TeleMasters Holdings Ltd. Trade Ideas — JSE:TLM

Our opinion on the current state of TELEMASTR(TLM)Telemaster (TLM) is a company that provides voice, data, and cloud communication services through a variety of offerings, including fixed line, fixed cellular, fixed data, and PBX services. The company operates through three main divisions: voice, cloud PBX, and internet. Its business consists of four key entities: 1. Catalytic Connections (Pty) Limited: A diversified ICT managed solutions provider serving medium and small enterprises. 2. Contineo Virtual Communications (Pty) Limited: Operates a Next Generation Unified Communications (UC) platform based on Cisco Broadsoft technology. 3. PerfectWorx Consulting (Pty) Limited**: A niche network systems integrator. 4. Ultra Data Centre (Pty) Limited: Built and operates a data centre located outside Pretoria. In its results for the year ending 30th June 2024, Telemaster reported a 6.7% decline in revenue and a 16.05% drop in headline earnings per share (HEPS). The company is very thinly traded, with only around R2,000 worth of shares changing hands daily due to most of the shares being held by a single shareholder—the Maison D-Obsession trust. This lack of liquidity makes the stock impractical for private investors, as it is difficult to trade in meaningful volumes. While the company may have some attractive elements in its service offerings and divisions, the thin trading volume presents a significant challenge for potential investors looking for liquidity and flexibility in their investments.

Our opinion on the current state of EOH Telemasters (TLM) operates in the telecommunications sector, providing voice, data, and cloud communication services through various technologies and divisions. The company's offerings include fixed line, fixed cellular, fixed data, and PBX services, catering primarily to medium and small enterprises. Telemasters comprises several divisions, each focusing on specific aspects of ICT solutions and services: 1. Catalytic Connections (Pty) Limited: This division offers diversified ICT managed solutions targeted at medium and small enterprises. 2. Contineo Virtual Communications (Pty) Limited: It operates a Next Generation Unified Communications (UC) platform based on Cisco Broadsoft technology, providing advanced communication solutions. 3. PerfectWorx Consulting (Pty) Limited: This division specializes in network systems integration, offering niche services in this domain. 4. Ultra Data Centre (Pty) Limited: Telemasters owns and operates a data center located outside of Pretoria, catering to the growing demand for data storage and management services. In its financial results for the six months ending on December 31, 2023, Telemasters reported a slight decline in revenue but managed to achieve positive headline earnings per share (HEPS) compared to a loss in the previous period. The company highlighted the maintenance of a gross profit margin of 56% and efficient cost control measures resulting in a decrease in operational expenses. However, Telemasters' shares are thinly traded, with limited liquidity in the market, as a significant portion of the shares is held by a single shareholder, the Maison D-Obsession trust. This limited trading volume may make it impractical for private investors to actively participate in buying or selling shares of Telemasters. Overall, while Telemasters operates in a vital sector and has reported improved financial performance, its low liquidity and concentrated ownership structure may pose challenges for individual investors looking to engage with the company's shares.

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.

