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AFRICAN MEDIA ENTERTAINMENT LIMITED - Reviewed results for the year ended 31 March 2013

Release Date: 14/06/2013 09:47
Code(s): AME     PDF:  
Wrap Text
Reviewed results for the year ended 31 March 2013

AFRICAN MEDIA ENTERTAINMENT LIMITED
Incorporated in the Republic of South Africa
Registration number 1926/008797/06
Share code: AME ISIN: ZAE000055802
("AME", "the company" or "the group")

REVIEWED RESULTS
for the year ended 31 March 2013

COMMENTARY
Review of the year
The year under review was challenging on many fronts but saw our companies overcome these
difficult trading conditions and maintain the growth achieved in the previous financial year with a
5% increase in revenue to R216,7 million (March 2012: R206,1 million). Comprehensive income
increased by 2% to R41,6 million (March 2012: R40,7 million).

The comprehensive income attributable to equity holders of the parent amounted to R37,9 million
(March 2012: R36,4 million) with earnings per share of 463,8 cents (March 2012: 428,8 cents).

Headline earnings per share were 463,9 cents (March 2012: 428,9 cents).

After paying tax of R18,5 million (March 2012: R15,5 million), the group generated R44,7 million
(March 2012: R41,3 million) in cash from its operating activities during the year. The group invested
R7 million in acquiring a site in Bloemfontein earmarked to be the new home of the Central Media
Group and spent R2,8 million (March 2012: R7,7 million) on capital expenditure. The group ended
the period with cash resources of R78,8 million (March 2012: R57,1 million).

Operations
The diversification and expansion programmes of our radio platforms into other local media
brands continue to provide positive synergies and have started to contribute to the bottom line
of the group.

Listenership on Algoa FM remained stable during the year under review. New media revenue
grew significantly on the station. Sport Elizabeth showed an increase, turning from a loss to
a marginal profit. During continued tough trading conditions, effective cost-cutting measures
assisted in increasing profitability over the previous year. Continued marketing and listenership-
building promotions are entrenching the brand in the Southern Cape. ICASA invited applications
for a new commercial radio licence in the Umtata and Butterworth. The proposed coverage area
falls outside of the Algoa FM footprint.

The period under review reflected the ongoing difficult trading conditions for the Central South
Africa region. Central Media Group saw a recovery in the second half of the year that meant
OFM closed the year above mid-year expectations in terms of profitability. An expanded local
sales force also grew revenue from the region. OFM audiences saw a dip in the latter half
of the year, and although losses were in non-core markets, measures have been taken to
reverse this trend.

Invitations were issued for two frequencies in Bloemfontein, one in Kimberley and one in
Upington. While these will invariably bring some degree of competition, these new entrants
are unlikely to be licensed into OFM's ambit, in terms of format.

Digital advertising revenue continues to grow in importance for the group. Digital Platforms,
the group's web development division, secured significant new business and also assisted with
the group cost-saving drive by implementing in-house IT and CRM systems. Mahareng gained
critical mass with the momentum obtained from a fast-growing Bloemfontein Courant,
and obtained sustainable profitability. RedStar Talent repositioned into the primarily event-
management sector in this period, and the results were almost immediate.

RadioHeads underwent a strategic shift in April 2012, with a strong focus on delivering sponsored
content to radio stations and advertisers. This business has performed below expectation, with
the revised strategy implemented taking longer to produce results. Management has been able
to show positive uptake towards the end of year one, and greater promise in year two.

Specialist media sales house United Stations achieved strong revenue growth and exceeded
budgeted profit for the year, mainly as a result of benefits coming through from substantial
investments made in new business. These factors, combined with an aggressive brand-specific
sales strategy, protected the business from an industry-wide pattern of static advertising budgets.

With strong, positive cash flow and its highly sought-after portfolio, United Stations is
well-placed to take advantage of recovering markets and good growth is foreseen especially
in the non-traditional revenue channels.

Declaration of final dividend no 3
The board has declared a final dividend (dividend no 3) of 200 cents per ordinary share (gross)
for the year ended 31 March 2013. The dividend is subject to the Dividends Withholding Tax
("DWT") that was introduced with effect from 1 April 2012. In accordance with the provisions
of the JSE Listings Requirements, the following additional information is disclosed:

- the dividend has been declared out of current profits available
  for distribution;
- the local Dividend Tax rate is 15%;
- the gross dividend amount is 200,00 cents per ordinary share for
  shareholders exempt from DWT;
- the net dividend amount is 170,00 cents per ordinary
  share for shareholders liable for DWT;
- the company has 8 288 309 ordinary shares in issue; and
- the company's income tax reference number is 9100/169/71/4.

