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AFRICAN MEDIA ENTERTAINMENT LIMITED - Unaudited Results for the six months ended 30 September 2015

Release Date: 26/11/2015 14:35
Code(s): AME     PDF:  
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Unaudited Results for the six months ended 30 September 2015

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 2015

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
                                                                               
                                                    Unaudited       Unaudited     Audited      
                                                six months to   six months to  year ended
                                                 30 September    30 September    31 March
                                            %            2015            2014        2015
                                       change           R'000           R'000       R'000
Revenue                                     5         123 032         117 121     254 631
Cost of sales                               8        (33 975)        (31 385)    (61 047)
Gross profit                                           89 057          85 736     193 584
Operating expenses                                   (64 092)        (59 086)   (123 428)
Operating profit                          (6)          24 965          26 650      70 156
Investment income                                       1 500           1 750       1 750
Finance income                                          3 039           2 821       5 879
Finance cost                                              (1)             (2)         (6)
Profits attributable to associates                        137             118         507
Net profit before taxation                (5)          29 640          31 337      78 286
Taxation                                              (8 041)         (8 816)    (21 715)
  SA normal taxation                                  (9 126)         (9 797)    (22 359)
  Deferred taxation                                     1 085             981         644
Total comprehensive income
for the period                            (4)          21 599          22 521      56 571
Total comprehensive income
attributable to:
Non-controlling interest holders                        2 139           3 118       6 942
Equity holders of the parent              0,3          19 460          19 403      49 629
Earnings per share (cents)                0,6           239,2           237,8       608,2
Headline earnings per share
(cents)                                   1,2           239,2           236,3       612,5
Dividends per share (cents)                               100             100         350
Weighted average number of
shares in issue (000's)                                 8 137           8 160       8 160
Headline earnings reconciliation
Profit attributable to equity
holders                                                19 460          19 403      49 629
(Profit)/loss on disposal of
investment/fixed assets                                     –           (162)         354
Tax on disposal of assets                                   –              45           –
Headline earnings                                      19 460          19 286      49 983

CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION

                                                    Unaudited       Unaudited     Audited
                                                 30 September    30 September    31 March
                                                         2015            2014        2015
                                                        R'000           R'000       R'000
Assets               
Non-current assets                                    140 670         108 409     125 441
  Property, plant and equipment                        73 899          43 011      60 152
  Goodwill                                             39 426          39 426      39 426
  Investments                                          13 873          13 248      13 476
  Deferred taxation                                    13 472          12 724      12 387
               
Current assets                                        160 855         168 251     185 713
  Trade receivables                                    65 251          71 253      71 634
  Other receivables                                     6 650           7 759       8 242
  Tax paid in advance                                   2 444             694         324
  Cash and cash equivalents                            86 510          88 545     105 513
               
Total assets                                          301 525         276 660     311 154
Equity and liabilities               
Total equity                                          198 961         178 195     201 504
Current liabilities                                   102 564          98 465     109 650
  Trade payables                                       32 406          42 735      37 945
  Other payables                                       68 298          54 004      68 587
  Dividend payable                                      1 399           1 170       1 245
  Taxation                                                461             556       1 873
               
Total equity and liabilities                          301 525         276 660     311 154

CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY

                                                    Unaudited       Unaudited     Audited
                                                six months to   six months to  year ended
                                                 30 September    30 September    31 March
                                                         2015            2014        2015
                                                        R'000           R'000       R'000
Issued capital 
Balance at beginning of period                          8 159           8 160       8 160
Shares repurchased                                       (39)             (1)         (1)
Balance at end of period                                8 120           8 159       8 159
Share premium 
Balance at beginning of period                         12 839          12 921      12 921
Shares repurchased                                    (3 769)            (82)        (82)
Balance at end of the period                            9 070          12 839      12 839
Retained profit 
Balance at beginning of period                        179 760         152 749     152 749
Change in shareholding                                      –               9       1 903
Total comprehensive income for the period              19 460          19 403      49 629
Dividend                                             (20 334)        (16 403)    (24 521)
Balance at end of period                              178 886         155 758     179 760
Non-controlling interests 
Balance at beginning of period                            746           2 012       2 012
Change in shareholding                                      –            (18)     (1 912)
Share of total comprehensive income for 
the period                                              2 139           3 118       6 942
Share of dividend                                           –         (3 673)     (6 296)
Balance at end of period                                2 885           1 439         746
Total capital and reserves                            198 961         178 195     201 504

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

                                                    Unaudited       Unaudited     Audited
                                                six months to   six months to  year ended
                                                 30 September    30 September    31 March
                                                         2015            2014        2015
                                                        R'000           R'000       R'000
Cash generated by operating activities                 27 379          28 508      74 008
Net interest received                                   3 038           2 819       5 873
Taxation paid                                        (12 658)        (13 048)    (23 923)
Decrease/(increase) in working capital                  2 149         (8 040)       (636)
Cash flows from operating activities                   19 908          10 239      55 322
Cash flows from investing activities                 (18 730)         (8 048)    (25 497)
Cash flows from financing activities*                (20 181)        (19 925)    (30 591)
Net decrease in cash and cash equivalents            (19 003)        (17 734)       (766)
Cash and cash equivalents at beginning  
of period                                             105 513         106 279     106 279
Cash and cash equivalents at end  
of period                                              86 510          88 545     105 513
(*)Dividends paid

