eMEDIA HOLDINGS LIMITED - Unaudited Consolidated Condensed Interim Results for the six months ended 30 September 2018

Release Date: 21/11/2018 14:00
Code(s): EMN EMH
 
Wrap Text
Unaudited Consolidated Condensed Interim Results
for the six months ended 30 September 2018

eMedia Holdings Limited

The company's shares are listed under the Media sector of the JSE Limited.

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 2018





COMMENTARY

The period under review resulted in the Group ending the period showing a profit from

continuing operations of R48.4 million compared to a profit of R18.8 million in the

prior period, an increase of 158,3%. The loss from discontinued operations amounted

to R29.5 million resulting in the profit for the period ending on R18.9 million

compared to a loss of R0.7 million in the prior period. Revenue reflected an increase

of 5.3% ending the period on R1.2 billion despite the tough economic conditions.

Included in the profit are the losses attributable to the continued investment into

the multi-channel business (OpenView and e.tv multichannel) of R84.3 million compared

to R117.3 million in the prior year. Box activations have continued steady growth and

at 30 September 2018, 1 432 521 boxes were activated, compared to 1 008 114 boxes for

the prior period. EBITDA for the Group ended the period on R164.2 million compared

to R128.6 million for the prior period, an increase of 27.7% year-on-year. Included

in the profit from continuing operations is the profit on the sale of Da Vinci Media

of R11.4 million. 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 2018 has seen the market share of e.tv

remain fairly constant but has seen an increase in a key revenue driver, LSM 8 to

9, from 11.80% market share to 13.90% market share. e.tv's advertising revenue has

seen a slight decrease year on year in a very challenging economic environment.

Programming and other cost of sales decreased by 12% from R326 million to R285.6

million. Management is re-looking at the schedule in order to maximize slots that

are currently unprofitable. A new local drama, 'Imbewu: The Seed', was introduced in

April 2018 and is performing well. This should help improve the revenue in e.tv, as

well-performing local dramas are the biggest revenue drivers. Costs are being well

maintained in the business with operating expenses increasing from R250.9 million to 

R269.9 million, a movement of 8% year-on-year and e.tv is showing signs of improved

performance and recovery.



e.tv Multichannel and Platco

As mentioned, included in the results are losses of R84.3 million from the continued

investment into the multi-channel businesses from which significant revenue is not

yet being derived. Advertising revenue has however shown significant improvement,

increasing by 161% from R22.2 million in the previous year to R57.9 million. The

OpenView platform has increased its viewership capacity to 1 432 521 boxes activated

at the end of the period. With this ever-improving rollout, and when digital

terrestrial television starts, the Group will be in a good position to increase its

revenue base.



eSat.tv (eNCA)

eNCA continues to perform well and continues to be the most watched 24-hour news

station on DStv with over 50% market share. Advertising revenue in eNCA still shows

good growth ending the period on R57.0 million, up 10% from R52.0 million in the

previous year. Costs continue to be well maintained with cost of sales showing no

increase and amounting to R133.6 million compared to R133.5 million in the prior

period. eNCA had a relaunch and rebranding in July 2018, and initial feedback is

generally positive.



Certain of the Group's other subsidiaries have performed satisfactorily for the six

month period. These include Sasani Africa and Strika Entertainment. YFM has also

shown a turnaround from the previous period.



Management continues to review the non-core and peripheral businesses and will exit

these businesses when opportunities arise. During the current period, the sale of

Da Vinci Media was concluded, as well as the beginning of the process to close

certain of the Silverline 360 operations. The operations of Refinery JHB, Moviemart

and the Head Office functions will cease on 31 October 2018 and have been reflected as 

discontinued operations.





