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AME
AME
AME - African Media Entertainment Limited - Interim Reports for the six months
ended 30 April 2007
African Media Entertainment Limited
(Incorporated in the Republic of South Africa)
(Registration number 1926/008797/06)
Share code: AME ISIN: ZAE000055802
("AME" or "the group")
INTERIM REPORTS
for the six months ended 30 April 2007
ABRIDGED GROUP INCOME STATEMENT
for the period ended 30 April 2007
Six months ended Audited
Unaudited Restated Year ended
April April October
% 2007 2006 2006
change R`000 R`000 R`000
Revenue 25 61 804 49 470 115 019
Cost of sales (14 181) (12 270) (21 594)
Gross profit 47 623 37 200 93 425
Operating expenses (29 433) (25 128) (64 935)
Operating profit 51 18 190 12 072 28 490
Finance income 1 802 1 053 2 598
Finance cost (100) (50) (402)
Net profit before 52 19 892 13 075 30 686
taxation
Taxation (7 427) (3 755) (9 461)
SA normal taxation (6 057) (3 755) (9 010)
Secondary tax on (1 370) - (451)
companies
Profit for the period 34 12 465 9 320 21 225
Attributable to:
Minority interest 2 070 1 597 3 381
Equity holders of the 35 10 395 7 723 17 844
company
Earnings per share 35 121,7 90,4 209,0
(cents)
Headline earnings per 35 121,7 90,4 208,2
share (cents)
Weighted average 8 539 8 539 8 539
number of shares in
issue (000`s)
STATEMENT OF CHANGES IN EQUITY
for the period ended 30 April 2007
Audited
Unaudited Restated Year ended
April April October
2007 2006 2006
R`000 R`000 R`000
Issued capital
Balance at beginning of 8 628 8 628 8 628
period
Consolidation of share trust (89) (89) (89)
Balance at end of period 8 539 8 539 8 539
Share premium
Balance at beginning of 32 356 32 356 32 356
period
Consolidation of share trust (447) (447) (447)
Balance at end of period 31 909 31 909 31 909
Retained profit/(loss)
Balance at beginning of 16 060 (1 784) (1 784)
period
Profit for the year 10 395 7 723 17 844
Balance at end of period 26 455 5 939 16 060
Non-distributable reserve
Balance at beginning of 172 - -
period
Share based payment reserve 344 - 172
Balance at end of period 516 - 172
Minorities
Balance at beginning of 4 207 4 679 4 679
period
Share of dividend (4 302) - (3 610)
Change in shareholding - - (243)
Share of profit 2 070 1 597 3 381
Balance at end of period 1 975 6 276 4 207
Total capital and reserves 69 394 52 663 60 887
ABRIDGED GROUP CASH FLOW STATEMENT
for the period ended 30 April 2007
Audited
Unaudited Restated Year ended
April April October
2007 2006 2006
R`000 R`000 R`000
Cash generated from 19 819 13 011 29 645
operations
Net interest received 1 703 1 003 2 196
Taxation paid (7 375) (3 269) (5 727)
Increase in working capital (8 020) (1 861) (694)
Cash available from 6 127 8 884 25 420
operations
Cash flows from investing (2 804) (1 846) (275)
activities
Cash flows from financing (4 303) 37 (3 969)
activities
Net (decrease)/increase in (980) 7 075 21 176
cash and cash equivalents
Cash and cash equivalents at 23 849 2 673 2 673
beginning of period
Cash and cash equivalents at 22 869 9 748 23 849
end of period
ABRIDGED GROUP BALANCE SHEET
at 30 April 2007
Audited
Unaudited Restated Year ended
April April October
2007 2006 2006
R`000 R`000 R`000
Assets
Non-current assets 39 734 39 044 39 221
Property, plant and 6 129 4 287 4 645
equipment
Goodwill 30 428 30 428 30 428
Deferred taxation 3 177 4 329 4 148
Current assets 57 552 30 881 48 434
Trade and other receivables 33 055 18 203 24 167
Other receivables 1 628 2 500 418
Taxation paid in advance - 430 -
Cash and cash equivalents 22 869 9 748 23 849
Total assets 97 286 69 925 87 655
Equity and liabilities
Total equity 69 394 52 663 60 887
Non-current liabilities 1 102 2 121 1 278
Operating lease accrual 748 1 806 888
Interest-bearing borrowings 354 315 390
Current liabilities 26 790 15 141 25 490
Trade payables 19 655 11 977 18 239
Other payables 4 606 2 354 3 803
Taxation 2 529 810 3 448
Total equity and liabilities 97 286 69 925 87 655
COMMENTS
Accounting policies
These reports have been prepared in accordance with the group`s accounting
policies, which comply with International Financial Reporting Standards
("IFRS"). The interim report has been prepared in accordance with IAS34, Interim
Financial Reporting. The same accounting policies and methods of computation as
those used in the Annual Financial Statements for the year ended 31 October 2006
have been applied.
