Wrap Text
Unaudited Consolidated Condensed Interim Results
for the six months ended 30 September 2017
eMEDIA HOLDINGS LIMITED
The company's shares are listed under the Media Sector of the JSE.
Registration number: 1968/011249/06
(Incorporated in the Republic of South Africa)
JSE Share Codes
Ordinary Shares: EMH IZIN: ZAE000208898
N ordinary Shares: EMN IZIN: ZAE000209524
Unaudited Consolidated Condensed Interim Results
for the six months ended 30 September 2017
COMMENTARY
The period under review resulted in the Group ending the period showing a profit from
continuing operations of R1.9 million compared to a profit of R103.5 million, in
the prior period. The decrease is attributable to the re-negotiated DStv contract
which showed a significant decline in the licence fee revenue the Group receives from
Multichoice for the supply of eNCA and five other channels. Cost of sales for the
Group however increased by 9% this resulted in the Gross Profit for the Group ending
the period on R598.1 million compared to R707.1 million in the prior year, a decrease
of 15%. Also included in the profit are the losses attributable to the continued
investment into the multi-channel business, (OpenView and e.tv multichannel) of
R117.3 million compared to R136.9 million in the prior year. EBITDA for the Group
ended the period on R116.9 million compared to R277.3 million for the prior period, a
decrease of 57.8% year-on-year.
Programming rights for the Group increased by 34.4% from R929.9 million compared
to R691.9 million in the prior year. This is due to a new three-year deal signed
with Sony Pictures and includes the purchase of Days of Our Lives and other premium
content. This has also seen an increase in Trade Payables of 16.8%. Borrowings for
the Group, which mainly consists of mortgage bond financing, has decreased to
R675.9 million and this has seen a decrease in finance costs of 21.2%.
The Group's only asset is a 67.7% stake in eMedia Investments Proprietary Limited
("eMedia Investments").
EMEDIA INVESTMENTS
e.tv terrestrial
The six-month period ended 30 September 2017 has seen the market share of e.tv remain
relatively constant, but has seen a decline in the key revenue drivers of LSM 5 to
7. e.tv's advertising revenue increased from R664.9 million to R688.9 million, an
increase of 4% year-on-year. Programming and other cost of sales increased by 7% from
R336.5 million to R359.3 million. Management is reviewing the schedule in order to
change slots that are currently unprofitable. Operating expenses increased from
R242.5 million to R250.9 million, an increase of 3% year-on-year. e.tv approached
ICASA for an amendment to its licence conditions in which it requested that the
30 minute news bulletin be allowed to be scheduled outside of Prime Time. The
application was rejected by ICASA and management is reviewing its Prime Time News
strategy. As previously reported, litigation was instituted against The Minister of
Communications and Others regarding the Broadcasting Digital Migration policy which
will have an impact on DTT. Although e.tv lost the application, leave to appeal
was granted and e.tv won the appeal at the Supreme Court of Appeal. The losing
respondents referred the matter to the Constitutional Court for a final determination.
It was heard in February and e.tv lost.
e.tv Multichannel and Platco
Included in the results are losses of R117,3 million from the continued investment
into the multi-channel businesses. Advertising revenue has increased from
R6.5 million in the previous year to R22.2 million. The OpenView platform has
increased its viewership capacity with 1 008 114 boxes activated at the end of the
period. The millionth box was activated during the month of September and monthly
activations continue to be in the region of 35 000 boxes. Platco Digital also entered
into a settlement agreement with the SES Satellite signal provider to terminate the
15 year contract on 31 December 2017. The settlement of R100 million included arrear
and service payments to 31 December 2017 of R78 million and a termination amount of
R22 million. All payments were made in October. The annualised saving in satellite
signal fees will amount to R40 million.
eSat.tv (eNCA)
eNCA continues to perform well and is the most-watched 24-hour news channel on DStv
with approximately 50% market share. The DStv agreement for the supply of eNCA and
five other channels for five years was signed in May with an effective date of
1 February 2017. Licence fee revenue has reduced from R266.6 million to
R140.8 million and structural changes were made to reduce costs. Advertising revenue
in eNCA still shows good growth, ending the period on R52.0 million, a 16% increase
from R44.9 million in the previous year.
