Wrap Text
Reviewed Results for the year ended 31 March 2018
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")
REVIEW
For the year ended 31 March 2018
CHAIRMAN'S REVIEW
Trading conditions for the period under review remained tough. Revenue increased by 10% to R262,5 million (2017: R238,6
million) and total comprehensive income attributable to equity holders decreased by 2% to R47,7 million (2017: R48,6
million) mainly as a result of Classic1027 and Moneyweb losses and acquisition transaction costs. Earnings per share
were 541,4 cents (2017:609,2 cents) and headline earnings per share were 541,5 cents (2017:606,9 cents).
The group generated R30,8 million (2017: R51,1 million) in cash from its operating activities during the year, after
paying tax of R20,2 million (2017: R17,8 million).The group spent R3,7 million (2017: R6,4 million) on capital
expenditure and paid R11,8 million (2017: R11,2 million) to repurchase 230 700 (2017:155 144) of its own shares. During
August 2017 the company acquired Moneyweb for R9,4 million cash and the issue of 277 210 shares. In December 2017 AME
acquired a stake in Classic1027 for R7 million. During the year the company paid out dividends of R28 million (2017:
27,2 million) to shareholders of the company and ended the year with cash resources of R94,5 million (2017: R119,2
million).
Operations
Low business confidence and the restructuring process of our acquisitions resulted in demanding trading conditions
placing further strain on our resources. Innovation and tight cost control remain imperatives.
Algoa FM had another successful year. National and direct revenue showed marginal growth year on year. The Big Walk for
CANSA was a great commercial success and Algoa FM was honoured by the industry by winning two Liberty Radio Awards for
Best Community Project and Best Promotion/Stunt. At the awards, Algoa FM also won the Best Daytime Show. Dave Tiltmann,
Algoa FM's Managing Director was inducted into the Radio Hall of Fame. Finally, Algoa FM won the ultimate accolade and
grand prix award of Commercial Radio Station of the Year.
Central Media Group ("CMG") encountered challenging trading conditions during the year, with mixed results from the
various business units. OFM delivered a decline in profitability due to costs rising above a flat revenue performance.
Digital Platforms grew Revenue 17.6% as it continues to build its development client portfolio, contributing positively
to profitability of the group. Redstar Agency grew revenue by 57% through the introduction of new products and services,
which translated into an increase of profitability year on year. Mahareng Publishing experienced the ongoing contraction
in print advertising with a slight increase in revenue but a decline in profitability because of increased costs in the
printing and distribution of the newspapers. CMG remains well positioned to offer a range of media and marketing
solutions to businesses looking to target Central South Africa.
RadioHeads' profitability improved from the previous year. It has re-focused 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, while establishing itself as a preferred supplier within the agency space.
In order to grow its business and ensure its relevance into the future, United Stations has expanded its portfolio of
radio stations to eight and strengthened its offering across digital, events, video, online audio and content creation.
These mostly once-off costly initiatives resulted in the company not being profitable for this year. Going into
2018/2019, the United Stations proposition is more compelling, as it will continue to focus on growing its platforms,
while presenting itself as a multi media solution in which radio is the core of a wider offering.
The group acquired an interest in Classic1027, and is in the process of turning the loss-making station around, partly
by re-establishing the collaboration between Classic1027 and Moneyweb.
Restructuring of the Moneyweb group resulted in a more cost-efficient business model. The sales and publishing division
was also moved into the group sales house, United Stations. Moneyweb Radio has expanded into an extra 30 minute timeslot
between 18h00 and 19h00 (Monday - Thursday) on SAFM and also continues to produce a daily one hour show on RSG Geldsake,
which is the largest listened to business show on radio in South Africa. Moneyweb launched the first business breakfast
show on radio in Gauteng on Classic1027 between 07h00 and 08h00 on weekdays. Revenues for the financial period since
acquisition largely comprised of digital sales on Moneyweb.co.za. Our radio expertise should enhance Moneyweb's business
shows on the SABC stations.
