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Abridged Report for the year ended 30 June 2016
MONEYWEB HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration No: 1998/025067/06)
(JSE code: MNY ISIN code: ZAE000025409)
("Moneyweb" or "the company" or "the group")
ABRIDGED REPORT FOR THE YEAR ENDED 30 JUNE 2016
Group Statement of Profit or Loss and Other Comprehensive Income
Audited Audited
30-Jun-16 30-Jun-15
R'000 R'000
Revenue 28 304 25 501
Loss before investment income, fair value adjustments,
depreciation, amortisation, impairments and exchange
gains/(losses) (6 175) (4 044)
Depreciation (287) (332)
Stanlib income fund 1 322 1 235
Bank interest 103 302
Finance charges - (10)
Fair value adjustment of investment and Stanlib income
fund 11 (243)
Foreign exchange gains 78 3
Impairment of joint venture investment (13) -
Net loss before taxation (4 961) (3 089)
Taxation 38 72
Net loss for the period (4 923) (3 017)
Other comprehensive income - -
Total comprehensive loss for the period (4 923) (3 017)
Basic and diluted loss per share (cents) (4.62) (2.83)
Reconciliation of headline loss
Net loss for the period (4 923) (3 017)
Impairment of joint venture investment 13 -
Headline loss (4 910) (3 017)
Basic and diluted headline loss per share (cents) (4.61) (2.83)
Weighted average number of shares in issue (000's) 106 575 106 575
Group Statement of Financial Position
Audited Audited
30-Jun-16 30-Jun-15
R'000 R'000
Assets
Non-current assets
Tangible fixed assets 513 620
Investment in joint ventures - 13
Other investment 34 34
Deferred taxation 275 237
Stanlib income fund 927 1 082
1 749 1 986
Current assets
Trade and other receivables 4 166 3 127
Stanlib income fund 13 075 18 587
Cash and cash equivalents 3 094 3 696
20 335 25 410
Total assets 22 084 27 396
Equity and liabilities
Capital and reserves
Share capital and premium 32 732 32 732
Accumulated loss (15 185) (10 262)
Ordinary shareholders’ interest 17 547 22 470
Current liabilities
Trade and other payables 3 754 4 008
Deferred revenue 773 908
Taxation 10 10
4 537 4 926
Total equity and liabilities 22 084 27 396
Net asset value per share (cents) 16.46 21.1
Net tangible asset value per share (cents) 16.46 21.1
Closing number of shares in issue (net of treasury) (000’s) 106 575 106 575
Group Statement of Changes in Equity
Share Share Accumulated
capital premium loss Total
R'000 R'000 R'000 R'000
Balance at 30 June 2014 107 32 625 (7 245) 25 487
Total comprehensive loss for the
period ended 30 June 2015 - - (3 017) (3 017)
Balance at 30 June 2015 107 32 625 (10 262) 22 470
Total comprehensive loss for the
period ended 30 June 2016 - - (4 923) (4 923)
Balance at 30 June 2016 107 32 625 (15 185) 17 547
Group Statement of Cash Flow
Audited Audited
30-Jun-16 30-Jun-15
R'000 R'000
Net cash outflows from operating activities (7 458) (1 665)
Net cash inflows/(outflows) from investing activities 6 820 (407)
Effect of exchange rate movement on cash balances 36 19
Cash and cash equivalents at beginning of period 3 696 5 749
Cash and cash equivalents at end of period 3 094 3 696
Business overview
Moneyweb has had a year of ups and downs. On the one hand there have been successes with
new revenue streams in the areas of video content creation, events, subscription annuity income
and increased radio airtime. On the other hand it has proven to be challenging to quickly convert
new investments into profitable ventures and this had led to large cash outlays. The investments
have been mostly in human resources and the services provided which are immediately expensed.
This has significantly increased expenses and has directly led to the headline loss of R4,910 million
for this financial year.
Moneyweb would like to assure its shareholders that it intends to capitalise on its investments and
turn the losses into profit. This is never an easy task especially in a challenging economic
environment. The aim is to grow revenue while maintaining the existing cost base. Moneyweb feels
that with its increased options for advertising it will be able to move towards a return for shareholders.