Management continues to review the non-core and peripheral businesses and will exit
these businesses when opportunities present themselves. During the current period,
the sale of eBotswana and the intangible assets in Lalela (Pty) Ltd and Lalela LLC
were completed.
STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 September 30 September 31 March
2017 2016 2017
R000's R000's R000's
ASSETS
Non-current assets 7 589 977 7 703 468 7 622 858
Property, plant and equipment 903 699 993 942 941 584
Plant and equipment 294 839 343 286 323 028
Owner occupied property 608 860 650 656 618 556
Intangible assets 2 590 434 2 628 304 2 596 701
Goodwill 3 778 264 3 776 769 3 778 264
Equity-accounted investees 209 498 231 637 203 038
Long-term receivables 17 108 17 214 16 456
Deferred tax assets 90 974 55 602 86 814
Current assets 1 605 602 1 492 379 1 529 469
Inventories 18 119 18 477 20 946
Programming rights 929 956 691 906 866 244
Trade and other receivables 462 421 577 187 439 962
Current tax assets 15 154 17 689 16 113
Cash and cash equivalents 179 952 187 120 186 204
Assets of disposal groups 22 985 11 763 53 618
Total assets 9 218 564 9 207 610 9 205 945
EQUITY AND LIABILITIES
Total equity 7 186 738 7 170 029 7 181 685
Stated capital 6 762 797 6 762 797 6 762 797
Treasury shares (7 913) (3 230) (7 221)
Reserves (605 365) (611 538) (600 432)
Equity attributable to owners of the Company 6 149 519 6 148 029 6 155 144
Non-controlling interest 1 037 219 1 022 000 1 026 541
Non-current liabilities 782 917 992 164 877 871
Deferred tax liabilities 537 075 535 152 540 747
Borrowings 241 338 457 012 332 627
Operating lease accruals 4 504 - 4 497
Current liabilities 1 248 909 1 044 701 1 144 768
Current tax liabilities 7 752 12 000 6 664
Current portion of borrowings 434 533 342 613 342 537
Trade and other payables 805 235 689 173 793 757
Bank overdrafts 1 389 915 1 810
Liabilities of disposal groups - 716 1 621
Total liabilities 2 031 826 2 037 581 2 024 260
Total equity and liabilities 9 218 564 9 207 610 9 205 945
Net asset value 6 149 518 6 148 030 6 155 144
Net asset value per share
after treasury shares (cents) 1 383 1 381 1 384
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
6 Months 6 Months* Audited
30 September 30 September 31 March
2017 2016 2017
R000's R000's % change R000's
Continuing operations
Revenue 1 203 634 1 262 542 -4,7% 2 582 733
Cost of sales (605 515) (555 411) -9,0% (1 176 867)
Gross profit 598 119 707 131 -15,4% 1 405 866
Other income 6 108 27 459 -77,8% 54 945
Administrative and
other expenses (487 231) (457 320) -6,5% (972 546)
Earnings before interest,
taxation, depreciation
and amortisation 116 996 277 270 -57,8% 488 264
Depreciation, amortisation
and impairments (77 645) (95 837) 19,0% (216 817)
Operating profit 39 351 181 433 -78,3% 271 448
Finance income 4 885 5 270 -7,3% 10 916
Finance expenses (22 306) (28 298) 21,2% (64 548)
Share of (loss)/profit of
equity-accounted investees,
net of taxation (279) 1 799 -115,5% (2 241)
Profit before taxation 21 651 160 204 -86,5% 215 575
Taxation (19 666) (56 753) (87 522)
Profit for the period from
continuing operations 1 985 103 451 -98,1% 128 053
Discontinued operations
(Loss)/profit for the period
from discontinued operations,
net of taxation (2 714) 28 025 32 561
(Loss)/profit for the period (729) 131 476 -100,6% 160 614
Other comprehensive income,
net of related taxation
Items that are or may be
reclassified to profit or loss
Foreign operations - foreign
currency translation differences 5 549 5 231 (2 198)
Reclassification of foreign currency
differences on disposal (724) (65 049) (65 049)
Other comprehensive income/(loss),
net of taxation 4 825 (59 818) (67 247)
Total comprehensive income
for the period 4 096 71 658 93 367
