Review of the six months ended 30 September 2016
Trading conditions for the period under review were tough. Our operations experienced a decrease in revenue of 3% to R119,4 million ( 2015 R123 million) Comprehensive income increased by 1% to R21,8 million ( 2015 R21,6 million).
The comprehensive income attributable to equity holders of the parent amounted to R18,4 million (2015: R19,5 million) with earnings per share of 229,8 cents (2015: 239,2 cents). Headline earnings per share was 226,7 cents (2015: 239,2 cents).
After paying tax of R9,3 million (2015: R12,7 million), the group generated R27,6 million (2015: R19,9 million) in cash from its operating activities during the period. The group invested an additional R758 000 (2015:R13,5 million) in the development of the new home of the Central Media Group in Bloemfontein and spent R2,8 million (2015: R2,7 million) on capital expenditure. The group paid R11 million (2015 R3,8) to repurchase 155 144 (2015:39 200) shares. During the period the group paid out dividends of R20,2 million (2015: R20,2 million) to the equity holders of the company. The group ended the period with cash resources of R108,3 million (2015: R86,5 million).
Low business confidence remains a key challenge across all sectors resulting in demanding trading conditions. Innovation and tight cost control remain imperative.
Agreement has been reached with SAMPRA in regard to Needletime.
Algoa FM’s profitability improved during the first half of the financial year on the back of increased national marketing spend around the local election and in the banking sector. Both national and direct advertising revenues delivered results above expectation. There has been significant growth in all revenue from Algoa FM’s digital platforms and non-traditional revenue due to local demand for the station’s outside broadcast unit and activation squad. The excellent performance of the radio station was underpinned by effective cost control. Algoa FM listenership, as released in the new BRC RAM Diary, has shown 17% growth from the SAARF RAMS diary.
Central Media Group felt the pinch of the drought. The figures at half-year reflect the very tough trading conditions. A modest growth in revenue and very tight cost controls meant that the group has delivered on profit expectation over this period. Redstar Agency secured significant new business, and the 2nd Miway National Sevens tournament attracted more than double the entries of last year, resulting in very good bottom line growth off a low base. Digital Platforms made significant inroads into the Agri sector in the provision of web services, and the addition of an App service resulted in new blue-chip clients such as SAB. Mahareng Publishing launched a new community freesheet (Courant Voice) aimed at readers in Thaba Nchu and Botshabelo, and this has added impetus to this business in otherwise competitive markets. OFm continues to experience volatility in advertising demand and trading conditions for all the business units remain difficult.
RadioHeads performed significantly better compared to the same period last year. Many campaigns previously postponed have materialised in the current financial year, giving renewed impetus to the business. Management is confident of a stronger performance fro the rest of teh year.
Sales revenue at United Stations was down on the previous year, due to a different mix of radio station clients. Three established radio stations in major markets were replaced with five newly launched stations in secondary markets, covering Northern Johannesburg, KZN, Mpumalanga, North West and the Western Cape. The team has expanded the range of services offered, to include a video streaming platform, an online solution for radio stations and an extensive menu of Rich Media Tools. Steady progress has been made in taking these to market.
The board expects the trading conditions for the remaining six months of the year to remain challenging.
Independent Non-executive Chairman
24 November 2016