Dividends
An Interim dividend (dividend no 12) of 100 cents per ordinary share (gross) was declared for the period ended
30 September 2017 (2017:100 cents gross) and paid on 29 January 2018. A final dividend (dividend no 13) for the year ended
31 March 2018 of 200 cents per ordinary share (gross) (2017: 250 cents per share gross) is declared.
Declaration of final dividend no 13
The board declared a final dividend (dividend no 13) of 200,00 cents per ordinary share (gross) for the year ended
31 March 2018. 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 Dividend Witholding Tax rate is 20%
- the gross dividend amount is 200.00 cents per ordinary share for shareholders exempt from DWT
- the net dividend amount is 160,00 cents per ordinary share for shareholders liable for DWT
- the company has 8 100 934 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 Tuesday, 10 July 2018
Shares will trade ex-dividend from Wednesday, 11 July 2018
The record date will be Friday, 13 July 2018 and payment will be made on Monday,16 July 2018
Share certificates may not be dematerialised/rematerialised between Wednesday, 11 July 2018 and Friday, 13 July 2018,
both days inclusive.
Prospects
The board expects the trading conditions for the 2019 financial year to remain challenging while turning our two
acquisitions around.
ACG MOLUSI
Independent Non-executive Chairman
8 June 2018
The board of directors are responsible for the preparation of the provisional consolidated financial statements in
accordance with the requirements of the JSE Listings Requirements for preliminary reports and the requirements of the
Companies Act of South Africa as applicable to summarised financial statements, and for such internal controls as the
directors deem necessary to ensure that the provisional consolidated financial statements are free from material
misstatement due to fraud or error.
Michelle Mynhardt (CA/SA)
Financial director
These results have been reviewed by Grant Thornton and their unqualified review report is available for inspection at
the company's registered office.
The auditor's reviewed report does not necessarily report on all of the information contained in this
announcement/financial results. 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 review report with the accompanying
financial information from the issuers' registered office.
Summarised notes to the provisional financial statements
1.Basis of preparation
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, IAS 34: Interim Financial Reporting, the
Listings Requirements of the Johannesburg Stock Exchange and the SAICA Financial Reporting Guides 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 2017.
2. Business combinations
Moneyweb Group ("Moneyweb")
AME acquired 100% of Moneyweb on 21 August 2017. The purchase price was settled by the issue of 277 210 new AME shares
and a cash consideration of R9,4 million. The goodwill paid relates to group synergies that will be achieved.
The acquired business contributed incremental revenues of R12,7 million and a loss before tax of R3.2 million to the
group for the period from date of acquisition to 31 March 2018. Had the acquisition occurred on 1 April 2017 group
revenue would have been R24,6 million higher and the comprehensive income attributable to equity holders before taxation
would have been R8,6 million lower. The assets and liabilities acquired, for which final fair values have been
determined, are listed in the table below.
Classic1027
On 15 December 2017 AME acquired a direct shareholding of 7.85% in Classic1027. In addition AME acquired minority
shareholdings in shareholders holding a 77,06% shareholding in Classic1027, bringing our effective shareholding in
Classic1027 to 45.9%. Classic1027 was consolidated in line with the requirements of IFRS 10. The purchase price was R7
million. The goodwill paid relates to the economies of scale that can be achieved and group synergies.
The acquired business contributed incremental revenues of R5,6 million and a loss before tax of R1,3 million to the
group for the period from date of acquisition to 31 March 2018. Had the acquisition occurred on 1 April 2017 group
revenue would have been R13,4 million higher and the comprehensive income attributable to equity holders would have been
R7,1 million lower. The assets and liabilities acquired, for which final fair values have been determined, are listed in
the table below.
Business combinations Moneyweb Classic Total
Property plant and equipment 485 1 000 1 485
Trademarks 2 000 25 000 27 000
Other financial instruments 28 - 28
Deferred taxation on trademarks (447) (5 600) (6 047)
Deferred tax raised on assessed losses at acquisition 4 248 5 600 9 848
Other current assets excluding bank and cash resources 2 239 1 145 3 384
Cash and cash equivalents 13 186 (29) 13 157
Non-current liabilities - (22 591) (22 591)
Current liabilities (4 458) (10 610) (15 068)
Fair value of identifiable net assets acquired 17 281 (6 085) 11 196
Non-controlling interests measured at their share of the fair value of net assets - 3 294 3 294
Amount capitalised 17 281 (2 791) 14 490
Total purchase consideration 26 326 7 000 33 326
Issue of shares 277 - 277
Share premium 16 619 - 16 619
Cash paid 9 430 5 000 14 430
Contingent consideration - 2 000 2 000
Goodwill arising on acquisition 9 045 9 791 18 836
Cash consideration 9 430 5 000 14 430
Less: Cash and cash equivalents in subsidiary acquired 13 186 (29) 13 157
Net cash inflow/(outflow) on acquisition 3 756 (5 029) (1 273)
3. Related party transactions
There has been no significant changes in related party relationships since the previous year.
