters has grown to 2 400 clients, distributes its
service through 106 active dealers and grows its business by an average of over
R120 000 per month. Its 31 staff are headquartered in Centurion, Pretoria with
Cape Town and Durban Sales Managers servicing the Coast. It serves both large
and SMME businesses. Most eminent amongst its clients are Eskom, the Auditor-
General, Armscor, Softline, AngloGold-Ashanti and several Government
Departments.
TeleMasters is structured around three independent and competitive "teams" each
of which is self-contained with regard to all services needed for sourcing,
implementing and sustaining the business. Staffing levels are low by industry
standards (over R4 million billing/person/annum) and the TeleMasters internal
systems are unequalled in the industry. The Company boasts uptime on client
sites of over 99% (same day fixes); 88% of clients on debit order; paperless
billing (in its 3rd year); complete integrated proprietary billing system and
highly motivated and effective staff.
What sets TeleMasters apart from all others in the industry is its unique and
completely different business model. TeleMasters proposes a guaranteed and cost-
free savings to its clients and this means total flexibility in quantity, dates,
and package types, i.e. a complete risk-free proposition. It has practised the
same model since inception and has the most vivid, transparent and extensive
reporting system in the industry. The result is loyal and informed clients with
a client loss rate of less than 3%, all factors considered. Of this percentage
70% are terminated for payment difficulties. At the same time, bad and legal
debt is less than 0,08% of turnover.
3. DIRECTORS
The full names, ages and addresses of the directors of TeleMasters are set out
below:
Director Age Business address
Mario Bronn Pretorius 49 Equity Estate Building 2
Managing Director Masters House
South African Charles de Gaulle Crescent
Highveld Park Ext 9
Centurion
Igenatius Gottlieb Bekker 46 Equity Estate Building 2
Technical Director Masters House
South African Charles de Gaulle Crescent
Highveld Park Ext 9
Centurion
Brandon Rodney Topham 35 Equity Estate Building 2
Financial Director Masters House
South African Charles de Gaulle Crescent
Highveld Park Ext 9
Centurion
Masetumo Elizabeth Moji 41 Equity Estate Building 2
Non-Executive Chairperson Masters House
South African Charles de Gaulle Crescent
Highveld Park Ext 9
Centurion
4. SHARE CAPITAL
The authorised and issued share capital of TeleMasters is set out below:
Shares R
Authorised: Ordinary shares of R0,0001 per share 500 000 000 50 000
Shares issued: Ordinary shares issued to
initial shareholders (stakeholders) at
R0,0001 per share on 7 July 2006 4 620 000 462
Shares issued: Ordinary shares issued to the vendor
at approximately 13,06 cents per share on
2 October 2006 34 440 000 3 444
Share premium 4 496 556
Shares issued: Ordinary shares issued by way
of private placing at 50 cents per share on
20 February 2007 2 940 000 294
Share premium 1 469 706
Total issued:
Ordinary shares at date of Pre-Listing Statement 42 000 000
Share capital 4 200
Share premium 5 966 262
Total 5 970 462
5. FINANCIAL INFORMATION
Pro-Forma*
12 months
Forecast Forecast ended
30 Sept 30 Sept 30 Sept
2008 2007 2006
Turnover (R`000) 137 004 139 129 815 226 124 484 562
Attributable income
(R`000) 7 728 701 7 257 747 8 721 477
Headline earnings
per share (cents) 18,40 17,28 20,76
Earnings per share
(cents) 18,40 17,28 20,76
Price : Earnings ratio
on anticipated listing
price of 150 cents
per share (times) 8,15 8,68 7,22
Earnings yield on
anticipated listing
price (%) 12,27 11,52 13,84
Net asset value
per share (cents)
based on net assets
acquired N/A N/A 15,72
Net tangible asset value
per share (cents)
based on net assets
acquired N/A N/A 15,20
Number of shares
in issue 42 000 000 42 000 000 42 000 000
Pro-Forma* Pro-Forma*
7 months 12 months
ended ended
30 Sept 28 Feb
2005 2005
Turnover (R`000) 56 582 025 83 371 225
Attributable income
(R`000) 2 366 957 3 990 207
Headline earnings
per share (cents) 5,64 9,50
Earnings per share
(cents) 5,64 9,50
Price : Earnings ratio
on anticipated listing
price of 150 cents
per share (times) 26,60 15,79
Earnings yield on
anticipated listing
price (%) 3,76 6,33
Net asset value
per share (cents)
based on net assets
acquired 11,65 8,89
Net tangible asset value
per share (cents)
based on net assets
acquired 11,65 8,89
Number of shares
in issue 42 000 000 42 000 000
* For details please refer to the pre-listing statement.
6. COPIES OF THE PRE-LISTING STATEMENT
Copies of the Pre-Listing Statement in English may be obtained any time during
normal business hours from the registered office of the Company, and the offices
of River Group and the transfer secretaries, details of which are set out below:
the registered address of the Company - Equity Estate Building 2, Masters
House, Charles de Gaulle Crescent, Highveld Park Ext 9, Centurion;
the office of River Group - 1st Floor, Parc Nouveau Building, 225 Veale Street,
Brooklyn, Pretoria; and
the office of Computershare Investor Services 2004 (Pty) Limited - Ground
Floor, 70 Marshall Street, Johannesburg.
Centurion
9 March 2007
Designated Advisor and corporate advisor
River Group
Auditors and reporting accountants
BDO Spencer Steward (CT) Inc
Chartered Accountants (SA)
Registered Accountants and Auditors
Date: 09/03/2007 14:31:55 Produced by the JSE SENS Department.
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