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AFRICAN MEDIA ENTERTAINMENT LIMITED - Unaudited Results for Six months ended 30 September 2014

Release Date: 27/11/2014 15:53
Code(s): AME     PDF:  
Wrap Text
Unaudited Results for Six months ended 30 September 2014

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

UNAUDITED RESULTS
for the six months ended 30 September 2014

COMMENTARY

Review of the six months ended 30 September 2014
Trading conditions for the period under review presented many challenges but our businesses
managed to grow revenue by 10% to R117,1 million (2013: R106,5 million) as well as
comprehensive income by 10% to R22,5 million (2013: R20,5 million).

The comprehensive income attributable to equity holders of the parent amounted to 
R19,4 million (2013: R17,8 million) with earnings per share of 237,8 cents (2013: 217,5 cents).
Headline earnings per share were 236,3 cents (2013: 217,5 cents).

After paying tax of R13 million (2013: R9,4 million), the group generated R10,2 million
(2013: 23,2 million) in cash from its operating activities during the period. The group invested
R6,2 million in developing of the site in Bloemfontein earmarked to be the new home of the
Central Media Group and spent R2,8 million (2013: R2 million) on capital expenditure and paid
R83 000 (2013: R0,8 million) to repurchase 1 000 (2013: 10943)of its own shares. During the period the
group paid out dividends to the value of R19,9 million, R3,7 million to non-controlling interest
holders and R16,2 million to equity holders of the parent. The group ended the period with
cash resources of R88,5 million (2013: R81,2 million).

Operations
Low business confidence and growth gave rise to the presently demanding trading conditions.
Tight cost control and innovation remains a key focus to maximise profits.

Algoa FM has managed to show marginal real growth in its local revenue, notwithstanding the
slow down in advertising demand. The station sold its 50% investment in the print publication,
Sport Elizabeth. The station's listenership remained stable year-on-
year. New "non- traditional" revenue initiatives are being pursued to bolster future revenues.

Central Media Group delivered half-year results that were above projection, but the
performance was mostly delivered through cost-containment as advertising revenue was
under pressure for the period under review. Non-advertising revenue continued to grow due to
new development projects taken on by Digital Platforms. Mahareng's Bloemfontein Courant
continued its growth path, delivering solid results for the first part of the year. Redstar is
tracking behind expectation, mostly due to a repositioning and management reshuffle. OFM's
performance has been stable, although revenue was below budget as the tightening economy
resulted in a drop-off in advertising expenditure.

New appointments by Heart FM and Gagasi FM allowed United Stations to grow gross
sales revenue by 13% year-on-year. A tough sales climate that has persisted for the full half
year, along with the need to reposition the two new station clients in the market, necessitated
additional investment in staff as well as significant research and trade marketing. These
investments have placed them in a good position to compete in the challenging marketplace
that is expected to persist over the remainder of the financial year. 

The repositioning of Radioheads midway through the first quarter, has yielded positive results
for the second quarter of this financial year. Radioheads has refocused on its core business,
with special attention paid to generating maximum revenue yield from campaigns. The
renewed focus has resulted in repeat business from several clients, allowing the company to
project positive results for the second half of this financial year.

Dividends
A final dividend (dividend no 5) of 200 cents per ordinary share (gross) was declared for the
period ended 31 March 2014 (2013:200 cents gross) and paid on 28 July 2014. The interim
dividend (dividend no 6) for the period ended 30 September 2014 is 100 cents per ordinary
share (gross) (2013: 100 cents per share).

Declaration of interim dividend no 6
The board has declared an interim dividend (dividend no 6) of 100 cents per ordinary share
(gross) for the period ended 30 September 2014. 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 100,00 cents per ordinary share for shareholders exempt from
  DWT;
- the net dividend amount is 85,00 cents per ordinary share for
  shareholders liable for DWT;
- the company has 8 276 366 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, 2 January 2015

Shares will trade ex-dividend from Monday, 5 January 2015

The record date will be Friday, 9 January 2015 and payment will be made on
Monday, 12 January 2015

Share certificates may not be dematerialised/rematerialised between Monday, 5 January 2015
and Friday, 9 January 2015, both days inclusive.