(Loss)/profit attributable to:
Owners of the Company (2 494) 88 626 104 760
Non-controlling interest 1 765 42 850 55 854
(729) 131 476 160 614
Total comprehensive income
attributable to:
Owners of the Company 772 48 136 59 242
Non-controlling interest 3 324 23 521 34 125
4 096 71 658 93 367
*6 Months ended 30 September 2016 restated for discontinued operations
STATEMENT OF CHANGES IN EQUITY
Foreign
Currency
Stated Treasury Translation Retained
Capital Shares Reserves Income
R000's R000's R000's R000's
Balance 31 March 2016 6 762 797 - 38 030 (697 704)
Profit - - - 104 760
Foreign currency
translation reserve - - (45 518) -
Share buy-back - (7 221) - -
Disposal of share interest - - - -
Dividends paid - - - -
Balance 31 March 2017 6 762 797 (7 221) (7 488) (592 944)
Loss - - - (2 494)
Foreign currency
translation reserve - - 3 266 -
Share buy-back - (692) - -
Change in ownershop - - - (5705)
Disposal of share interest - - - -
Balance 30 September 2017 6 762 797 (7 913) (4 222) (601 143)
Equity Non-controlling Total
Owners Interest Equity
R000's R000's R000's
Balance 31 March 2016 6 103 123 988 220 7 091 343
Profit 104 760 55 854 160 614
Foreign currency translation reserve (45 518) (21 729) (67 247)
Share buy-back (7 221) - (7 221)
Disposal of share interest - 9 449 9 449
Dividends paid - (5 252) (5 252)
Balance 31 March 2017 6 155 144 1 026 542 7 181 686
(Loss)/profit (2 494) 1 765 (730)
Foreign currency translation reserve 3 266 1 559 4 826
Share buy-back (692) - (692)
Change in ownership (5 705) 5 705 -
Disposal of share interest - 1 648 1 648
Balance 30 September 2017 6 149 519 1 037 219 7 186 738
STATEMENT OF CASH FLOWS
Unaudited Unaudited* Audited
30 September 30 September 31 March
2017 2016 2017
R000's R000's R000's
Cash from operating activities
Cash flows from operating activities 56 393 161 204 444 427
Net finance costs (18 815) (23 028) (49 004)
Taxes paid (27 344) (63 894) (126 327)
Net cash inflow from operating activities 10 234 74 282 269 096
Cash used in investing activities
Acquisition of property,
plant and equipment (26 650) (37 181) (78 103)
Acquisition of plant and equipment (26 650) (37 181) (69 922)
Acquisition of owner-occupied properties - - (8 181)
Proceeds from sale of property,
plant and equipment 3 323 35 237 7 393
Book value of assets disposed 1 864 35 237 4 472
Surplus on disposal 1 459 - 2 921
Movement in financial assets 2 584 1 426 2 271
Acquisition of subsidiary,
net of cash acquired - (3 749) (3 749)
Net cash flows of discontinued operations 13 900 1 378 36 928
Additions to intangible assets (18 503) (9 322) (10 073)
Loans advanced to equity
accounting investees (5 055) (5 910) (6 900)
Dividends received from equity
accounting investees - 1 375 1 375
Net cash used in investing activities (30 401) (16 746) (50 858)
Cash from (used in) financing activities
Repayment of borrowings (82 264) (95 171) (170 875)
Borrowings raised 85 726 68 799 2 877
Share buy-back (692) - (7 221)
Change in non-controlling interest 2 570 (63) -
Dividends paid to non-controlling interest - - (5 252)
Net cash from (used in) financing activities 5 340 (26 435) (180 471)
Net change in cash and cash equivalents (14 827) 31 101 37 767
Cash and cash equivalents at beginning
of the year 192 510 159 528 159 528
Effect of movements in exchange
rates on cash held 880 (269) (4 785)
Cash and cash equivalents at
end of the year 178 563 190 360 192 510
Cash and cash equivalents comprise
the following
Cash and cash equivalents 179 952 191 275 194 320
Bank balances 179 952 187 120 186 204
Cash in disposal group assets
held for sale - 4 155 8 116
Bank overdrafts (1 389) (915) (1 810)
178 563 190 360 192 510
EARNINGS, DILUTED AND HEADLINE EARNINGS PER SHARE
Unaudited Unaudited