Other than in the normal course of business, there have been no other transactions during the year with related parties.
4. Other financial Instruments
GROUP
2018 2017
R'000 R'000
Level 1 29 -
Level 2 725 -
Level 3 20 327 10 240
21 081 10 240
Level 3 fair value determined by valuation that uses inputs that are not based on observable market data.
Investments are valued based on discounted cash flow models. Should the variables differ by 1% the value of the
investments will decrease between 8% and 10%. The discount rates used vary between 13,02% and 18,02%.
5. Events after the reporting period
To the best of the directors' knowledge, there have been no material events after the reporting period up to the date of
signature of this report that will materially affect the ability of the user to make proper financial investment decisions.
CONSOLIDATED PROVISIONAL STATEMENTS OF COMPREHENSIVE INCOME
Reviewed Audited
Year ended year ended
31 March 31 March
% 2018 2017
change R'000 R'000
Revenue 10% 262 534 238 593
Cost of Sales 32% (78 986) (59 680)
Gross profit 183 548 178 913
Operating expenses (124 077) (114 796)
Operating profit (7%) 59 471 64 117
Investment income 2 480 4 250
Finance income 7 763 7 856
Finance cost (81) (6)
Profits attributable to associates 448 631
Net profit before taxation (9%) 70 081 76 848
Taxation (19 354) (20 791)
SA normal taxation (19 060) (19 606)
Deferred taxation (294) (1 185)
Profit for the year (10%) 50 727 56 057
Other comprehensive income:
Items that will be reclassified subsequently to profit and loss
Available-for-sale financial assets 3 958 -
Fair value adjustment 5 100 -
Deferred tax relating to fair value adjustment (1 142) -
Total comprehensive income for the year (2%) 54 685 56 057
Profit attributable to:
Non-controlling interest holders (6%) 7 005 7 413
Equity holders of the parent (10.1%) 43 722 48 644
50 727 56 057
Total comprehensive income attributable to:
Non-controlling interest holders 7 005 7 413
Total comprehensive income attributable to holders of the parent 47 680 48 644
54 685 56 057
Earnings per share (cents) (11.1%) 541.4 609.2
Headline earnings per share (cents) (10.8%) 541.5 606.9
Dividends per share (cents) (interim and final) 300 350
Weighted average number of shares in issue (000's) 8 076 7 985
Headline earnings reconciliation
Profit attributable to equity holders 43 722 48 644
Profit on disposal of investment/fixed assets 11 (257)
Tax on disposal of assets (3) 72
Headline earnings 43 730 48 459
CONSOLIDATED PROVISIONAL STATEMENTS OF FINANCIAL POSITION
Reviewed Audited
31 March 31 March
2018 2017
R'000 R'000
Assets
Non-current assets 196 836 138 630
Property, plant and equipment 72 371 73 822
Goodwill 58 262 39 426
Trademarks 27 000 -
Investments in associated companies 4 582 4 509
Other financial instruments 21 081 10 240
Deferred taxation 13 540 10 633
Current assets 151 713 167 648
Trade receivables 48 275 44 841
Other receivables 8 848 3 532
Tax paid in advance 45 108
Cash and cash equivalents 94 545 119 167
Total assets 348 549 306 278
Equity and liabilities
Total equity 261 882 230 865
Non-current liabilities 544 -
Deferred tax liability 544 -
Current liabilities 86 123 75 413
Trade payables 14 684 14 361
Other payables 68 742 57 215
Dividend payable 1 736 1 642
Taxation 961 2 195
Total equity and liabilities 348 549 306 278
CONSOLIDATED PROVISIONAL STATEMENTS OF CHANGES IN EQUITY
Reviewed Audited
Year ended year ended
31 March 31 March
2018 2017
R'000 R'000
Issued capital
Balance at beginning of year 7 965 8 120
New shares issued 277 -
Shares repurchased and cancelled (230) (155)
Balance at end of year 8 012 7 965
Share premium
Balance at beginning of year - 9 097
New shares issued 14 736 -
Shares repurchased and cancelled (10 890) (9 097)
Balance at end of the year 3 846 -
Retained profit
