Wrap Text
Interim Results for the half year ended 30 September 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")
INTERIM RESULTS
For the half year ended 30 September 2018
CHAIRMAN'S REVIEW
Trading conditions for the period under review remained tough. Revenue increased by 20% to
R140 million (2017: R117 million) mainly as a result of the acquisition of Moneyweb and a shareholding
in Classic1027. Total comprehensive income attributable to equity holders decreased by 19% to
R13,4 million (2017:R16,7 million) mainly due to the losses still being incurred by Classic1027 and
Moneyweb. Earnings per share were 168,4 cents (2017: 208,7 cents) and headline earnings per share
were 168,5 cents (2017:208,7 cents).
The group generated R12,5 million (2017: R19 million) in cash from its operating activities during
the period after paying tax of R9,2 million (2017: R10,7 million). The group spent R10 million (2017:
R1,7 million) on capital expenditure including R5,5 million on a new home for Algoa FM. During the
period, the company paid dividends of R16 million (2017: 20,1 million) to shareholders of the company
and ended with cash resources of R83,8 million (2017: R110,8 million).
OPERATIONS
Low business confidence resulted in demanding trading conditions. The restructuring and turnaround
of Moneyweb and Classic1027 placed further strain on our resources. Innovation and tight cost control
remain imperatives.
Algoa FM delivered a solid performance year to date with both national and direct sales marginally
up on last year. Cost containment remains a priority whilst the station's listenership remained stable.
Algoa FM's flagship event, the Big Walk for Cancer, was a huge success with a record number of
participants taking part in the 5km event. The Big Walk is now the Eastern Cape's largest family
participation event. Algoa FM has recently announced that it will during October 2019 be moving to
state- of-the-art new premises in the Baakens Valley, Port Elizabeth. The building is owned and being
developed by the group's property company.
The sharp decline in Central Media Group's revenue from national advertisers resulted in a decline
in net advertising revenue of 17% when compared to the same period of last year. Cost containment
has been effective, and operating expenditure only increased by 3,5% against the previous period.
New initiatives are being launched to offset the decline, caused principally by digital media owners.
Mahareng performed extremely well, increasing EBITDA 98% year-on-year. A raft of new products,
and closure of loss-making newspapers were the key drivers for this growth. Redstar Agency has seen
a significant cutback in effective rates for promotions from national agencies, which coupled with the
loss of two major projects, resulted in a 51% decrease in EBITDA. Measures are being put in place to
create new event management opportunities. Digital Platforms continued to grow with larger digital
development projects, and this resulted in an EBITDA growth of 27% against last year.
RadioHeads continued its good growth, despite the tough trading conditions.
The decline in United Stations' revenues resulted in a loss for the period. This was due mainly to
the cost associated with managing the evolution of the business model across the digital divide and
revenue from new partners not coming on line as quickly as forecasted. This loss in revenue is unlikely
to be recovered in the remaining six months. While retaining focus on its core radio platforms, United
Stations has made significant progress in building bespoke solutions and creating new opportunities
for its customers, which is evidenced by a number of new products spanning programmatic buying,
online audio, activations, events and content creation.
During the period Classic1027 repositioned the programming, sales and staffing structure of the
business. A key driver for the business is the increase in audience by attracting a younger, more diverse
listener with the aim of increasing revenue. It has taken longer than expected to turn this business
around, but we are confident that it will become a profitable venture.
Moneyweb continued to streamline its business operations with the key focus being on both digital
and radio content provision. Management succeeded in reducing costs across the board at the
company. Digital sales on Moneyweb.co.za has been above expectation, with the sales team now
forming part of United Stations. The radio team continues to provide excellent content across three
stations, namely Classic1027, SAFM and RSG. Moneyweb is currently in negotiations with the SABC
regarding a new advertising sales agreement.
LICENCE RENEWALS
All three radio stations have submitted their licence applications and are awaiting ICASA's decision.
DIVIDENDS
The final dividend (Dividend No 13) of 200 cents per ordinary share (gross) was declared for the year
ended 31 March 2018 (2017: 250 cents gross) and paid on 16 July 2018. An interim dividend (Dividend
No. 14) for the period ended 30 September 2018 of 80 cents per ordinary share (gross) (2017: 100 cents
per ordinary share (gross) is proposed.