Prior period adjustment
In the past a common interpretation applied by South African companies was to
assume that the fair value of revenue and purchases approximated the nominal
values. In aligning with IFRS, the South African Institute of Chartered
Accountants issued Circular 9/2006: Transactions giving rise to Adjustments to
Revenue/Purchases. This circular prescribes that where extended payment terms
are granted, whether explicitly or implicitly, the effect of the time value of
money should be taken into account wherever this is material. This has resulted
in a reclassification of R701 000 from revenue to interest for the six months
ended April 2006.
In the previous period, certain revenues were stated on a net basis. These have
now been grossed up, resulting in the Revenue, Cost of Sales, Operating
Expenses, Finance income and Finance cost amounts being restated. There was no
change in earnings per share, as a result of these changes.
Financial results
The buoyant market conditions experienced in the last financial year continued
into the current year with adspend reaching record levels. Sales revenue for the
first six months of the year increased over the previous year by 25% from R49,5
million to R61,8 million with both Algoa FM and OFM exceeding their previous
period`s revenue. Growth in listenership also reached record levels with Algoa
FM and OFM reaching 700 000 and 585 000 listeners respectively, with significant
growth in the upper LSM range.
United Stations, the group`s advertising selling agency, also produced excellent
results when compared to last year, with new business being the driver of their
performance.
Radio Heads, which offers branded content and Direct Response Radio to
advertisers, has also improved its business significantly.
Margins continue to improve whilst operating expenses increased by 17% due
mainly to additional staff and increased marketing spend by the radio stations
to increase brand awareness.
The profit attributable to shareholders amounted to R10,4 million (2006: R7,7
million) with earnings per share of 121,7 cents (2006: 90,4 cents) increasing by
35% over the previous period.
The group generated R6,1 million cash from its operations during the period
under review of which R2,8 million has been invested in computer equipment and
land. The group ended the six months in a cash positive position of R22,9
million and interest income of R1,7 million.
The continued improvement in the balance sheet, efficiencies, control of costs
and the group`s ability to generate cash in a competitive business environment,
positions AME well for the rest of the year. AME is part of a consortium that
successfully applied for a secondary licence in Mpumalanga. The acquisition of
24,9% of Kaya FM from NAIL is at an impasse as the matter is now on appeal at
the Competition Appeal Court. The cash resources of the company are being
retained in anticipation of the acquisition of 24,9% of Kaya FM from NAIL and
the investment in the Mpumalanga radio licence. Should this opportunity not
materialise, the surplus cash resources of the company will be distributed as a
dividend.
Prospects
As sales revenue traditionally increases during the second half of the year, the
results for the second six months are expected to exceed those of the first six
months.
By order of the Board
ACG Molusi
Chairman
8 June 2007
Johannesburg
Registered office
5th floor, Park Terras
33 Princess of Wales Terrace
Parktown
Johannesburg
PO Box 3014
Houghton, 2041
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street Marshalltown
PO Box 61051
Marshalltown, 2107
Directors
ACG Molusi (Chairman)*, Z Lacob*, MJ Prinsloo*, W Tshuma* L Thango* *Non-
executive
WWW.AME.CO.ZA
Date: 08/06/2007 15:53:06 Produced by the JSE SENS Department.
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