STATEMENT OF FINANCIAL POSITION

                                               Unaudited     Unaudited       Audited

                                            30 September  30 September      31 March

                                                    2018          2017          2018

                                                  R000's        R000's        R000's

ASSETS

Non-current assets                             5 870 422     7 589 977     5 726 730

Property, plant and equipment                    869 542       903 699       784 492

 Plant and equipment                             268 833       294 839       183 785

 Owner occupied property                         600 709       608 860       600 707

Intangible assets                              2 524 114     2 590 434     2 537 697

Goodwill                                       2 228 978     3 778 264     2 153 800

Equity-accounted investees                       147 642       209 498       143 495

Long-term receivables                             16 110        17 108        14 398

Deferred tax assets                               84 036        90 974        92 848

Current assets                                 1 428 354     1 605 602     1 368 035

Inventories                                       15 039        18 119         9 714

Programming rights                               809 605       929 956       870 674

Trade and other receivables                      422 842       462 421       384 408

Current tax assets                                49 926        15 154        16 950

Cash and cash equivalents                        130 942       179 952        86 289

Assets of disposal groups                         19 672        22 985       262 792

Total assets                                   7 318 448     9 218 564     7 357 557



EQUITY AND LIABILITIES

Total equity                                   5 583 597     7 186 738     5 558 961

Stated capital                                 6 762 797     6 762 797     6 762 797

Treasury shares                                  (10 870)       (7 913)      (10 870)

Reserves                                      (2 176 038)     (605 365)   (2 189 959)

Equity attributable to owners of the Company   4 575 889     6 149 519     4 561 968

Non-controlling interest                       1 007 708     1 037 219       996 993

Non-current liabilities                          665 059       782 917       684 252

Deferred tax liabilities                         526 502       537 075       533 342

Borrowings                                       135 390       241 338       150 910

Operating lease accruals                           3 167         4 504             -

Current liabilities                            1 064 810     1 248 909     1 009 169

Current tax liabilities                            5 646         7 752        11 512

Current portion of operating lease accruals          208             -             -

Current portion of borrowings                    397 556       434 533       409 452

Trade and other payables                         610 309       805 235       587 176

Bank overdraft                                    51 091         1 389         1 029

Liabilities of disposal groups                     4 982             -       105 175

Total liabilities                              1 734 851     2 031 826     1 798 596

Total equity and liabilities                   7 318 448     9 218 564     7 357 557

Net asset value                                4 575 889     6 149 518     4 561 968

Net asset value per share

after treasury shares (cents)                      1 030         1 383         1 027





STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME



                                            6 Months        6 Months*       Restated

                                        30 September    30 September        31 March

                                                2018            2017            2018

                                              R000's          R000's          R000's

Continuing operations

Revenue                                    1 247 598       1 184 936       2 401 858

Cost of sales                               (605 211)       (595 255)     (1 221 226)

Gross profit                                 642 387         589 681       1 180 632

Other income                                   4 665           4 416          16 409

Administrative and other expenses           (482 820)       (465 516)       (961 964)

Earnings before interest, taxation, 

depreciation and amortisation                164 232         128 581         235 077

Depreciation and amortisation                (78 857)        (76 520)       (153 576)

Impairments                                        -               -      (1 597 211)

Operating profit/(loss)                       85 375          52 061      (1 515 710)

Finance income                                 3 217           4 454           8 547

Finance expenses                             (18 390)        (21 288)        (43 046)

Share of (loss)/profit of 

equity-accounted investees,

net of taxation                                 (375)           (279)          1 289

Investment surplus on disposal

of associate                                  11 232               -               -

Profit/(loss) before taxation                 81 059          34 948      (1 548 920)

Taxation                                     (32 623)        (16 193)        (32 155)

Profit/(loss) for the year 

from continuing operations                    48 436          18 755      (1 581 075)

Discontinued operations

Loss for the period from 

discontinued operations, net of taxation     (29 456)        (19 485)        (31 845)

Profit/(loss) for the period                  18 980            (730)     (1 612 920)

Other comprehensive profit/(loss),

net of related taxation

Items that are or may be reclassified

to profit or loss   

Foreign operations - foreign 

currency translation differences               9 907           4 103          (6 735)

Reclassification of foreign 

currency differences on disposal                   -             722            (723)

Other comprehensive profit/(loss), 

net of taxation                                9 907           4 825          (7 458)