DECLARATION OF INTERIM DIVIDEND NO 14
The board declared an interim dividend (Dividend No.14) of 80,00 cents per ordinary share (gross)
for the period ended 30 September 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 local Dividend withholding Tax rate is 20%
- the gross dividend amount is 80.00 cents per ordinary share for shareholders exempt from DWT
- the net dividend amount is 64,00 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, 8 January 2019.
Shares will trade ex-dividend from Wednesday, 9 January 2019.
The record date will be Friday, 11 January 2019 and payment will be made on Monday, 14 January 2019.
Share certificates may not be dematerialised/rematerialised between Wednesday, 9 January 2019 and
Friday, 11 January 2019, both days inclusive.
PROSPECTS
The board expects the trading conditions for the remaining six months to remain challenging while
turning our two acquisitions around is taking longer than expected.
ACG MOLUSI
Independent Non-executive Chairman
27 November 2018
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 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 2018.The adoption of IFRS 9 and IFRS 15 have no material impact on these condensed results.
These results are unaudited.
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
six months to six months to year ended
30 September 30 September 31 March
% 2018 2017 2018
change R'000 R'000 R'000
Revenue 20% 140 003 117 048 262 534
Cost of sales 32% (39 646) (29 720) (78 986)
Gross profit 100 357 87 328 183 548
Operating expenses (84 385) (65 098) (124 077)
Operating profit (26%) 15 972 22 230 59 471
Investment income 1 500 1 480 2 480
Finance income 2 601 3 816 7 763
Finance cost (8) - (81)
Equity accounted earnings
from associates 170 98 448
Net profit before taxation (25%) 20 235 27 624 70 081
Taxation (5 201) (7 385) (19 354)
SA normal taxation (8 599) (8 834) (19 060)
Deferred taxation 3 398 1 449 (294)
Profit for the period (24%) 15 034 20 239 50 727
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 period 15 034 20 239 54 685
Profit attributable to:
Non-controlling interest holders 1 543 3 501 7 005
Equity holders of the parent 13 491 16 738 43 722
15 034 20 239 50 727
Total comprehensive income
attributable to:
Non-controlling interest holders 1 543 3 501 7 005
Equity holders of the parent 13 491 16 738 47 680
15 034 20 239 54 685
Earnings per share (cents) (19.3%) 168.4 208.7 541.4
Headline earnings per share (cents) (19.3%) 168.5 208.7 541.5
Dividends per share (cents) 80 100 300
Weighted average number of shares in
issue (000's) 8 012 8 022 8 076
Headline earnings reconciliation
Profit attributable to equity holders 13 491 16 738 43 722
Profit on disposal of fixed assets 8 3 11
Tax on disposal of fixed assets (2) (1) (3)
Headline earnings 13 497 16 740 43 730
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 September 30 September 31 March
2018 2017 2018
R'000 R'000 R'000
ASSETS
Non-current assets 205 446 154 119 196 836
Property, plant and equipment 78 888 72 789 72 371
Goodwill 58 262 51 940 58 262
Other intangible assets 27 000 2 000 27 000
Investments in associated companies 4 401 4 600 4 582
Other financial instruments 20 355 10 377 21 081
Deferred taxation 16 540 12 413 13 540
Current assets 140 790 163 951 151 713
Trade receivables 53 844 47 292 48 275
Other receivables 3 130 5 297 8 848
Tax paid in advance 45 559 45
Cash and cash equivalents 83 771 110 803 94 545
Total assets 346 236 318 070 348 549
EQUITY AND LIABILITIES
Total equity 260 857 237 242 261 882
Non-current liabilities 146 - 544
Deferred tax liability 146 - 544
Current liabilities 85 233 80 828 86 123
Trade payables 25 683 10 785 14 684
Other payables 57 451 67 531 68 742
Dividend payable 1 736 1 708 1 736
Taxation 363 804 961
Total equity and liabilities 346 236 318 070 348 549
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY
Unaudited Unaudited Audited
six months to six months to year ended
30 September 30 September 31 March
2018 2017 2018
R'000 R'000 R'000
Issued capital
Balance at beginning of period 8 012 7 965 7 965
New shares issued - 277 277
Shares repurchased and cancelled - (85) (230)
Balance at end of period 8 012 8 157 8 012
Share premium
Balance at beginning of period 3 846 - -
