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Interim Results for the Six Months ended 30 September 2017
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 six months ended 30 September 2017
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
six months to six months to year ended
30 September 30 September 31 March
% 2017 2016 2017
change R'000 R'000 R'000
Revenue (2%) 117 048 119 421 238 593
Cost of sales (9%) (29 720) (32 573) (59 680)
Gross profit 87 328 86 848 178 913
Operating expenses (65 098) (62 970) (114 796)
Operating profit (7%) 22 230 23 878 64 117
Investment income 1 480 2 000 4 250
Finance income 3 816 3 848 7 856
Finance cost - - (6)
Profits attributable to associates 98 148 631
Net profit before taxation (8%) 27 624 29 874 76 848
Taxation (7 385) (8 034) (20 791)
SA normal taxation (8 834) (9 190) (19 606)
Deferred taxation 1 449 1 156 (1 185)
Total comprehensive income for the period (7%) 20 239 21 840 56 057
Total comprehensive income attributable to:
Non-controlling interest holders 3 501 3 407 7 413
Equity holders of the parent (9%) 16 738 18 433 48 644
Earnings per share (cents) (9%) 208.7 229.8 609.2
Headline earnings per share (cents) (8%) 208.7 226.7 606.9
Dividends per share (cents) 100 100 350
Weighted average number of shares in issue ('000) 8 022 8 022 7 985
Headline earnings reconciliation
Profit attributable to equity holders 16 738 18 433 48 644
Profit on disposal of fixed assets 3 (249) (257)
Tax on disposal of assets (1) - 72
Headline earnings 16 740 18 184 48 459
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Unaudited Unaudited Audited
six months to six months to year ended
30 September 30 September 31 March
2017 2016 2017
R'000 R'000 R'000
Cash generated by operating activities 25 443 27 200 70 534
Net interest received 3 816 3 848 7 850
Taxation paid (10 686) (9 259) (17 766)
Decrease in working capital 429 5 780 (9 563)
Cash flows from operating activities 19 002 27 569 51 055
Cash flows from investing activities 1 476 (2 361) (2 303)
-Cash flow from investing activities other (2 280) (2 361) (2 303)
-Cash flow from business acquisition 3 756 - -
Cash flows from financing activities* (28 842) (30 997) (43 637)
Net decrease in cash and cash equivalents (8 364) (5 789) 5 115
Cash and cash equivalents at beginning of period 119 167 114 052 114 052
Cash and cash equivalents at end of period 110 803 108 263 119 167
* Dividends paid and shares repurchased
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 September 30 September 31 March
2017 2016 2017
R'000 R'000 R'000
ASSETS
Non-current assets 154 119 141 386 138 630
Property, plant and equipment 72 789 74 206 73 822
Goodwill 51 940 39 426 39 426
Trademark 2 000 - -
Investments 14 977 14 781 14 749
Deferred taxation 12 413 12 973 10 633
Current assets 163 951 153 331 167 648
Trade receivables 47 292 40 419 44 841
Other receivables 5 297 3 972 3 532
Tax paid in advance 559 677 108
Cash and cash equivalents 110 803 108 263 119 167
Total assets 318 070 294 717 306 278
EQUITY AND LIABILITIES
Total equity 237 242 209 338 230 865
Current liabilities 80 828 85 379 75 413
Trade payables 10 785 14 796 14 361
Other payables 67 531 68 136 57 215
Dividend payable 1 708 1 592 1 642
Taxation 804 855 2 195
Total equity and liabilities 318 070 294 717 306 278
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY
Unaudited Unaudited Audited
six months to six months to year ended
30 September 30 September 31 March
2017 2016 2017
R'000 R'000 R'000
Issued capital
Balance at beginning of period 7 965 8 120 8 120
New shares issued 277 - -
Shares repurchased and cancelled (85) (155) (155)
Balance at end of period 8 157 7 965 7 965
Share premium
Balance at beginning of period - 9 097 9 097
New shares issued 14 736 - -
Shares repurchased and cancelled (4 304) (9 097) (9 097)
Balance at end of the period 10 432 - -
Retained profit
Balance at beginning of period 218 678 199 342 199 342
Total comprehensive income for the period 16 738 18 433 48 644
Shares repurchased and cancelled (707) - (1 919)
Dividend (20 106) (21 865) (27 389)
Balance at end of period 214 603 195 910 218 678
Non-controlling interests
Balance at beginning of period 4 222 2 056 2 056
Share of total comprehensive income for the period 3 501 3 407 7 413
Share of dividend (3 673) - (5 247)
Balance at end of period 4 050 5 463 4 222
Total capital and reserves 237 242 209 338 230 865
SEGMENTAL REPORTING
Unaudited Unaudited Audited
six months to six months to year ended
30 September 30 September 31 March
2017 2016 2017
R'000 R'000 R'000
Revenue
Radio broadcasting 104 865 100 102 198 802
Radio services 11 964 19 083 39 283
Corporate 219 236 508
Total 117 048 119 421 238 593
Profitability
Radio broadcasting 28 567 27 938 60 333
Radio services (3 149) (1 308) 2 184
Corporate (3 188) (2 752) 1 600
Total operating profit 22 230 23 878 64 117
Unallocated/eliminated corporate net expense and intercompany consolidation 98 148 631
Investment income 1 480 2 000 4 250
Interest received 3 816 3 848 7 856
Interest paid - - (6)
Taxation (7 385) (8 035) (20 791)
Total comprehensive income for the period 20 239 21 839 56 057
Assets
Radio broadcasting 66 301 66 020 64 714
Radio services 21 992 35 114 31 640
Corporate 118 974 85 320 90 757
Total 207 267 186 454 187 111
Liabilities
Radio broadcasting 46 167 53 727 49 863
Radio services 25 911 22 795 19 535
Corporate 8 750 8 857 6 015
Total 80 828 85 379 75 413
Capital expenditure
Radio broadcasting 1 495 2 620 4 632
Radio services 77 141 250
Corporate 137 769 1 546
Total 1 709 3 530 6 428
Depreciation
Radio broadcasting 2 832 2 784 5 510
Radio services 222 333 615
Corporate 156 158 313
Total 3 210 3 275 6 438
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 (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)
Kl Tlhabane (Independent non-executive)
MJ Prinsloo (Independent non-executive)
N Sooka (Independent non-executive)
M Mynhardt (Executive Financial)
AJ Isbister (Executive)
COMPANY SECRETARY
C Roberts
CHAIRMAN'S REVIEW
Trading conditions for the period under review remained tough. Revenue decreased by 2% to R117 million (2016: R119,4
million) and comprehensive income decreased by 7% to R20,2 million (2016: R21,8 million). Comprehensive income
attributable to shareholders amounted to R16,7 million (2016:R18,4 million), with earnings per share of 208,7 cents
(2016:229,8 cents). Headline earnings per share were 208,7 cents (2016: 226,7 cents).