Total comprehensive profit/(loss) 

/income for the period                        28 887           4 095      (1 620 378)



Profit/(loss) attributable to:

 Owners of the Company                        11 317          (2 494)     (1 579 005)

 Non-controlling interest                      7 663           1 764         (33 916)

                                              18 980            (730)     (1 612 920)



Total comprehensive income/(loss)

attributable to:   

 Owners of the Company                        18 023             772      (1 584 053)

 Non-controlling interest                     10 864           3 323         (36 325)

                                              28 887           4 095      (1 620 378)



*6 Months ended 30 September 2017 restated for discontinued operations





STATEMENT OF CHANGES IN EQUITY



                                     Stated      Treasury        Other      Retained

                                    Capital        Shares     Reserves        Income

                                     R000's        R000's       R000's        R000's

Balance 31 March 2017            6  762 797        (7 221)      (7 488)     (592 944)

Loss                                      -             -            -    (1 578 773)

Foreign currency 

translation reserve                       -             -       (5 049)            -

Share buy-back                            -        (3 649)           -             -

Change in ownership                       -             -            -        (5 705)

Disposal of share interest                -             -            -             -

Dividends paid                            -             -            -             -



Balance 31 March 2018             6 762 797       (10 870)     (12 537)   (2 177 422)

Profit                                    -             -            -        11 317

Foreign currency translation reserve      -             -        6 706             -

Common control reserve arising 

on the acquisition of Niveus 13           -             -       (4 102)            -

Dividends paid                            -             -            -             -

Balance 30 September 2018         6 762 797       (10 870)      (9 933)   (2 166 105)



                                              Equity   Non-controlling         Total

                                              Owners          Interest      Reserves

                                              R000's            R000's        R000's

Balance 31 March 2017                      6 155 144         1 026 541     7 181 685

Loss                                      (1 578 773)          (34 147)   (1 612 920)

Foreign currency translation reserve          (5 049)           (2 409)       (7 458)

Share buy-back                                (3 649)                -        (3 649)

Change in ownership                           (5 705)            5 705             -

Disposal of share interest                         -             1 648         1 648

Dividends paid                                     -              (345)         (345)



Balance 31 March 2018                      4 561 968           996 993     5 558 961

Profit                                        11 317             7 663        18 980

Foreign currency translation reserve           6 706             3 201         9 907

Common control reserve arising on

the acquisition of Niveus 13                  (4 102)                -        (4 102)

Dividends paid                                     -              (149)         (149)



Balance 30 September 2018                  4 575 889         1 007 708     5 583 597





STATEMENT OF CASH FLOWS

                                           Unaudited         Unaudited*     Restated

                                        30 September      30 September      31 March

                                                2018              2017          2018

                                              R000's            R000's        R000's

Cash from operating activities

Cash flows from operating activities         173 618            56 393       109 286

Net finance costs                            (16 068)          (18 815)      (38 777)

Taxes paid                                   (32 125)          (27 344)      (49 543)

Net cash inflow from operating activities    125 425            10 234        20 966



Cash used in investing activities

Acquisition of property, 

plant and equipment                          (66 713)          (26 650)      (56 962)

 Acquisition of plant and equipment          (62 168)          (26 650)      (54 449)

 Acquisition of owner-occupied properties     (4 545)                -        (2 513)

Proceeds from sale of 

property, plant and equipment                    637             3 323        27 670

 Book value of assets disposed                   172             1 864         2 298

 Surplus on disposal                             465             1 459        25 372

(Repayment)/advances of financial assets        (426)            2 584         2 153

Acquisition of subsidiary,

net of cash acquired                          (4 996)                -             -

Net cash flows of discontinued operations          -            13 900        16 928

Additions to intangible assets                (6 587)          (18 503)      (22 376)

Loans advanced to equity accounting investees (4 943)           (5 055)       (9 964)

Net proceeds from disposal of associates       8 223                 -             -

Net cash used in investing activities        (74 805)          (30 401)      (42 551)



Cash (used in) from financing activities

Repayment of borrowings                      (87 138)          (82 264)     (188 424)