Balance at beginning of year 218 678 199 342
Total profit for the year 43 722 48 644
Change in shareholding (4 130) -
Dividend (28 097) (27 389)
Shares repurchased and cancelled (708) (1 919)
Balance at end of year 229 465 218 678
Non-distributable reserve
Balance at beginning of the year - -
Other comprehensive income 3 958 -
Balance at end of year 3 958 -
Non-controlling interests
Balance at beginning of year 4 222 2 056
Preference shares held by non-controlling interest holder 10 178 -
Change in shareholding 4 130 -
Acquisition of NCI due to business combination (3 294) -
Share of total comprehensive income for the year 7 005 7 413
Share of dividend (5 640) (5 247)
Balance at end of year 16 601 4 222
Total capital and reserves 261 882 230 865
CONSOLIDATED PROVISIONAL STATEMENTS OF CASH FLOWS
Reviewed Audited
Year ended year ended
31 March 31 March
2018 2017
R'000 R'000
Cash generated by operating activities 63 391 70 534
Net interest received 7 682 7 850
Taxation paid (20 240) (17 766)
Increase in working capital (19 986) (9 563)
- Increase in trade and other receivables (2 367) (2 421)
- (Decrease) in trade and other payables (17 619) (7 142)
Cash flows from operating activities 30 847 51 055
Cash flows from investing activities (8 116) (2 303)
- increase in investments and loans (5 637) (795)
- acquisition of business combination (1 273) -
- purchase of property, plant and equipment (3 712) (6 428)
- other 26 670
- dividends received 2 480 4 250
Cash flows from financing activities (47 353) (43 637)
- dividends paid to equity holders (28 003) (27 219)
- share issue cost (1 882) -
- dividends paid to non-controlling interest holder (5 640) (5 247)
- repurchase of shares (11 828) (11 171)
Net decrease in cash and cash equivalents (24 622) 5 115
Cash and cash equivalents at beginning of year 119 167 114 052
Cash and cash equivalents at end of year 94 545 119 167
SEGMENTAL REPORTING
Reviewed Audited
Year ended year ended
31 March 31 March
2018 2017
R'000 R'000
Revenue
Radio Broadcasting 210 831 198 802
Media services 51 472 39 283
Corporate 231 508
Total 262 534 238 593
Profitability
Radio Broadcasting 60 471 60 333
Media services (3 412) 2 184
Corporate 2 412 1 600
Total operating profit 59 471 64 117
Profit from associates 448 631
Investment income 2 480 4 250
Interest received 7 763 7 856
Interest paid (81) (6)
Taxation (19 354) (20 791)
Total profit for the year 50 727 56 057
Assets
Radio Broadcasting 108 408 76 571
Media services 67 220 46 450
Corporate 78 376 64 090
Total 254 004 187 111
Liabilities
Radio Broadcasting 53 469 49 863
Media services 23 689 19 535
Corporate 9 509 6 015
Total 86 667 75 413
Capital expenditure
Radio Broadcasting 3 210 4 632
Media services 197 250
Corporate 305 1 546
Total 3 712 6 428
Depreciation
Radio Broadcasting 5 842 5 510
Media services 465 615
Corporate 303 313
Total 6 610 6 438
Due to the acquisitions we decided to rename one of our segments to media services as it is no longer just radio
services.
CORPORATE INFORMATION
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")
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) Ltd
Registration number 2004/003647/07
Rosebank Towers, 15 Biermann Avenue, Rosebank
PO Box 61051. Marshalltown, 2107
Telephone: +27 11 370 5000
Telefax: +27 11 688 5238
SPONSOR
Arbor Capital Sponsors (Pty) Ltd
Registration number 2006/0033725/07
20 Stirrup Lane
Woodmead Office Park
Corner Woodmead Drive and Van Reenens Avenue
Woodmead, 2191
Suite#439, Private Bag X29
Gallo Manor, 2052
DIRECTORS
ACG Molusi (Independent Non-executive Chairman)
MJ Prinsloo (Independent Non-executive)
N Sooka (Independent Non-executive)
M Mynhardt (Executive Financial)
AJ Isbister (Executive)
COMPANY SECRETARY
C Roberts
Date: 08/06/2018 10:47:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