Our opinion on the current state of TLM Telemasters Holdings Limited (TLM) operates as a comprehensive provider in the telecommunications sector, offering a variety of voice, data, and cloud communications solutions. Its operational structure is organized into three primary divisions: voice, cloud PBX, and internet. The company encompasses several subsidiaries, each specializing in distinct areas of ICT managed solutions, Unified Communications (UC) platforms, network systems integration, and data center operations. These subsidiaries include Catalytic Connections (Pty) Limited, Contineo Virtual Communications (Pty) Limited, PerfectWorx Consulting (Pty) Limited, and Ultra Data Centre (Pty) Limited, the latter of which has established a data center outside Pretoria. For the fiscal year ending 30th June 2023, Telemasters reported a slight decrease in revenue by 1.3%, alongside a notable improvement in headline earnings per share (HEPS) from a loss of 3.73c in the previous year to a gain of 0.81c. This turnaround to operating profit, with a year-on-year improvement of R2.8 million, highlights the company's successful recovery and operational efficiency. The data center business, in particular, has emerged as a growing and profitable segment, contributing to the overall improvement in earnings before interest, taxes, depreciation, and amortization (EBITDA), which rose to R8 million from R7 million in the prior year. Additionally, Telemasters has maintained its dividend policy, declaring dividends of 0.85 cents per share during the year. Looking ahead to the six months ending 31st December 2023, Telemasters has projected at least a 100% increase in HEPS, signaling strong performance and optimism for its future operations. However, the company's stock is characterized by limited liquidity, with daily trading volumes of less than R1400, primarily due to the majority of shares being held by a single shareholder, the Maison D-Obsession Trust. This concentration of ownership poses a significant challenge for private investors, making it impractical to engage in trading Telemasters shares due to the difficulties in executing trades and the potential impact on share price from small transactions. Despite these trading challenges, Telemasters' operational advancements and strategic focus on profitable segments like its data center business demonstrate its potential for growth and stability within the telecommunications sector. Investors and market watchers may find Telemasters an interesting case of a company achieving operational turnaround and growth in specific niches, although the practical aspects of investing in such a thinly traded stock require careful consideration.

Our opinion on the current state of TLM Telemasters (TLM) is a company which supplies voice, data and cloud communications using fixed line, fixed cellular, fixed data, and PBX services. It has three divisions - voice, cloud PBX and internet. The business consists of (1) Catalytic Connections (Pty) Limited is a diversified ICT managed solutions provider to medium and small enterprises. (2) Contineo Virtual Communications (Pty) Limited operates a Next Generation Unified Communications (“UC”) platform based on Cisco Broadsoft technology. (3) PerfectWorx Consulting (Pty) Limited is a niche network systems integrator. (4) Ultra Data Centre (Pty) Limited built and operates a data centre located outside of Pretoria. In its results for the year to 30th June 2023 the company reported revenue down 1,3% and headline earnings per share (HEPS) of 0,81c compared with a loss of 3,73c in the previous year. The company said, "Operating profit was restored from the prior year operating loss, with an improvement of R2.8 million year on year. • The DataCentre business is now growing and producing sustainable profits. • EBITDA continues to grow improving to R8 million from R7 million in the prior year. • The dividend policy has been maintained with dividends of 0.85 cents per share declared during the year". The share is very thinly traded with less than R2000 worth of shares changing hands each day because most of the shares are held by a single shareholder - the Maison D-Obsession trust. This makes it impractical for private investors.

Our opinion on the current state of TLM Telemasters (TLM) is a company which supplies voice, data and cloud communications using fixed line, fixed cellular, fixed data, and PBX services. It has three divisions - voice, cloud PBX and internet. The business consists of (1) Catalytic Connections (Pty) Limited is a diversified ICT managed solutions provider to medium and small enterprises. (2) Contineo Virtual Communications (Pty) Limited operates a Next Generation Unified Communications (“UC”) platform based on Cisco Broadsoft technology. (3) PerfectWorx Consulting (Pty) Limited is a niche network systems integrator. (4) Ultra Data Centre (Pty) Limited built and operates a data centre located outside of Pretoria. In its results for the six months to 31st December 2022 the company reported revenue down 5,1% and a headline loss of 1,02c per share compared with a loss of 1,68c in the previous period. The company said, "Sales in two of the four markets that the Group serves were down on the previous period in line with the rest of the market. The total minutes of corporate airtime used fell as customer staff usage levels have not recovered". In a trading statement for year to 30th June 2023 the company estaimated that headline earnings per share (HEPS) would be 0,81c compared with a loss of 3,73c in the previous year. The share is very thinly traded because most of the share are held by a single shareholder - the Maison D-Obsession trust. This makes it impractical for private investors.

TeleMasters Holdings Ltd.

TLM trade ideas