/ 23 February 2009

Kagiso media shows ‘resilience’ in tough times

Kagiso Media’s headline earnings increased by 20% to R106,3-million, the black-owned and managed media company said on Monday.

Headline earnings per share rose by 20% to 79,5 cents while revenue rose by 26% to R512,8-million.

Operating profit moved up by 12% to R168,9-million.

Kagiso Media said that net cash generated from operating activities reflected an increase of 68,8% to R50,1-million ”supported by the performance of the group’s strong suite of broadcasting and information services and solution assets”.

”Our broadcasting and information services and solution divisions have shown good resilience despite the increasingly adverse economic environment, delivering revenue growth of 6,9% and 11,9% respectively,” CEO Murphy Morobe said.

”We are pleased with the performance of these divisions under such tough trading conditions.”

Broadcast revenue increased by 6,9% to R260,1-million with a 2% decline in operating profit to R130-million.

”Once again, East Coast Radio and Jacaranda 94.2 performed well as national advertising sales were less impacted by the state of the economy than local sales,” the company said.

”The appeal of our newer radio stations continues to grow,” Morobe said.

iGagasi 99.5 showed a 36% growth in total weekly listenership which supported a 41,2% increase in revenue. OFM also increased its share of market but was unable to translate these benefits on to its bottom line.

Heart 104.9 benefited from its direct sales force with revenue rising by 6,1%.

LexisNexis continued to grow ”from strength to strength”, the company said, with a 22,1% increase in operating profit to R43-million off a base of 11,9% revenue growth.

Demand for printed products remained strong, while business from the rest of the continent now represented 9,2% of revenue.

Kagiso Exhibitions and Events showed revenue growth of 76,3% to R66,2-million while its loss was limited to R920 000 from a loss-making position of R8,1-million in the comparable period.

Rigorous management action
According to Morobe, Kagiso Media continued to stage its flagship events during the period and made good progress in resuming profitability due to rigorous management action.

”However, the strategic review of the business informed our decision to wind down the operations of the division by disposing of assets, the first of which was the Rand Show brand.

”We expect the process to be completed by the end of the financial year,” he said.

The acquisition of a controlling interest in local broadcasting production house, Urban Brew Studios was completed in November 2008.

”This business continues to benefit from its strong franchise in the local market, producing a number of popular television shows including Three Talk With Noleen; YO TV and the Live Lotto Draw,” Morobe said.

It delivered revenue of R51,7-million, accounting for the period November 1, 2008 to December 31, 2008.

Although the outlook for the markets in general remains uncertain, Morobe said he remained confident that Kagiso Media’s strong portfolio of broadcasting assets was positioned for continued growth.

”However, like everyone out there, we too are not immune to the tougher market conditions, and while we will continue to focus our efforts on delivering double-digit growth, we expect this to be at lower levels than in the past.” — Sapa