The following dates are applicable to the dividend:
The last day to trade in order to be eligible for the dividend will be Friday, 19 July 2013.

Shares will trade ex-dividend from Monday, 22 July 2013.

The record date will be Friday, 26 July 2013 and payment will be made on Monday, 29 July 2013.

Share certificates may not be dematerialised/rematerialised between Monday, 22 July 2013 and
Friday, 26 July 2013, both days inclusive.

Dividends
An interim dividend (dividend no 2) of 100 cents per ordinary share (gross) was declared for
the period ended 30 September 2012. The final dividend is 200 cents per ordinary share (gross)
(2012: Nil per share).

Prospects
The new financial year has started on a reasonably positive note and the board is optimistic that
the revenue for the 2014 year will compare favourably with that of the prior year.

ACG Molusi
Independent Non-executive Chairman

14 June 2013
Johannesburg

These provisional results have been prepared by the financial director in accordance with
International Financial Reporting Standards ("IFRS"), the Companies Act no. 71 of 2008,
as amended, the Listings Requirements of the Johannesburg Stock Exchange and the
SAICA Financial Reporting Guides as issued by the Accounting Profession Committee on
a basis consistent with the policies and methods of computation as used in the annual financial
statements for the year ended 31 March 2013.

These results have been reviewed by PKF (Jhb) Inc. and their report is available for inspection
at the company's registered office.

Michelle Mynhardt
Financial director

CONSOLIDATED PROVISIONAL STATEMENTS OF COMPREHENSIVE INCOME

                                                   Reviewed      Audited   
                                                 year ended   year ended   
                                                   31 March     31 March   
                                             %         2013         2012   
                                        change        R'000        R'000
   
Revenue                                      5      216 688      206 075   
Cost of sales                                4     (56 065)     (54 068)   
Gross profit                                        160 623      152 007   
Operating expenses                                (107 249)    (102 020)   
Operating profit                             7       53 374       49 987   
Investment income                                     1 930        1 241   
Finance income                                        3 070        2 942   
Finance cost                                           (73)         (73)   
Losses attributable to associates                      (27)        (201)   
Net profit before taxation                   8       58 274       53 896   
Taxation                                           (16 670)     (13 173)   
SA normal taxation                                 (17 910)     (15 766)   
Deferred taxation                                     1 240        2 593   
Total comprehensive income                                                 
for the year                                 2       41 604       40 723   
Total comprehensive income                                                 
attributable to:                                                           
Non-controlling interest holders                      3 710        4 324   
Equity holders of the parent                 4       37 894       36 399   
Earnings per share (cents)                   8        463,8        428,9   
Headline earnings per share (cents)          8        463,9        428,9   
Dividends per share (cents)                             300               
Weighted average number of shares                                          
in issue ('000)                                       8 171        8 488   
Diluted average number of shares                                           
in issue ('000)                                       8 171        8 488   
Headline earnings reconciliation:                                          
Profit attributable to equity holders                37 894       36 399   
Loss on disposal of fixed assets                          9            3   
Tax on loss on disposal of asset                        (3)          (1)   
Headline earnings                                    37 900       36 401   

CONSOLIDATED PROVISIONAL STATEMENTS OF FINANCIAL POSITION
                 
                                                   Reviewed      Audited   
                                                 year ended   year ended   
                                                   31 March     31 March   
                                                       2013         2012   
                                                      R'000        R'000   
Assets                                                    
Non-current assets                                   95 314       89 028   
Property, plant and equipment                        34 881       29 130   
Investments                                          12 178       12 883   
Goodwill                                             39 780       39 780   
Deferred taxation                                     8 475        7 235   
Current assets                                      146 552      116 320   
Trade receivables                                    64 230       56 563   
Other receivables                                     2 454        2 121   
Dividends receivable                                    950          500   
Tax paid in advance                                     134           26   
Cash and cash equivalents                            78 784       57 110   
Total assets                                        241 866      205 348   
Equity and liabilities                                    
Total equity                                        161 007      134 091   
Non-current liabilities                                  41          315   
Operating lease accrual                                             200   
Interest-bearing borrowings                              41          115   
Current liabilities                                  80 818       70 942   
Trade payables                                       37 215       33 531   
Other payables                                       41 828       34 738   
Dividend payable                                        915          777   
Operating lease accrual and                               
interest-bearing borrowings                             136          375   
Taxation                                                724        1 521   
Total equity and liabilities                        241 866      205 348   