Operating results
Moneyweb has experienced a difficult trading year with some significant drops in advertising
revenue especially from its mining website (Mineweb.com) and from the increase in costs to create
diversified and sustainable revenue streams. Moneyweb’s revenue as a whole increased by 11%
year-on-year, however expenses increased by 18% over the same period. This has led to the
operating and headline loss reported.
Even though there has been a significant shift in revenue from traditional media such as print to
online, there has simultaneously been increased downward pressure on digital advertising rates from
big market players such as Facebook and Google. Moneyweb remains a niche financial,
investment and business news destination with the majority of content being published online and
broadcast on radio. Moneyweb has seen how online advertising prices have started to drop with
clients placing more of their money with an integrated media solution than single banner adverts
on a website. Moneyweb has thus invested in creating video content and events to support clients
and there has been revenue growth in these areas of our business. Moneyweb has increased its
airtime on the SABC radio stations of RSG and Radio 2000. This was done from 01 April 2016 and we
therefore expect to start seeing meaningful advertising returns in the 2017 FY. Moneyweb has started
a subscription division with its flagship product known as Moneyweb Insider. Subscriptions are
growing month-on-month and there is a focus to grow this revenue stream into a substantial monthly
annuity income.
Moneyweb invested in the prior financial year in establishing a video unit and new digital properties
such as The Moneyweb Investor, Moneyweb DRIVE and Property Mogul. There was further
investment in creating financial and investment events of which the Money Expo was one. This was
done to diversify revenue streams and move away from the traditional banner advertising sale
which is fast becoming redundant. Clients are looking for content marketing solutions which are
spread across a multitude of media and social network platforms. Moneyweb is able to offer clients
a fully integrated media solution with the exception of television. Our video unit has managed to
capture traditional television budgets and we foresee this to grow substantially going forward.
Financial Results
With the diversification in revenue streams we have had an increase of 11% in overall revenue from
the prior FY of R25,501 million to the current FY of R28,304 million. The main contributing revenue
streams to the increase came from video content, content marketing solutions on various platforms
which include events and radio. The investments in new revenue streams also increased costs. Costs
were mainly increased due to the employment of new staff and the use of professional services to
augment the diversified revenue streams. As a result of revenue not keeping up with the increased
costs, Moneyweb has reported a R6,175 million operating loss and a headline loss of R4,910 million.
Moneyweb has started to see an improved return on its investments in its second six months of
operation. The operating loss reported for the first 6 months of the FY was R3,541 million and for the
second six months it was R2,634 million. There has been an improvement of 907k over the 6 months
and Moneyweb is aiming to improve on this in the first 6 months of the new FY.
Moneyweb is currently obtaining increased revenue from its video unit, The Investor, its radio
platforms and from events such the Money Expo. Unfortunately products such as Mineweb.com,
Moneyweb DRIVE and Property Mogul have not reaped the required returns with Moneyweb DRIVE
and Property Mogul being mothballed. Mineweb.com is still continuing, however with a much lower
cost base for content generation.
Cash flows are under pressure with R8,883 million being used to fund operational losses arising from
a focus to diversify revenue stream investments. Moneyweb maintains a debt free position and has
R16,169 million in liquid resources. Current assets exceed current liabilities by 4,48. Moneyweb is
cognisant of the need to become cash flow positive and this remains a key focus for the group.
Moneyweb has written off property, plant and equipment that is no longer in use to more accurately
reflect its fixed assets in use. Debt collection has remained excellent through-out the year with a
provision of 3, 06% being made for possible bad debts. The net asset value of the group at financial
year-end was 16.46c per share.
Litigation
Moneyweb has received the judgement for the copyright case against Media24 and Fin24. Fin24
was found to have plagiarised one of the seven Moneyweb articles. The case has been settled
with each side being responsible for their own legal costs.
Prospects
Moneyweb hosted its second Money Expo early in July 2016 which has proven to be a successful
investment and is quickly becoming the largest financial Expo in the country. The aim is to further
grow the Money Expo into a “must attend” on the annual business, financial and investment
calendar.
