Kagiso Media continues driving convergence and revenue diversification strategy23 September 2011
Results for the twelve months ended 30 June 2011
Kagiso Media's performance for the year shows that it is moving towards its objective of becoming a converging organisation and that it is delivering on the revenue diversification strategy.
|•||While Broadcasting’s revenue of R486,1 million was higher than the previous year, the growth rate was impacted by slow demand after the 2010 FIFA World Cup. A fourth quarter recovery was however instrumental in delivering marginal growth for the year.|
|•||The revenue of Information and Other was disappointing, largely as a result of tough market conditions, particularly in the Risk segment. Operating profit increased 5,2%. |
|•||The New Media segment delivered outstanding results for the year under review with a 123% increase in revenue to R84,1 million. |
|•||The Content segment resumed its strong growth with revenue increasing 23,5% despite a tough operating environment. |
|•||Total revenue (excluding LexisNexis’ revenue of R212,2 million) grew 12% to R789,2 million.|
|•||The group reported an increase of 2,4% in operating profit to R252,0 million.|
|•||Cash generated from operations improved by 10,9% to R377,6 million.|
|•||Headline earnings per share was up 12% to 153.1 cents|
|•||Final dividend of 38,0 cents per share was declared.|
|•||Kagiso Media has adopted a more proactive approach of managing its assets to enhance long term value creation. The executive team is pursuing a greater increased influence over its media assets, with a new prerequisite of acquiring majority interests.|
|•||The group has made progress with repositioning its investment portfolio in support of the strategy: |
Commenting on the performance and strategy, Kagiso Media CEO Murphy Morobe, said:
"Kagiso Media has once again made progress with the strategy which was adopted five years ago to reduce its dependence on advertising revenues. Through selective acquisitions, we have built an impressive suite of assets which extend beyond our traditional broadcasting assets into the online and content segments. The revenue profile in 2011 is a clear demonstration of success as non broadcasting assets contributed 51,5% of total revenue."
"It is equally pleasing that Kagiso Media has successfully extended its business from a commissioned provider of content to a content owner. We remain committed to our four key segments, namely Broadcasting, Content, New Media, and Information and Other and are confident that these will deliver long term value for our shareholders and other stakeholders."
"Although domestic economic growth prospects are uncertain, we believe that the South African economy holds attractive opportunities for media companies. In addition, we continually evaluate emerging business opportunities in sub-Saharan Africa. The fundamentals are in place for our business-to-consumer related revenue streams and at the same time we are seeing strong signals of increased competitor activity in both the retail and telecommunications sectors which bodes well for our business-to-business activities. The ongoing reduction in bandwidth costs benefits all dimensions of Kagiso Media's business."