JSE-listed African Media Entertainment (AME) achieved strong year-on-year earnings growth in the six months to end-September 2023, with operations throughout the various business units performing well despite demanding trading conditions and challenging economic circumstances.
AME chair Connie Molusi said the revenue initiatives implemented since the previous year, as well as increased market share, have resulted in an improved performance.
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The group, which owns radio assets and a portfolio of digital media services, publishing and business broadcasting assets, saw its share price increase almost 4% on Friday. Moneyweb is a subsidiary of AME.
AME share price
Molusi said innovation and tight cost control remain imperative focus points, with operating costs continuing to be well managed and cash flow remaining positive.
He added that both net national and net local sales closed above budget despite advertising revenue from government and municipal departments being severely constrained. He said Algoa FM’s interim results underscore a solid performance for the first six months of the financial year.
Molusi said that Eastern Cape-based Algoa FM will be launching a satellite studio in George, which is planned to be on air from the beginning of December.
AME’s revenue increased by 11% to R143.1 million, from R128.4 million in the comparative half-year. The double-digit revenue increase translated into improved profitability and a 33% improvement in operating profit, to R19.5 million from R14.6 million in the prior period.
Earnings before interest, tax, depreciation and amortisation (Ebitda) ended 4% above budget and 21% up year-on-year. Earnings per share grew by almost 38% to 207.5 cents from 149.7 cents.
Interim dividend
An unchanged interim dividend of 100 cents per share was declared. The repurchase of 120 000 shares during the six-month reporting period resulted in a cash outflow of R3.7 million. In the prior period, 199 621 shares were repurchased for R7.1 million.
AME previously stated that the share repurchase scheme is driven by the board’s belief that company’s share price is undervalued.
The share repurchases resulted in a cash balance of R57.1 million at end-September 2023, compared to R79.1 million at the end of the prior period.
Molusi said Central Media Group had a very encouraging half year, with the subsidiary’s earnings in a positive position.
He said revenues in radio have increased in both the local and national markets, with the OFM radio station being the outstanding performer within the group.
Molusi added that MediaHeads 360’s interim performance has exhibited continued resilience.
“The long-term sustainability and diversification strategy, which MediaHeads 360 has implemented to foster innovation and steer strategic development within the television content integration sector, is progressively gaining traction,” he said.
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Molusi said United Stations’ commitment to enhancing advertiser value has yielded positive results, igniting significant growth in both inventory value and revenue potential.
He noted that the specialised media sales house is confidently optimistic about reaching its ambitious revenue targets and is poised for even greater success as it further consolidates its significant market presence.
Molusi said while Moneyweb had experienced a challenging first half, its the digital and radio revenue is still higher than the previous year.
“The sales teams continue to focus on alternative business strategies to ensure revenue growth. In addition to this strategy, the development and marketing teams have focused on building the subscription base, both paid and free,” he said.
AME reported that Mokgosi Holdings in July this year entered into an agreement to purchase 100% of the shares in New Africa Investments (RF) Ltd, which in turn has a 24.9% shareholding in Kaya FM, from Thebe SPV 012 RF (Pty) Limited.
AME holds a non-controlling 100% economic interest in Mokgosi Holdings, which in turn has a 5% shareholding in Kaya FM (Pty), the Gauteng-based radio station.
The purchase consideration for New Africa Investments’ shares was R85.1 million, which Mokgosi funded with a loan from AME.
Mokgosi repaid AME R25 million of the purchase consideration during September 2023, with the balance being settled during November 2023.
Molusi said AME’s board expects the trading conditions for the 2024 financial year to remain “somewhat challenging”.
Listen to AME CEO Dave Tiltmann speaking about podcasting, the audio revolution – and the newly launched LiSTN app (or read the transcript):
You can also listen to this podcast on iono.fm here.
