Telkom's share price jumped higher in the early session of trade on the Johannesburg Stock Exchange today. It increased to R38.50, a gain of more than four percentage points, or 160c, in active trade.
Dealers say investors were looking at the fact that Telkom was continuing to pay out dividends gleaned from its R40.5 billion unbundling of mobile network operator Vodacom.
In its results for the year ended 31 March, Telkom stated a special dividend had been declared from Vodacom proceeds of 175c per share. The normal dividend declared increased 8.7%, to 125c per share from 115c per share.
This is despite its normalised headline earnings per share from continuing operations decreasing by 11.2%, to 473c, and normalised basic earnings per share decreasing by 12%, to 425.2c per share.
“Investors are certainly looking at being paid out in those dividends and that, and the fact the market overall has begun well today, has helped the Telkom share price,” says a dealer at BJM Securities.
A dealer at another securities firm says the share price is not expected to make real long-term gains due to the overall poor performance of Telkom's results.
“We are still awaiting our analysts' report on the results, but it seems Telkom is not the long-term bet it once was,” he says.
The dealer also says these results are beginning to show just how dependant Telkom was on Vodacom for profit in preceding years when it owned 50% of the mobile operator.
Trade in Telkom's shares was active, with more than one million changing hands in the first four hours of today's session. The average day's trade for the past six months is around 2.5 million shares.
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