Despite difficult trading conditions and compressed margins, JSE-listed TeleMasters Holdings saw revenue and headline earnings per share (HEPS) jump for the year ending 30 June.
The converged telecoms operator says revenue increased by 14% year-on-year to R120.6 million, while HEPS rose by 21% to 5.85cps.
"The average price of voice minutes sold keeps declining and the pressure of a free-market is evident in the widespread lowering of the retail prices on most telecommunication services. This pressure compresses margins," the group says in its results statement released this morning.
The TeleMasters board was pleased with the direction of the results in terms of sales, profits and cash flow "in spite of the pressure of gross margins across all products".
Profit for the year rose 22% to almost R2.5 million and cash generated from operations increased by 158.5% to R7.6 million.
During the past year, the company paid four dividends totalling 2cps and will pay a further 1cps to all shareholders later this month. During the comparative year which ended 30 June 2016, the company declared four dividends totalling 3cps.
During the past financial year, CFO Brandon Topham resigned and Talana Smith was appointed to the role with effect from 1 March. However, subsequent to year-end, Smith resigned "in order to pursue an opportunity in the property industry".
TeleMasters says Topham, who continued to serve on the board after his resignation, has agreed to act in the capacity of CFO until a new appointment is made.
Prospects
"The intense competition in the telecommunication market has led to a number of closures and consolidations in the industry. The expectation is that retail prices offered by market participants will dwindle as new value-added offerings are launched into the market," the company says.
The group, however, says data and broadband services have taken off very well and form the backbone of its services.
TeleMasters believes the roll-out of optic fibre and WiFi services across business districts is the key to future growth for the company. It remains supplier-agnostic, providing services over multiple fibre and related carrier types with a variety of equipment.
It says a change in the business model will be rolled out in the coming year that should enhance its reach to potential customers, ease cash flow pressures and advance new technology over its customer base.
"The acceptance rate of digital data and voice services is accelerating and the company is determined to carve out a larger unique niche of satisfied, life-long customers," it says.
TeleMasters has been listed on the JSE's Alternative Exchange since 2007 and is licensed to provide voice, data and cloud-based corporate communications. It supplies fixed-line, fixed cellular, fixed data and virtual PBX services across South Africa.
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