Settlement of forward exchange contracts           -                 -       (11 743)

Borrowings raised                              1 419            85 726       150 188

Share buy back                                     -              (692)       (3 649)

Proceeds from disposal of shares

to non-controlling interest                        -             2 570         2 570

Dividends paid to non controlling interest      (149)                -          (345)

Net cash (used in) from financing activities (85 868)            5 340       (51 403)



Net change in cash and cash equivalents      (35 248)          (14 827)      (72 988)

Cash and cash equivalents at beginning 

of the year                                  116 656           192 510       192 510

Effect of movements in exchange rates

on cash held                                   3 490               880        (2 866)

Cash and cash equivalents at end

of the year                                   84 898           178 563       116 656



Cash and cash equivalents comprise the

following 

Cash and cash equivalents                    135 989           179 952       117 685

 Bank balances                               130 942           179 952        86 289

 Cash in disposal group assets held for sale   5 047                 -        31 396

Bank overdrafts                              (51 091)           (1 389)       (1 029)

                                              84 898           178 563       116 656



*6 Months ended 30 September 2017 restated for discontinued operations





EARNINGS, DILUTED AND HEADLINE EARNINGS PER SHARE

                                                             Unaudited     Unaudited

                                                                 Gross           Net

                                                                R000's        R000's

For the year ended 30 September 2018  

Profit attributable to equity owners of the parent                            11 317

IAS 16 gains on disposal of plant and equipment                   (105)          (76)

Profit from of disposal of associate                            (7 603)       (7 603)

IFRS 3 impairment of goodwill                                   11 239        11 239

Headline earnings                                                             14 877



For the year ended 30 September 2017*  

Loss attributable to equity owners of the parent                              (2 494)

IAS 16 gains on disposal of plant and equipment                   (988)         (711)

IAS 16 impairment of plant and equipment                             7             5

IAS 21 foreign currency translation reserve 

reclassified to profit or loss                                     489           489

IFRS 10 loss on the loss of control of a subsidiary               (634)          271

Headline earnings                                                             (2 440)



*6 Months ended 30 September 2017 restated for discontinued operations



                                                             Unaudited     Unaudited*

                                                          30 September  30 September

                                                                  2018          2017

                                                                 R'000         R'000

Basic earnings (R'000)

Earnings/(loss)                                                 11 317        (2 494)

Continuing operations                                           31 254        10 697

Discontinued operations                                        (19 937)      (13 191)

Headline earnings/(loss)                                        14 877        (2 440)

Continuing operations                                           23 576        10 457

Discontinued operations                                         (8 699)      (12 897)

Basic earnings per share (cents)

Earnings/(loss)                                                   2,55         (0,56)

Continuing operations                                             7,03          2,41

Discontinued operations                                          (4,48)        (2,97)

Headline earnings/(loss)                                          3,34         (0,55)

Continuing operations                                             5,30          2,35

Discontinued operations                                          (1,96)        (2,90)



Weighted average number of 

shares in issue - 30 September ('000)                          444 481       444 597

Issued shares as at 1 April ('000)                             444 597       445 737

Effect of own shares held ('000)                                  (116)       (1 140)



Net number of shares in issue - 30 September ('000)            444 152       444 489

Number of shares in issue - 30 September ('000)                445 737       445 737

Number of treasury shares in issue - 30 September ('000)        (1 585)       (1 248)



*6 Months ended 30 September 2017 restated for discontinued operations





BASIS OF PREPERATION



The unaudited consolidated condensed results for the six months to September 2018

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 2018.



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



Except as described below, the accounting policies applied in these interim financial 

statements are the same as those applied in the Group's consolidated financial

statements as at and for the year ended 31 March 2018.



The changes in accounting policies are also expected to be reflected in the Group's

consolidated financial statements as at and for the year ending 31 March 2019.



The Group has adopted IFRS 15 Revenue from Contracts with Customers and IFRS 9

Financial Instruments from 1 January 2018 but they do not have a material effect on

the Group's financial statements therefore no restatement of prior year numbers are

required.



