Our opinion on the current state of TLM

Telemasters (TLM) is a provider of voice, data, and cloud communications services, offering fixed line, fixed cellular, fixed data, and PBX solutions. Its operations are divided into three main divisions:

1. Catalytic Connections (Pty) Limited, a diversified ICT managed solutions provider catering to medium and small enterprises.
2. Contineo Virtual Communications (Pty) Limited, which operates a Next Generation Unified Communications platform based on Cisco Broadsoft technology.
3. PerfectWorx Consulting (Pty) Limited, a specialized network systems integrator.
4. Ultra Data Centre (Pty) Limited, responsible for building and operating a data centre located outside of Pretoria.

In its financial results for the year ending June 30, 2023, Telemasters reported a slight decline in revenue by 1.3% but saw a significant improvement in headline earnings per share (HEPS), which stood at 0.81c compared to a loss of 3.73c in the previous year. The company noted several positive developments:
- Operating profit recovered from the prior year's loss, showing an improvement of R2.8 million year-on-year.
- The DataCentre business experienced growth and is now generating sustainable profits.
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) continued to grow, increasing to R8 million from R7 million in the prior year.
- Telemasters maintained its dividend policy, declaring dividends of 0.85 cents per share during the year.

In a trading statement for the six months ending December 31, 2023, the company estimated a significant increase in HEPS by 160%. However, it's worth noting that the share is thinly traded, with less than R1400 worth of shares changing hands each day. The majority of shares are held by a single shareholder, the Maison D-Obsession trust, which may make it impractical for private investors to trade.