Moneyweb in partnership with The Money School has created a video series to assist couples in
managing their path towards personal wealth. This video series has many benefits especially for
South African citizens who are struggling with debt, increasing inflation and higher interest rates. The
series is available for corporates to buy for their employees.
The Investor has quickly grown to be the most widely read digital financial magazine in South Africa.
This has lead to clients becoming more interested in brand affiliation to the magazine and has shown
an increase in revenue.
The use of video clips online is continuing to grow as a major source of information consumption.
Moneyweb will continue to invest in growing its video division into a fully fledged production business
as well as a media content business.
Moneyweb took on additional airtime from the SABC with the RSG program Geld Sake now being
broadcast from 18:00 to 19:00 on week days and a brand new slot on radio 2000 known as Money
Talk being broadcast between 19:00 and 20:00 Monday to Thursday. The focus is to grow the
revenue in the new time channels and to continue building on the revenue in the existing channels.
Moneyweb has created an online shop where various products are sold along with its flagship
subscription known as Moneyweb Insider. There is a concerted effort to increase subscriptions on a
daily basis to create a substantial annuity income per month with the goal of serving the Moneyweb
audience with top quality business, financial and investment content. Moneyweb is always looking
for entrepreneurial partners and new ways of creating revenue. The aim is to focus on and grow
profitable ventures.
Acquisitions, disposals and share issues
There were no acquisitions, disposals or share issues during the year under review.
Dividend policy
No dividend has been declared.
Post balance sheet events
There are no material events subsequent to the end of the year and to the date of this report that
have not been reflected in the audited financial results or that require further disclosure.
Basis of preparation
Statement of compliance
The Abridged Report for the period ended 30 June 2016 has been prepared in accordance with
the framework concepts and the recognition and measurement requirements of International
Financial Reporting Standards (“IFRS”), the SAICA Financial Reporting Guides issued by the
Accounting Practises Committee and Financial Pronouncements as issued by Financial Reporting
Standards Council and contains the information required by IAS 34: Interim Financial Reporting, and
is in compliance with the requirements of the Companies Act of South Africa and the Listings
Requirements of the Johannesburg Stock Exchange.
The principal accounting policies used in the preparation of the results for the year ended 30 June
2016 are consistent with those applied for the year ended 30 June 2015 and are in terms of IFRS. In
terms of International Financial Reporting Standard 8 – Operating Segments, the group is considered
to be a single segment business.
The directors of Moneyweb take full responsibility for the preparation of the Abridged Report and
that the financial information has been correctly extracted from the underlying group financial
statements. The results have been prepared by Mr P Meyer CA(SA), the Financial Director of
Moneyweb.
Basis of measurement
The Abridged Report for the year ended 30 June 2016 has been prepared on the historical cost basis
with the exception of certain financial instruments that are stated at fair value.
Audit opinion
This Abridged Report is extracted from the audited information but is not itself audited. The financial
statements have been audited by BDO South Africa Inc. Both the financial statements and the
unqualified opinion are available for inspection at the registered office of the company. The
auditor’s report does not necessarily report on all the information contained in this announcement.
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the
auditor’s engagement they should obtain a copy of the auditor’s report together with the
accompanying financial information from the company’s registered office. Any reference to the
future financial performance included in this announcement has not been reviewed or reported on
by the company’s auditor.
On Behalf of the Board
PM Jenkins
Executive Chairman
26 September 2016
Corporate Information
Non-executive directors: LW Sipoyo*; SJ Gordon*; AJ Isbister; BN Sturgeon; WP van der Merwe*;
VW Mcobothi*
*Independent director
Executive directors: PM Jenkins (Executive chairman); MJ Ashton (Managing director); P Meyer
(Financial director)
Registered address: Number 5, 8th Street, Houghton Estate, 2198
Postal address: PO Box 8, Melrose Arch, 2076
Company secretary: N Sooka
Telephone: (011) 344 8600
Transfer secretaries: Computershare Investor Services Proprietary Limited
Auditors: BDO South Africa Incorporated
Designated Advisor: Arbor Capital Sponsors Proprietary Limited
Date: 26/09/2016 02:08:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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