Gross Net
R000's R000's
For the period ended 30 September 2017
Loss attributable to equity owners of
the parent (2 494)
IAS 16 gains on disposal of plant and equipment (988) (710)
IAS 16 impairment of plant and equipment 7 5
IAS 21 foreign currency translation reserve
reclassified to profit or loss 489 489
IFRS 10 gain on the loss of control
of a subsidiary (634) 271
Headline loss (2 439)
For the period ended 30 September 2016*
Earnings attributable to equity owners of
the parent 88 626
IAS 16 gains on disposal of plant and equipment (1 201) (865)
IAS 21 foreign currency translation reserve
reclassified to profit or loss (44 030) (44 030)
IFRS 10 loss on the loss of control
of a subsidiary 20 727 20 727
Headline earnings 64 458
Unaudited Unaudited*
30 September 30 September
2017 2016
Basic earnings (R'000)
(Loss)/earnings (2 494) 88 626
Continuing operations 1 336 69 520
Discontinued operations (3 830) 19 106
Headline (loss)/earnings (2 439) 64 458
Continuing operations 625 68 655
Discontinued operations (3 065) (4 197)
Basic earnings per share (cents)
(Loss)/earnings (0,56) 19,91
Continuing operations 0,30 15,61
Discontinued operations (0,86) 4,30
Headline (loss)/earnings (0,55) 14,48
Continuing operations 0,14 15,42
Discontinued operations (0,69) (0,94)
Weighted average number of shares in issue
- 30 September ('000) 444 597 445 233
Issued shares as at 30 September ('000) 445 738 445 738
Effect of own shares held ('000) (1 140) (504)
Net number of shares in issue - 30 September ('000) 444 489 444 597
Number of shares in issue - 30 September ('000) 445 738 445 738
Number of treasury shares in issue - 30 September ('000) (1 248) (1 140)
*6 Months ended 30 September 2016 restated for discontinued operations.
BASIS OF PREPARATION
The unaudited consolidated condensed results for the six months to
30 September 2017 have been prepared in accordance with International Financial
Reporting Standards (IFRS), the disclosure requirements of IAS 34: Interim Financial
Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee, the requirements of the South African Companies Act, 2008 and the
Listings Requirements of the JSE Limited. These results do not include all the
information required for a complete set of IFRS financial statements. However,
selected explanatory notes are included to explain events and transactions that are
significant to an understanding of the changes in the Group's financial position and
performance since the last annual consolidated financial statements as at and for the
year ended 31 March 2017.
These results have been prepared under the supervision of the Financial Director,
A S Lee (CA) SA, and have not been audited or reviewed by the Group's auditors,
Grant Thornton Johannesburg Partnership.
SIGNIFICANT ACCOUNTING POLICIES
The unaudited consolidated condensed results have been prepared under the historical
cost convention, except for the revaluation of financial instruments. The accounting
policies adopted are consistent with those followed in the preparation of the Group's
annual financial statements for the year ended 31 March 2017.
STATED CAPITAL
As at 30 September 2017, the Company repurchased 1 248 259 N ordinary shares
which are being treated as treasury shares.
DISPOSAL GROUP ASSETS/LIABILITIES HELD FOR SALE
The sale of operations reported as disposal group assets/liabilities held for sale
at 31 March 2017 that include Lalela Music SA (Pty) Ltd (a 75% subsidiary),
Lalela Music LLC (an 85% subsidiary of Longkloof Limited Group), e.Botswana
Proprietary Limited (a 49% subsidiary) and e.tv Botswana Proprietary Limited
(an 80% subsidiary) have been finalised effective 30 June 2017 for the Lalela
entities and 30 September 2017 for the Botswana entities.