New shares issued - 14 736 14 736
Shares repurchased and cancelled - (4 304) (10 890)
Balance at end of the period 3 846 10 432 3 846
Retained earnings
Balance at beginning of period 229 465 218 678 218 678
Total earnings for the period 13 491 16 738 43 722
Change in shareholding - - (4 130)
Dividend declared (16 059) (20 106) (28 097)
Shares repurchased and cancelled - (707) (708)
Balance at end of period 226 897 214 603 229 465
Non-Distributable Reserve
Balance at beginning of period 3 958 - -
Other comprehensive income - - 3 958
Balance at end of period 3 958 - 3 958
Non-controlling interests
Balance at beginning of period 16 601 4 222 4 222
Preference shares held by non-controlling
interest holder - - 10 178
Change in shareholding - - 4 130
Acquisition NCI due to business combination - - (3 294)
Comprehensive income for the period 1 543 3 501 7 005
Share of dividend - (3 673) (5 640)
Balance at end of period 18 144 4 050 16 601
Total capital and reserves 260 857 237 242 261 882
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Unaudited Unaudited Audited
six months to six months to year ended
30 September 30 September 31 March
2018 2017 2018
R'000 R'000 R'000
Cash generated by operating activities 19 215 25 443 63 391
Net interest received 2 593 3 816 7 682
Taxation paid (9 196) (10 686) (20 240)
Decrease in working capital (142) 429 (19 986)
- decrease/(increase) in trade and
other receivables 149 (1 899) (2 367)
- (decrease)/increase in trade and
other payables (291) 2 328 (17 619)
Cash flows from operating activities 12 470 19 002 30 847
Cash flows from investing activities (7 185) 3 358 (8 116)
- decrease/(increase) in investments and loans 1 076 (182) (5 637)
- acquisition of business combination - 3 756 (1 273)
- purchase of property plant and equipment (9 951) (1 708) (3 712)
- other 190 12 26
- dividends received 1 500 1 480 2 480
Cash flows from financing activities (16 059) (30 724) (47 353)
- dividends paid to equity holders (16 059) (20 073) (28 003)
- dividends paid to non-controlling
interest holder - (3 673) (5 640)
- share issue cost - (1 882) (1 882)
- repurchase of shares - (5 096) (11 828)
Net decrease in cash and cash equivalents (10 774) (8 364) (24 622)
Cash and cash equivalents at beginning of period 94 545 119 167 119 167
Cash and cash equivalents at end of period 83 771 110 803 94 545
SEGMENTAL REPORTING
Unaudited Unaudited Audited
six months to six months to year ended
30 September 30 September 31 March
2018 2017 2018
R'000 R'000 R'000
Revenue
Radio broadcasting 108 089 104 865 210 831
Media services 31 914 11 964 51 472
Corporate - 219 231
Total 140 003 117 048 262 534
Profitability
Radio broadcasting 21 539 28 567 60 471
Media services (5 210) (3 149) (3 412)
Corporate (357) (3 188) 2 412
Total operating profit 15 972 22 230 59 471
Profits from associates 170 98 448
Investment income 1 500 1 480 2 480
Interest received 2 601 3 816 7 763
Interest paid (8) - (81)
Taxation (5 201) (7 385) (19 354)
Total comprehensive income for the year 15 034 20 239 50 727
Assets
Radio broadcasting 114 927 66 301 108 408
Media services 68 521 21 992 67 220
Corporate 79 017 118 974 78 376
Total 262 465 207 267 254 004
Liabilities
Radio broadcasting 49 453 46 167 53 469
Media services 28 356 25 911 23 689
Corporate 7 570 8 750 9 509
Total 85 379 80 828 86 667
Capital expenditure
Radio broadcasting 3 742 1 495 3 210
Media services 612 77 197
Corporate 5 598 137 305
Total 9 952 1 709 3 712
Depreciation
Radio broadcasting 2 851 2 832 5 842
Media services 251 222 465
Corporate 133 156 303
Total 3 235 3 210 6 610
CORPORATE INFORMATION
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 (Proprietary) Limited
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 (Proprietary) Limited
Registration number 2006/033725/07
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)
J Edwards (Independent Non-executive)
MJ Prinsloo (Independent Non-executive)
N Sooka (Independent Non-executive)
K Williams-Thipe (Independent Non-executive)
AJ Isbister (Executive)
M Mynhardt (Executive Financial)
COMPANY SECRETARY
C Roberts
Date: 27/11/2018 12:16:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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