STATED CAPITAL



As at 30 September 2018, no changes to Stated Capital occurred.



DISPOSAL GROUP ASSETS/LIABILITIES HELD FOR SALE



Operations reported as disposal group assets/liabilities held for sale at 

30 September 2018 relate to the operations of Refinery Johannesburg Proprietary

Limited, Moviemart Proprietary Limited and the head office operations of Silverline

Three Sixty Proprietary Limited. These entities will cease operations from 

31 October 2018.



Discontinued operations as disclosed in the statement of comprehensive income

consist of the following:



                                                             Unaudited     Unaudited*

                                                          30 September  30 September

                                                                  2018          2017

                                                                R000's        R000's

Revenue

Longkloof Limited Group                                              -             -

e.Botswana Proprietary Limited 

and e.tv Botswana Proprietary Limited                                -         1 537

Lalela Music Proprietary Limited and Lalela Music LLC Z              -             -

Silverline Three Sixty Proprietary Limited                      20 818        16 123

Total revenue                                                   20 818        17 660



Loss from discontinued operations

Longkloof Limited Group                                             52         2 160

e.Botswana Proprietary Limited and

e.tv Botswana Proprietary Limited                                    -        (8 061)

Lalela Music Proprietary Limited and Lalela Music LLC                -         3 186

Silverline Three Sixty Proprietary Limited                     (29 508)      (16 770)

Total loss                                                     (29 456)      (19 485)



*6 Months ended 30 September 2017 restated for discontinued operations



Disposal groups held for sale as disclosed in the statement of financial position

comprise the following:



                 Property,

                     plant                  Trade and other   Cash and cash    Total

                 equipment    Inventories       receivables     equivalents   assets

                     R'000          R'000             R'000           R'000    R'000

Assets     

30 September 2018     

Longkloof

Limited Group          283             -                  -           4 082    4 365

Silverline Three

Sixty Proprietary

Limited              2 034          3 918             8 390             965   15 307 

Total assets         2 317          3 918             8 390           5 047   19 672 



30 September 2017     

Sabido Properties

Proprietary Limited 22 985              -                 -               -   22 985



                                                             Unaudited     Unaudited

                                                          30 September  30 September

                                                                  2018          2017

                                                                R000's        R000's

Liabilities

Silverline Three Sixty Proprietary Limited                       4 982             -

Total liabilities                                                4 982             -



RELATED PARTIES



Group entities entered into various transactions with related parties, in the

ordinary course of business, on an arm's length basis. The nature of related party

transactions is consistent with those reported previously, as at 31 March 2018.



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, resigned from the board effective 

30 November 2018.



K Sherrif has been appointed as an executive director of eMedia Holdings as of 

13 November 2018.



DIVIDEND TO SHAREHOLDERS



The directors have resolved not to declare an interim dividend for the period ended

30 September 2018.



On behalf of the board



JA Copelyn             A S Lee

Chairperson            Financial Director



Cape Town

21 November 2018





CORPORATE INFORMATION

eMedia Holdings Limited



The company's shares are listed under the Media sector of the JSE Limited



COMPANY 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 



REGISTERED OFFICE

5 Summit Road 

Dunkeld West 

Hyde Park

Johannesburg 

2196 



Private Bag X9944

Sandton 2146



DIRECTORS

JA Copelyn* (Chairman)

A van der Veen (Chief executive officer)

K Sherrif 

AS Lee (Financial director) 

TG Govender*

Y Shaik*

VE Mphande*^ 

L Govender*^ 

RD Watson*^ 

(*Non-executive ^Independent) 



COMPANY SECRETARY

HCI Managerial Services Proprietary Limited



TRANSFER SECRETARIES

Computershare Investor Services Proprietary Limited 

Rosebank Towers, 15 Biermann Avenue, 

Rosebank, 2196



PO Box 61051 Marshalltown, 2107



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

Sandton, Sandown, 2196



WEBSITE:

http://www.emediaholdings.co.za


Date: 21/11/2018 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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