Recently cited by the Red Hot Penny Shares portfolio as a 'raging bull', telecommunications specialist TeleMasters released another strong set of interim results for the first six months of the 2009 financial year...
TeleMasters' revenue is up 38.2% compared to the previous reporting period, while earnings per share have increased by an impressive by 43.3%.
“A portion of the increase in revenue is due to acquisitions made towards the end of the last financial year, at the start of the current financial period,” says CEO Mario Pretorius. “The rest of the revenue growth, however, comes as a result of our revenue enhancement programme. We've been pretty aggressive on this front, which has resulted in optimised revenue streams.”
TeleMasters acquired a portion of the business of One Communications (registered as African Paradigm Communications (Pty) Ltd) in October 2008, reinforcing the company's least-cost routing operations. The acquisition was in line with TeleMasters' strategy to grow its least-cost routing presence organically and through acquisitions.
The TeleMasters board declared a first quarter interim dividend of 4c per share, paid to all shareholders recorded in the share register of the company at the close of business on Friday, 16 January 2009. In addition, the directors declared a capital distribution of 4c per share to shareholders from the company's share premium reserves. Paying a capital distribution to shareholders in lieu of a dividend saved TeleMasters secondary tax to the amount of R168 000 - equivalent to increased earnings of 0.4c per share.
The board will continue with its policy of declaring quarterly capital distributions or dividends. It has also decided to discontinue a formal dividend policy, with effect from 1 April 2009.
TeleMasters remains cash positive and continues to enjoy strong liquidity. Net asset value (NAV) per share increased by 47.25% over the comparative period; 29% of recent acquisitions have been financed with borrowings, with the balance financed by internally generated cash flows. The bulk of the company's income is annuity-based, and looks likely to remain so for the foreseeable future.
“The positive results can be attributed to the continued focus on driving our business model,” adds Pretorius. “Aside from ensuring tight controls on expenditure, the model pushes continued efforts to ensure top level delivery to our customer base. In plain English, that means we're always pushing to work smarter and to find more efficient ways to operate, to the benefit of our clients. We believe this is the best strategy to follow, regardless of whether the economy is in a slump or not. Our aggression on this front will continue, and we expect the approach to carry on delivering strong results.”
Please click here to see Telemaster's interim results
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