| Thu 20 Sep 2007, 13:06 | | JCM - Johnnic Communications - Report Back On Annu |
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JCM
JCM
JCM - Johnnic Communications - Report Back On Annual General Meeting
Johnnic Communications Limited
(Incorporated in the Republic of South Africa)
(Registration number 1889/000352/06)
Share Code: JCM ISIN: ZAE000024584
("Johncom" or "the company")
REPORT BACK ON ANNUAL GENERAL MEETING
Chairperson Mashudu Ramano delivered the following statement at the 116th annual
general meeting of Johncom shareholders this morning:
The year to March 2007 was indeed a sterling year for Johncom. Revenue increased
by 17% to R5.4 billion and headline earnings increased by a pleasing 35% to R684
million strongly underpinned by an attractive EBIT margin of 12% ahead of our
10% target.
The operational heart of the business, OpCo delivered annual compound growth in
operating profit of 59% over the last five years with the Johncom share price
responding with 48% annual compound growth over that period.
This steady and dramatic growth reflects a restructuring and rationalisation
plan whose foundation was laid in 2002. Johncom has added value to our
shareholders but also to our other stakeholders - our employees, the state and
the communities in which we do business.
Over the past five years, the company has contributed R4,6 billion to the
livelihood of all our employees in compensation and other benefits and our
contribution to state coffers has amounted to about R1,4 billion.
Since 2001 the Remuneration Committee has regarded share incentives in various
forms as a valuable instrument to align the interests of employer to those of
shareholder over the longer term. Over the years since share options were
introduced both shareholders and employees have been well rewarded.
In terms of IFRS accounting statements a total of R157 million worth of share-
based payments was expensed during the year in respect of share incentives
largely as a consequence of the 47% increase in the Johncom share price in the
year to March 2007.
In addition to our economic role, we recognise the importance of media systems
in society and the positive impact they have in governance, in promoting healthy
debates about issues of public interest and in the dissemination of information
to grassroots communities.
We are conscious of our responsibility to ensure that freedom of speech and a
free and independent media remain a significant pillar in the development and
transformation of our country and continent. We therefore continue to work with
other media companies and the state in the Media Development and Diversity
Agency to give a voice to the voiceless.
The fact that we now have strong, leading brands in every facet of the media and
entertainment industry illustrates that we are delivering value to our
customers. Our brands continue to set new standards in the marketplace.
In East and West Africa, where we have been operationally active for the last
five years, we are helping to change the media-buying experience. The one-stop
media entertainment concept we launched in cities such as Abuja, Lagos and
Nairobi are good examples.
Our 12-month operational strategy in Africa, introduced earlier in the year, is
delivering positively.
On the media front we are positioning Johncom to benefit from both the coming
digital age and the traditional media space, recognising we operate in South
Africa and Africa where penetration of broadband and access to the internet is
currently low.
The Times was launched in June 2007 to improve our 24 hours / 7 day media
strategy and address growth segments in the broader media market. We are excited
about the prospects for The Times both in terms of the budget presented by
management and the delivery to date. We continue to monitor its performance
carefully against our agreed objectives.
During the year, Johncom made far-reaching decisions about its relationships
with Naspers in M-Net/SuperSport and Caxton and CTP Publishers and Printers with
overwhelming shareholder support. In fact, 80% of shareholders attended a
special general meeting in January and approved the disposal of Johncom`s
interest in M-Net and SuperSport to Naspers with a 99.9% vote in favour. Naspers
is currently seeking Competition Authority approval for the acquisition.
We now look forward to charting our future with our directly-held operating
media and entertainment assets and will continue to build on the strong
relationships we enjoy with our international partners - Pearson, Random House,
Warner Music International, 20th Century Fox, Disney, Warner, the BBC, Universal
and various independent studios.
We are currently evaluating long-term printing contracts that will optimise
value for Johncom.
Since March 2007 consumer spend continued to be impacted by the tightening
interest rate cycle and the introduction of the National Credit Act. This had an
impact on advertising spend in recent months which may slow our advertising
revenue growth in the year to March 2008 to single digits compared to the
previous year.
Johncom has previously announced the timeline for its black economic empowerment
process and the variables that could affect exact dates. In line with the
finalised empowerment codes of good practice, the board approved the creation of
a human resources and transformation committee which will champion empowerment
issues at board level and ensure that the company`s transformation and
empowerment plans are implemented.
Johncom remains committed to the transformation objectives of our country and
the commitment to build a non-racial, non-sexist and prosperous democratic
country.
I pay tribute to all our people for their dedication and contribution to the
success of the company, and to our executives, management and my colleagues on
the board for their support during a challenging period. As a group, we deeply
appreciate the continued support of our customers and clients without whom we
could not have achieved these results.
Finally I thank our shareholders who have continued to show their confidence in
this board.
We look forward to building on our strong media and entertainment platform in
the months and years ahead for the benefit of all our stakeholders.
Enquiries
College Hill 011 447 3030
Johannes van Niekerk 082 921 9110
Johannesburg
20 September 2007
Sponsor
Nedbank Capital
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