The commercial building at 73 Richfond Circle, Ridgeside, Umhlanga, KwaZulu-Natal
owned by Sabido Properties Proprietary Limited remains classified as an asset held
for sale.
Discontinued operations as disclosed in the statement of comprehensive income
consist of the following:
Unaudited Unaudited
30 September 30 September
2017 2016
R000's R000's
Revenue
Longkloof Limited Group - 3 303
e.Botswana Proprietary Limited and
e.tv Botswana Proprietary Limited 1 557 1 596
TVPC Media Proprietary Limited - 749
Shibula Lodge and Spa Proprietary Limited - 363
Lalela Music Proprietary Limited and Lalela Music LLC - 3 736
Total revenue 1 557 9 747
(Loss)/profit from discontinued operations
Longkloof Limited Group (865) 29 383
e.Botswana Proprietary Limited and e.tv Botswana
Proprietary Limited (8 060) (544)
TVPC Media Proprietary Limited - 340
Shibula Lodge and Spa Proprietary Limited (952)
Lalela Music Proprietary Limited and Lalela Music LLC 6 211 (202)
Total (loss)/profit (2 714) 28 025
Disposal groups held for sale as disclosed in the statement of financial position
comprise the following:
Property, Plant Other Total
Equipment Assets Assets
R000's R000's R000's
Assets
30 September 2017
Sabido Properties Proprietary Limited 22 985 - 22 985
Total assets 22 985 - 22 985
30 September 2016
Longkloof Limited Group - 6 465 6 465
e.Botswana Proprietary Limited 784 2 629 3 413
e.tv Botswana Proprietary Limited 1 865 20 1 885
Total assets 2 649 9 114 11 763
Unaudited Unaudited
30 September 30 September
2017 2016
R000's R000's
Liabilities
Longkloof Limited Group subsidiaries and associates - (702)
e.Botswana and e.tv Botswana - (14)
Total liabilities - (716)
CHANGE IN COMPARATIVES
The results of discontinued operations have been separately disclosed on the face of
the statement of comprehensive income.
CHANGES IN DIRECTORATE AND COMPANY SECRETARIAL
Chief executive officer, A van der Veen, was appointed to the board on
14 November 2017.
DIVIDEND TO SHAREHOLDERS
The directors have resolved not to declare an interim dividend for the period ended
30 September 2017.
On behalf of the board
A van der Veen A S Lee
Chief Executive Officer Financial Director
Cape Town
22 November 2017
CORPORATE INFORMATION
eMEDIA HOLDINGS LIMITED
The company's shares are under the Media Sector of the JSE.
COMPANY REGISTRATION NUMBER
1968/011249/06 (Incorporated in the Republic of South Africa)
JSE SHARE CODES
Ordinary Shares: EMH IZIN: ZAE000208898
N ordinary Shares: EMH IZIN ZAE000209524
REGISTERED OFFICE
5 Summit Road
Dunkeld West
Hyde Park
Johannesburg, 2196
Private Bag X9944
Sandton, 2146
DIRECTORS
J A Copelyn* (Chairperson)
A van der Veen (Chief executive officer)
A S Lee (Financial director)
T G Govender*
V E Mphande*^
L Govender*^
R D Watson*^
(* Non-executive ^ Independent)
COMPANY SECRETARY
Junadi van der Merwe
AUDITORS
Grant Thornton Johannesburg Partnership
Practice Number 903485
@Grant Thornton
Wanderers Office Park
52 Corlett Drive
Illovo, 2196
Private Bag X10046
Sandton, 2146
BANKERS
Standard Bank of South Africa
SPONSOR
Investec Bank Limited
100 Grayston Drive, Sandown, Sandton, 2196
TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue,
Rosebank, 2196
PO Box 61051
Marshalltown, 2107
WEBSITE
www.emediaholdings.co.za
Date: 22/11/2017 10:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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