SEGMENTAL REPORTING   
                                                    Unaudited       Unaudited     Audited
                                                six months to   six months to  year ended
                                                 30 September    30 September    31 March
                                                         2015            2014        2015
                                                        R'000           R'000       R'000
Revenue   
Radio Broadcasting                                     90 290          84 779     210 278
Sales houses                                           32 742          32 342      44 142
Corporate                                                   –               –         211
Total                                                 123 032         117 121     254 631
Profitability   
Radio Broadcasting                                     24 363          26 831      56 311
Sales houses                                            2 469           4 851      15 691
Corporate                                             (1 867)         (5 032)     (1 846)
Total operating profit                                 24 965          26 650      70 156
Unallocated/eliminated corporate net   
expense and intercompany consolidation                    137             118         507
Investment income                                       1 500           1 750       1 750
Interest received                                       3 039           2 821       5 879
Interest paid                                             (1)             (2)         (6)
Taxation                                              (8 041)         (8 816)    (21 715)
Total comprehensive income for   
the period                                             21 599          22 521      56 571
Assets   
Radio Broadcasting                                     77 972          55 544      66 009
Sales houses                                           61 984          70 340      68 141
Corporate                                              75 059          62 231      71 491
Total                                                 215 015         188 115     205 641
Liabilities   
Radio Broadcasting                                     50 457          26 086      49 521
Sales houses                                           46 803          62 974      51 718
Corporate                                               5 304           9 405       8 411
Total                                                 102 564          98 465     109 650
Capital expenditure   
Radio Broadcasting                                     11 202             951       5 353
Sales houses                                              130           7 633       1 050
Corporate                                               4 830             378      22 572
Total                                                  16 162           8 962      28 975
Depreciation   
Radio Broadcasting                                      1 833           1 346       2 599
Sales houses                                              426             375         788
Corporate                                                 156              44         208
Total                                                   2 415           1 765       3 595

CHAIRMAN'S REVIEW
Review of the six months ended 30 September 2015
Trading conditions for the period under review were tough with lower growth in revenue.
Our operations experienced an increase in revenue of 5% to R123 million (2014 R117,1 million).                             
Comprehensive income decreased by 4% to R21,6 million (2014 R22,5 million).

The comprehensive income attributable to equity holders of the parent amounted to R19,5 million
(2014: R19,4 million) with earnings per share of 239,2 cents (2014: 237,8 cents). Headline earnings
per share was 239,2 cents (2014: 236,3 cents).

After paying tax of R12,7 million (2014: R13,0 million), the group generated R19,9 million
(2014: R10,2 million) in cash from its operating activities during the year. The group invested
R13,5 million (2014: R6,2 million) on the development of the site in Bloemfontein earmarked to be
the new home of the Central Media Group and spent R2,7 million (2014: R2,8 million) on capital
expenditure. The group paid R3,8 million (2014: R83 000) to repurchase 39 200 (2014:1 000)
of its own shares. During the period the group paid out dividends of R20,2 million
(2014: 19,9 million) to the equity holders of the company. The group ended the period with cash
resources of R86,5 million (2014: R88,5 million).

Operations
Low business confidence remains a key challenge across all sectors resulting in demanding trading
conditions. Innovation and tight cost control remain imperative.

AlgoaFM has delivered stable results. Advertising revenue is still constrained by the relatively weak
local direct market which is largely Eastern Cape based. Cost containment is a major focus and has
contributed to the profitability of the radio station. Listenership has shown growth year on year.
Algoa FM remains committed to the community in its broadcast footprint and the annual Algoa FM
Big Walk for Cancer charity event attracted 11 900 participants. This event was presented by the
Department of Health, Eastern Cape.

Trading conditions for Central Media Group remain tight as the effects of a sluggish economy
combined with the severe drought taking hold. The radio broadcaster, OFM, is performing close to
expectation, mostly due to good cost control. Redstar has won new contracts across the region
and has been able to move that revenue to the bottom line. Digital Platforms is also tracking ahead
of expectation with a few new national customers. Mahareng Publishing is experiencing the
slowdown in national print confidence after good growth off a low base.

The first six months of this financial year have been a tough trading period for Media in general, and
RadioHeads was affected with the first six months performing below par compared to the same
period in the previous financial period. Clients are currently taking longer to sign off on campaigns,
while at the same time shifting campaigns to the last quarter of 2015 and the first quarter of 2016.

United Stations has grown sales revenue year on year. The two stations lost from their
portfolio were replaced by four new client stations, covering KZN, Mpumalanga, North West and
Western Cape, whilst KAYA gave notice of their intention to appoint another sales house. United
Stations remains well positioned to serve its radio stations in the national radio advertising market
despite the challenging conditions.

Dividends
A final dividend (dividend no 7) of 250 cents per ordinary share (gross) was declared for the year
ended 31 March 2015 (2014: 200 cents gross) and paid on 13 July 2015. The interim dividend
(dividend no 8) for the period ended 30 September 2015 is 100 cents per ordinary share (gross)
(2014: 100 cents per share).

Declaration of interim dividend no 8
The board has declared an interim dividend (dividend no 8) of 100,00 cents per ordinary share
(gross) for the period ended 30 September 2015. 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 8 237 165 ordinary shares in issue;
- 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 8 January 2016.
Shares will trade ex-dividend from Monday 11 January 2016.
The record date will be Friday 15 January 2016 and payment will be made on Monday 18 January 2016.
Share certificates may not be dematerialised/rematerialised between Monday 11 January 2016 and
Friday 15 January 2016, 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
26 November 2015

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, IAS 34: Interim Financial Reporting, 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 2015.

These results are unaudited.

Michelle Mynhardt (CA/SA)
Financial director

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 Sponsors (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 Tlhabane*, MJ Prinsloo*, N Sooka*
M Mynhardt (Executive Financial Director)
AJ Isbister (Executive Director)
(*)Independent Non-executive Director

COMPANY SECRETARY
C Roberts

WWW.AME.CO.ZA
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