Prospects
The board expects the trading conditions for the remaining six months of the year to remain
challenging.

ACG MOLUSI
Independent Non-executive Chairman

27 November 2014

Johannesburg

These condensed 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 Guidelines as issued by the Accounting Practices 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 2014.

These results are unaudited.

Michelle Mynhardt
Financial director

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

                                             Unaudited        Unaudited       Audited
                                         six months to    six months to    year ended
                                             September        September      31 March
                                    %             2014             2013          2014
                               change            R'000            R'000         R'000
Revenue                           10%          117 121          106 500       242 524
Cost of sales                     15%         (31 385)         (27 341)      (62 275)
Gross profit                                    85 736           79 159       180 249
Operating expenses                            (59 086)         (53 579)     (119 684)
Operating profit                   4%           26 650           25 580        60 565
Investment income                                1 750            1 000         1 750
Finance income                                   2 821            2 019         4 508
Finance cost                                       (2)              (9)          (53)
Profits attributable to
associates                                         118              101           343
Net profit before taxation         9%           31 337           28 691        67 113
Taxation                                       (8 816)          (8 171)      (18 490)
SA normal taxation                             (9 797)          (8 805)      (21 775)
Deferred taxation                                  981              634         3 285

Total comprehensive
income for the period             10%           22 521           20 520        48 623
Total comprehensive
income attributable to:
Non-controlling interest
holders                                          3 118            2 755         5 766
Equity holders of the
parent                             9%           19 403           17 765        42 857
Earnings per share (cents)       9.3%            237,8            217,5         524,9
Headline earnings per
share (cents)                    8.7%            236,3            217,5         524,3
Dividends per share (cents)                        100              100           300
Weighted average
number of shares in
issue ( 000's)                                   8 160            8 169         8 165
Headline earnings
reconciliation
Profit attributable to equity
holders                                         19 403           17 765        42 857
Profit on disposal of fixed
assets                                           (162)                –          (61)
Tax on profit on disposal
of asset                                            45                –            17
Headline earnings                               19 286           17 765        42 813

CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION

                                             Unaudited        Unaudited       Audited
                                             September        September      31 March
                                                  2014             2013          2014
                                                 R'000            R'000         R'000
Assets     
Non-current assets                             108 409           95 893        99 570
Property, plant and equipment                   43 011           34 995        35 758
Goodwill                                        39 426           39 780        39 780
Investments                                     13 248           12 009        12 272
Deferred taxation                               12 724            9 109        11 760
Current assets                                 168 251          143 707       163 840
Trade receivables                               71 253           60 602        49 394
Other receivables                                7 759            1 695         8 125
Tax paid in advance                                694              243            42
Cash and cash equivalents                       88 545           81 167       106 279
      
Total assets                                   276 660          239 600       263 410
Equity and liabilities     
Total equity                                   178 195          161 363       175 842
Non-current liabilities                              –               41             –
Interest-bearing borrowings                          –               41             –
Current liabilities                             98 465           78 196        87 568
Trade payables                                  42 735           41 888        24 962
Other payables                                  54 004           34 853        58 326
Dividend payable                                 1 170            1 173         1 020
Operating lease accrual and     
interest-bearing borrowings                          –               38           105
Taxation                                           556              244         3 155
     
Total equity and liabilities                   276 660          239 600       263 410

CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY

                                             Unaudited        Unaudited        Audited
                                         six months to    six months to     year ended
                                             September        September       31 March
                                                  2014             2013           2014
                                                 R'000            R'000          R'000
Issued capital     
Balance at beginning of period                   8 160            8 171          8 171
Shares repurchased                                 (1)             (11)           (11)
Balance at end of period                         8 159            8 160          8 160
Share premium     
Balance at beginning of period                  12 921           13 742         13 742
Shares repurchased                                (82)            (821)          (821)
Balance at end of the period                    12 839           12 921         12 921
Retained profit     
Balance at beginning of period                 152 749          134 663        134 663
Change in shareholding                               9                –              –
Total comprehensive income     
for the period                                  19 403           17 765         42 857
Dividend                                      (16 403)         (16 577)       (24 771)
Balance at end of period                       155 758          135 851        152 749
Non-controlling interests     
Balance at beginning of period                   2 012            4 431          4 431
Change in shareholding                            (18)                –             –
Share of total comprehensive income     
for the period                                   3 118            2 755          5 766
Share of dividend                              (3 673)          (2 755)        (8 185)
Balance at end of period                         1 439            4 431          2 012
Total capital and reserves                     178 195          161 363        175 842

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

                                             Unaudited        Unaudited        Audited
                                         six months to    six months to     year ended
                                             September        September       31 March
                                                  2014             2013           2014
                                                 R'000            R'000          R'000
Cash generated by operating activities          28 508           27 505         64 048
Net interest received                            2 819            2 010          4 455
Taxation paid                                 (13 048)          (9 393)       (19 252)
(Increase)/decrease in working capital         (8 040)            3 047         13 295
Cash flows from operating activities            10 239           23 169         62 546
Cash flows from investing activities           (8 048)          (1 713)        (2 200)
Cash flows from financing activities*         (19 925)         (19 073)       (32 851)
Net (decrease)/increase in cash and cash 
equivalents                                   (17 734)            2 383         27 495
Cash and cash equivalents 
at beginning of period                         106 279           78 784         78 784
Cash and cash equivalents 
at end of period                                88 545           81 167        106 279
* Dividends paid

SEGMENTAL REPORTING

                                             Unaudited        Unaudited        Audited
                                         six months to    six months to     year ended
                                             September        September       31 March
                                                  2014             2013           2014
                                                 R'000            R'000          R'000
Revenue
Radio Broadcasting                              84 779           91 584        209 182
Sales houses                                    32 342           14 916         33 342
Total                                          117 121          106 500        242 524
Profitability
Radio Broadcasting                              26 831           22 462         53 593
Sales houses                                     4 851            4 248         11 327
Company                                        (5 032)          (1 130)        (4 012)
Total operating profit                          26 650           25 580         60 908
Unallocated/eliminated corporate net
expense and intercompany consolidation             118              101              –
Investment income                                1 750            1 000          1 750
Interest received                                2 821            2 019          4 508
Interest paid                                      (2)              (9)           (53)
Taxation                                       (8 816)          (8 171)       (18 490)
Total comprehensive income
for the period                                  22 521           20 520         48 623
Assets
Radio Broadcasting                              55 544           64 518         63 397
Sales houses                                    70 340           57 193         49 615
Company                                         62 231           36 722         44 119
Total                                          188 115          158 433        157 131
Liabilities
Radio Broadcasting                              26 086           35 280         34 542
Sales houses                                    62 974           35 133         45 575
Company                                          9 405            7 824          7 451
Total                                           98 465           78 237         87 568
Capital expenditure
Radio Broadcasting                                 951            1 731          3 530
Sales houses                                     7 633              316            902
Company                                            378                –             11
Total                                            8 962            2 047          4 443
Depreciation 
Radio Broadcasting                               1 346            1 448          2 421
Sales houses                                       375              507          1 017
Company                                             44               31             62
Total                                            1 765            1 986          3 500

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
Registration number 2004/003647/07
Ground Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Telephone: +27 11 370 5000
Telefax: +27 11 688 5238

SPONSOR
Arbor Capital (Pty) Limited
Registration number 2006/033725/07
Ground Floor, One Health Building, Woodmead North Office Park
54 Maxwell Drive, Woodmead, 2191     
PO Box 62397, Marshalltown, 2107

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

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