Alt-X listed telecommunications group Telemasters Holdings (TLM) on Tuesday reported diluted headline earnings per share rose to 23.8 cents for the year ended September 2011 from 19.36 cents the previous year.<\/p>\n
Revenue rose to R268.1 million from R236.9 million and profit for the year advanced to R10.0 million from R7.81 million.<\/p>\n
The company characterised the past financial year as a transitional operational period. Due to the changes in the telecoms environment, the technology utilised by the Group to provide telecommunication access to its clients is being upgraded to that of a fully licensed fixed line operator.<\/p>\n
This transition is taking place at clients where greater savings can be offered by embracing the new technology which the company has implemented to make cost efficient, clear and reliable voice calls.<\/p>\n
“Thus we utilise different platforms for different clients depending on the circumstances and needs of the client. This transition is taking longer than expected due to various system and sales changes we have needed to develop,” it said.<\/p>\n
“The changing of the platform away from pure cellular least-cost routing has meant a greater investment in time and to a lesser degree capital, to tweak the offering which has only become fully marketable in the last quarter of the year. This change is important for the Group in the longer term as the margins from the fixed lineoperation are more sustainable and potentially more profitable,” it said.<\/p>\n
It added that the revenue growth of 13% was on the back of the sale of airtime to a large once off client. These sales of R85.2 million are not expected to be a recurring business in the new year.<\/p>\n
“The growth and stabilisation of the Group’s revenue in the new year is anticipated to be on the back of our fixed line platform. The reduction in the differential due to changes in the interconnect rates resulted in smaller clients agreements being mutually terminated.<\/p>\n
“Our business model remains strictly based on ensuring that healthy operating margins take preference over revenue which is not profitable. We believe that our pruning efforts will assist in the growth in the coming years as our Group’s attention will not be misdirected to poor profitability business relationships,” it added.<\/p>\n
The company pays quarterly dividends and a dividend of 4 cents per share was declared on 23 September 2011 for the fourth quarter. For the first quarter of 2012 a dividend of 1 cent per share has been declared. The board will continue with the policy of declaring quarterly dividends.<\/p>\n
Looking ahead, the company is confident about its future prospects as the conversion from its traditional cellular least-cost routing business to an ICASA licensed business continues to take place.<\/p>\n
However the Board points out that the conversion process will take a longer period before the increased profitability will be realised. This, combined with the poor trading conditions currently in South Africa, has resulted in the Board taking a cautious view regarding the working capital and prudently deciding to recommend a lower dividend than previously paid.<\/p>\n
This will have the effect that the group is able to self-fund the switch-over to the services of a fixed line operator.<\/p>\n
“The Board will take every effort to ensure that the Group remains profitable and cash flush but cautions shareholders that dividends may be lower during the next few quarters until trading conditions improve,” it said.<\/p>\n","protected":false},"excerpt":{"rendered":"
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