After paying tax of R10,7 million (2016: R9,3 million), the group generated R19 million (2016: R27,6 million) in cash
from its operating activities during the period. The group spent R1,7 million (2016:R3,5 million) on capital expenditure
and paid R5,1 million (2016: R11 million) to repurchase 85 470 (2016: 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. During the year, the company paid
out dividends of R20,1 million (2016: 20,2 million) to shareholders and ended the year with cash resources of R110,8
million (2016: R108,3 million).
OPERATIONS
Low business confidence resulted in demanding trading conditions. Innovation and tight cost control remain imperatives.
Algoa FM delivered a solid performance with year-on-year revenue marginally up. Advertising revenue remains under
pressure due to the tough trading conditions. Profitability is slightly lower than the prior period and cost containment
remains a key focus area of the management team.
Central Media Group faced tough trading conditions and revenue is marginally down. Through tight cost control
profitability is only marginally lower than the corresponding period. OFM continues to experience pressure on its
ability to generate advertising revenue, especially from traditional radio advertisers as part of a general decline
across the radio industry. Local advertising sales revenue grew marginally. Digital Platforms has taken on significant
new business, and it's contribution to revenue and profitability -to the Group - has grown against the same period last
year. Central Media's broad range of products allows it to be well-positioned to take advantage of any improvement in
trading conditions.
Radioheads has advanced its position in the Industry, by becoming Content Marketing Agency of choice for several media
agencies. Revenue and profitability is up from last year,but several new campaigns are in the pipeline for the end of
the financial year.
While remaining focussed on its core radio platforms, the team at United Stations has made significant progress in
positioning the company to compete in a fast changing media environment. During the half year, United Stations concluded
new sales agreements with CliffCentral, Mail and Guardian and Jozi FM, while its technology platform Tysflo built
streaming TV channels on behalf of Kaya TV and Moneyweb. Revenues and profitability are however still under pressure.
BUSINESS COMBINATION
On 21 August 2017, AME acquired 100% of Moneyweb. The purchase price was settled by the issue of 277 210 new AME shares
and a cash consideration of R9,4 million.
The acquired business contributed incremental revenues of R1,6 million and a loss after tax of R718 000 to the group
for the period from date of acquisition to 30 September 2017. Had the acquisition occurred on 1 April 2017 group revenue
would have been R11,3 million higher and net profit after tax would have been R5,2 million lower. The assets and
liabilities acquired, for which final fair values have been determined, are as follows:
Business combination
Property, plant and equipment 485
Trademark 2 000
Other financial instruments 28
Deferred taxation 332
Other current assets including bank and cash resources 15 425
Current liabilities (4 458)
Net assets acquired 13 812
Goodwill 12 514
Purchase consideration shares and cash 26 326
Issue of shares 277
Share premium 16 619
Cash paid 9 430
26 326
Cash paid on business acquisition (9 430)
Cash purchased 13 186
Net cash inflow 3 756
DIVIDENDS
The final dividend (dividend number 11) of 250 cents per ordinary share (gross) was declared for the year ended 31 March
2017. (2016: 250 cents gross) and paid on 10 July 2017. The interim dividend (dividend number 12) for the period ended
30 September 2017 of 100 cents per ordinary share (gross) (2016: 100 cents per share gross) is proposed.
DECLARATION OF INTERIM DIVIDEND NUMBER 12
The board declared an interim dividend (dividend number 12) of 100.00 cents per ordinary share (gross) for the period
ended 30 September 2017. 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 20%
- The gross dividend amount is 100,00 cents per ordinary share for shareholders exempt from DWT
- The net dividend amount is 80.00 cents per ordinary share for shareholders liable for DWT
- The company has 8 246 164 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, 23 January 2018
Shares will trade ex-dividend from Wednesday, 24 January 2018
The record date will be Friday, 26 January 2018 and payment will be made on Monday, 29 January 2018
Share certificates may not be dematerialised/rematerialised between Wednesday, 24 January 2018 and Friday, 26 January
2018, 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
27 November 2017
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 2017.
These results are unaudited.
Michelle Mynhardt CA(SA)
Financial director
Date: 27/11/2017 02:43:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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