CONSOLIDATED PROVISIONAL STATEMENTS OF CHANGES IN EQUITY

                                                   Reviewed      Audited   
                                                 year ended   year ended   
                                                   31 March     31 March   
                                                       2013         2012   
                                                      R'000        R'000   
Issued capital                                                  
Balance at beginning of year                          8 171        8 539   
Shares repurchased                                                (368)   
Balance at end of year                                8 171        8 171   
Share premium                                                   
Balance at beginning of year                         13 742       31 909   
Shares repurchased                                             (18 167)   
Balance at end of year                               13 742       13 742   
Retained profit                                                 
Balance at beginning of year                        105 030       70 237   
Change in shareholding                                          (1 606)   
Total comprehensive income for year                  37 894       36 399   
Dividend                                            (8 261)               
Balance at end of year                              134 663      105 030   
Non-distributable reserve                                       
Balance at beginning of year                                      2 073   
Fair value adjustment on available                              
for sale financial assets                                       (2 073)   
Balance at end of year                                                   
Non-controlling interests                                       
Balance at beginning of year                          7 148        1 218   
Share of dividend                                   (6 427)               
Change in shareholding                                            1 606   
Share of total comprehensive income                             
for year                                              3 710        4 324   
Balance at end of year                                4 431        7 148   
Total capital and reserves                          161 007      134 091   

CONSOLIDATED PROVISIONAL STATEMENTS OF CASH FLOWS

                                                   Reviewed      Audited   
                                                 year ended   year ended   
                                                   31 March     31 March   
                                                       2013         2012   
                                                      R'000        R'000 
  
Cash generated by operating activities               57 707       52 807   
Net interest received                                 2 997        2 869   
Taxation paid                                      (18 815)     (15 483)   
Decrease in working capital                           2 690        1 080   
Cash flows from operating activities                 44 579       41 273     
Cash flows from investing activities                (8 356)     (30 744)   
Cash flows from financing activities               (14 549)              
Net increase in cash and cash equivalents            21 674       10 529   
Cash and cash equivalents at beginning of year       57 110       46 581   
Cash and cash equivalents at end of year             78 784       57 110   

PROVISIONAL SEGMENTAL REPORTING

                                                   Reviewed      Audited   
                                                 year ended   year ended   
                                                   31 March     31 March   
                                                       2013         2012   
                                                      R'000        R'000   
Revenue                                                             
Radio Broadcasting                                  187 551      178 682   
Sales houses                                         29 137       27 393   
Total                                               216 688      206 075   
Profitability                                                       
Radio Broadcasting                                   45 987       39 348   
Sales houses                                         15 749       10 941   
Company                                             (8 362)        (302)   
Total operating profit                               53 374       49 987   
Unallocated/eliminated corporate net                                
expense and inter-company consolidation                (27)        (201)   
Investment income                                     1 930        1 241   
Interest received                                     3 070        2 942   
Interest paid                                          (73)         (73)   
Taxation                                           (16 670)     (13 173)   
Total comprehensive income for year                  41 604       40 723   
Assets                                                              
Radio Broadcasting                                   62 665       55 445   
Sales houses                                         54 041       49 543   
Company                                              46 376       43 250   
Total                                               163 082      148 238   
Liabilities                                                         
Radio Broadcasting                                   32 494       29 670   
Sales houses                                         42 193       35 871   
Company                                               6 172        5 716   
Total                                                80 859       71 257   
Capital expenditure                                                 
Radio Broadcasting                                    9 491        3 023   
Sales houses                                            327          608   
Company                                                  15        4 091   
Total                                                 9 833        7 722   
Depreciation                                                        
Radio Broadcasting                                    3 018        2 927   
Sales houses                                            990          975   
Company                                                  66           66   
Total                                                 4 074        3 968   

REGISTERED OFFICE
Block A, Oxford Office Park, No. 5, 8th Street, Houghton Estate, Johannesburg, 2198
PO Box 3014, Houghton, 2041

TRANSFER SECRETARIES
Computershare Investor Services (Pty) Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Telephone: +27 11 370 5000 Telefax: +27 11 668 7721

SPONSOR
Arcay Moela Sponsors (Pty) Limited
Registration number: 2006/033725/07
Arcay House, 3 Anerley Road, Parktown, Johannesburg, 2193
PO Box 62397, Marshalltown, 2107

DIRECTORS
ACG Molusi (Chairman)*
KL Dube*, MJ Prinsloo*, N Sooka*
W Tshuma*, AJ Isbister, M Mynhardt
*Independent Non-executive

WWW.AME.CO.ZA

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