TeleMasters on Tuesday (18 December) reported an operating loss of \u00a0R5.52 million\u00a0for the year ended September 2012, from a prior profit of R14.42 million.<\/p>\n
The group said that revenues from its dwindling fixed cellular base (using Least Cost Routing\u00a0technology) declined 36% in part due to the expiration of tenders.<\/p>\n
Revenue dropped to R171.29 million, from R268.14 million in 2011.<\/p>\n
TeleMasters reported headline earnings and diluted headline earnings per share of 0.17 cents, from 23.80 cents before.<\/p>\n
The group is licensed to provide voice, data and cloud-based corporate communication. It supplies fixed-line, fixed cellular, fixed data and virtual PBX services countrywide.<\/p>\n
TeleMasters says it\u00a0is converting clients\u00a0and new clients onto the new technology platform, which is called Digital Direct. Over the past year\u00a0the group said it has tested and amended this technology to the point that it is now satisfied that this\u00a0technological offering is of the highest quality for voice communications.<\/p>\n
“The result of the decrease in revenue had an impact on the gross profit and margin. To counter this\u00a0lower gross profit the group undertook cost cutting in the company, including retrenchments and\u00a0voluntary cuts in the directors\u00b4 salaries.<\/p>\n
“The business has been re-alligned for a change in how it\u00a0operates as many skills needed to embrace the Digital Direct communications solution are different\u00a0from those applied in the past,” TeleMasters said in a statement.<\/p>\n
However, the group noted that the downside of Digital direct is that it requires a far higher capital\u00a0installation cost. This, it said, is reflected in the fact that the group invested R7.3 million in equipment\u00a0and software over the past year when compared with the R2.7 million in the 2011 financial year.<\/p>\n
Despite the lower operating margin and operating loss the board highlighted a profit for
\nthe year of R22.7 million.<\/p>\n
A dividend of one cent per share was declared, against\u00a0four cents in 2011.<\/p>\n
Looking ahead,\u00a0TeleMasters said it\u00a0has completed a full year of transition from a fixed cellular agency to a fully Icasa\u00a0licensed fixed line Telco and is progressing positively towards operational profitability in this offering.<\/p>\n
The company pointed out that it has invested in a unique set of technologies that delivers the highest quality of voice. It\u00a0has successfully implemented its Virtual PBX service and rolled this out profitably.<\/p>\n
“A number of\u00a0restrictive technical hurdles were overcome and it is rolling out virtual uncontended access lines that\u00a0offer a remarkable increase in clarity and stability over existing lines. Its capacity to commission\u00a0installations and solve technical difficulties has reached the required standard for ramping-up\u00a0expansion.<\/p>\n
“The coming year is expected to see the fruits of the past year\u00b4s innovation and testing. Not only is the company able to bring a higher quality solution to clients but the margins to the group utilising this\u00a0technology are far higher than what was earned in the past using LCR,” TeleMasters said.<\/p>\n
TeleMasters in delisting u-turn<\/strong><\/a><\/p>\n