Telemasters 2008 highlights:
Revenue = +18.75%
Operating profit (before tax) = +34.76%
Earnings per share = +23.75%
Headline earnings per share = +23.67%
Dividend per share = 24 cents
"It's been a really strong year for us," says Mario Pretorius, TeleMasters CEO. "It's satisfying to be discussing strong performances across every aspect of the business, especially in the context of tough global trading conditions. Overall, the 2008 results confirm the validity of our organic growth strategy."
Significantly, TeleMasters' 2008 revenue increased markedly by 18.75% with its four smaller client base acquisitions - concluded late in the year - adding just 0.16% to revenue and 0.86% to margins.
"The full effect of these acquisitions will only be felt during 2009, as the implementation dates occurred late in the financial year," says Pretorius.
The acquisitions were all made from TeleMasters' free cash flow. "In two cases, Diverse and Office & Digital, we grew the TeleMasters' expertise as the principals of two operations joined us in senior sales positions. Again, these developments are important within the context of our organic growth strategy and our commitment to avoid infrastructure spend in competition to current and future suppliers - in favour of taking on a senior role in offering the market access to the most efficient and effective connectivity technologies available."
In addition, TeleMasters ascribes its 34.76% operating profit before tax increase to its strategy of maintaining margins and focusing on increased system and operational efficiencies, even within the context of the deployment of additional staff to cater to future expansion and increased customer service levels.
Although the company's margin is approximately 20% lower than competitors, its operating margin is 50% higher, indicating double the level of staff and system efficiency. The level of profit per employee is approx R30 000 after tax per employee per month, a significant achievement in any market context. The 23.75% increase in EPS reflects the company's ability to grow the business without diluting the shareholder value.
TeleMasters, which services in excess of 3 000 corporate clients, was the first company on the JSE to start paying quarterly dividends, and has declared dividends based on a 40% dividend policy, which ranks it as one of the higher dividend yields on the JSE. The company expects to achieve full ISO 20000 status in the next financial year.
"Preparing for the certification has resulted in more streamlined procedures, less overlapping of duties and a better understanding across all our staff of the overall business operations. This has all been encapsulated in a refined and comprehensively implemented operations strategy," says Pretorius.
TeleMasters' strategy to counter the current economic downturn includes adding 100% more sales and business development managers, altering its remuneration strategy significantly and following through on its successful new initiative to increase market presence indirectly, including a strong emphasis placed on defensive strategies for customer retention and usage optimisation.
Please click here to see the tables in this TeleMasters' press release.
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