| Fri 25 Jan 2008, 17:27 | | AME - AME - Provisional reports for the year ended 31 October 2007 |
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AME
AME
AME - AME - Provisional reports for the year ended 31 October 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")
Provisional Reports For The Year Ended 31 October 2007
ABRIDGED GROUP INCOME STATEMENT
for the year ended 31 October 2007
% Reviewed Audited
change 2007 2006
R`000 R`000
Revenue 18 136 056 115 019
Cost of sales (25 630) (21 594)
Gross profit 110 426 93 425
Operating expenses (70 814) (64 935)
Operating profit 39 39 612 28 490
Finance income 3 719 2 598
Finance cost (455) (402)
Loss from associate company (325) -
Net profit before taxation 39 42 551 30 686
Taxation (13 664) (9 461)
SA normal taxation (11 634) (9 021)
Deferred tax (620) 11
Secondary tax on companies (1 410) (451)
Profit for the year 36 28 887 21 225
Attributable to:
Minority interest 5 028 3 381
Equity holders of the company 34 23 859 17 844
Earnings per share (cents) 34 279,4 209,0
Headline earnings per share (cents) 34 278,8 208,2
Diluted earnings per share (cents) 276,6 -
Weighted average number of shares in 8 539 8 539
issue (000`s)
Diluted average number of shares in 8 626 -
issue (000`s)
Headline earnings reconciliation
Profit attributable to equity 23 859 17 844
holders
Profit on sale of property, plant (51) (63)
and equipment
Profit on disposal of investments (2) -
Headline earnings 23 806 17 781
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 October 2007
Reviewed Audited
2007 2006
R`000 R`000
Issued capital
Balance at beginning of year 8 628 8 628
Consolidation of share trust (89) (89)
Balance at end of year 8 539 8 539
Share premium
Balance at beginning of year 32 356 32 356
Consolidation of share trust (447) (447)
Balance at end of year 31 909 31 909
Retained profit
Balance at beginning of year 16 060 (1 784)
Profit for the year 23 859 17 844
Dividend declared (17 257) -
Balance at end of year 22 662 16 060
Non-distributable reserve
Balance at beginning of year 172 -
Share based payment reserve 689 172
Balance at end of year 861 172
Minorities
Balance at beginning of year 4 207 4 679
Share of dividend (4 303) (3 610)
Change in shareholding (198) (243)
Share of profit 5 028 3 381
Balance at end of year 4 734 4 207
Total capital and reserves 68 705 60 887
ABRIDGED GROUP CASH FLOW STATEMENT
for the year ended 31 October 2007
Reviewed Audited
2007 2006
R`000 R`000
Cash generated by operations 41 819 29 645
Net interest received 3 264 2 196
Taxation paid (13 637) (5 727)
Increase in working capital (2 005) (694)
Cash available from operating activities 29 441 25 420
Cash flows from investing activities (4 821) (275)
Cash flows from financing activities (4 303) (3 969)
Net increase in cash and cash equivalents 20 317 21 176
Cash and cash equivalents at beginning of 23 849 2 673
year
Cash and cash equivalents at end of year 44 166 23 849
ABRIDGED GROUP BALANCE SHEET
at 31 October 2007
Reviewed Audited
2007 2006
R`000 R`000
Assets
Non-current assets 41 308 39 221
Property, plant and equipment 6 184 4 645
Investment in associate 1 172 -
Goodwill 30 426 30 428
Deferred taxation 3 526 4 148
Current assets 84 135 48 434
Trade receivables 38 721 24 167
Other receivables 1 248 418
Cash and cash equivalents 44 166 23 849
Total assets 125 443 87 655
Equity and liabilities
Total equity 68 705 60 887
Non-current liabilities 1 081 1 278
Operating lease accrual 675 888
Interest-bearing borrowings 406 390
Current liabilities 55 657 25 490
Trade payables 24 216 18 239
Other payables 10 927 3 526
Dividend payable 17 257 -
Operating lease accrual and interest- 404 277
bearing borrowings
Taxation 2 853 3 448
Total equity and liabilities 125 443 87 655
REVIEW FOR THE YEAR
Basis of preparation
This report has been prepared in accordance with the group`s accounting
policies, which comply with International Financial Reporting Standards and
IAS34, Interim Financial Reporting, and on a basis consistent with the policies
and methods of computation used in the annual report for the year ended 31
October 2006.
Financial results
The buoyant market conditions experienced in the last financial year continued
into the current year with the continued growth in retail spending benefiting
advertising spend across the group. Sales revenue for the year increased by 19%
over the previous year from R115,0 million to R136,3 million with both Algoa FM
and OFM exceeding their previous year`s revenue. 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. RadioHeads,
which offers branded content and Direct Response Radio to advertisers, has also
enjoyed a significant improvement over the previous year.
Algoa FM celebrated its 21st birthday in style in 2007. Turnover for the
financial year increased to R63,2 million, up by 15,1% from the previous
financial year. One of the biggest contributing factors for this growth was the
increase in the radio stations non-traditional revenue streams. Net profit grew
by 21,9% compared to last year. The station`s past seven day audience is up by
120 000 or 18% to 786 000 listeners. Algoa FM also launched its new studio and
offices at Hemmingway`s Casino in East London in December and lodged a licence
amendment application to ICASA to expand the station`s footprint into Knysna,
George, Mossel Bay and Oudtshoorn.
OFM continued to show positive growth in revenue, with its ground-breaking
Direct Sales Programme, Image Plus, contributing to more significant growth in
the direct market. OFM continues to entrench itself as an inspirational brand
with national and international television exposure through its sponsorship of
central South Africa`s rugby and cricket teams adding to the brand`s appeal. OFM
continues to involve itself actively in the community through its Social
Responsibility campaigns and the Let`s Play initiative. OFM`s winter campaign
collected 14 000 blankets which were distributed to the needy across central
South Africa. With the radio station investing in non-traditional revenue
streams, a similar growth rate can be expected.
Specialist media sales house United Stations also exceeded budget. As one of its
strategic priorities it increased its portfolio and inventory, with the addition
of Yarona FM, the Citizen Business Section, MineWeb.com, MPower FM, RNW Radio
North West, opportunities on MoneyWeb`s Power Lunch on CNBC Africa as well as
the newly launched Moneyweb web sites Tycoon, moneywebtax, realestateweb,
politicsweb and sportingweb. In line with the increased client base United
Stations has made significant investment in capacity and is well positioned to
take advantage of the opportunities presented by the growth in its client base.
RadioHeads is a small team of radio specialists which delivers consistently good
results for its clients. Well positioned in a media industry that often finds
radio planning too cumbersome and that lacks the skills and know how to most
effectively tap into the power of this medium, RadioHeads offers radio skills
and a passion for the medium to both advertisers and agencies alike. By honing
its product offerings that include Branded Content, Station Imaging, Creative,
Campaign management and Direct Response Radio Solutions, RadioHeads produced a
net profit, in only its second full year of operation.
During April 2007, ICASA awarded MPower FM the licence to broadcast into
Mpumalanga. AME, which has a 24,9% shareholding in MPower FM, also has a sales
contract with it and was responsible for setting up the radio station which went
on air successfully on 3 December 2007. AME also has a sales contract with RNW
which was recently granted a sound broadcasting licence for the North West
Province.
The Competition Appeal Court referred the acquisition by Primedia of NAIL`s
24,9% interest in Kaya FM, back to the Competition Tribunal. The Board still
remains confident that AME`s offer to purchase NAIL`s interest in Kaya FM will
succeed.
Margins were maintained, however operating expenses increased by 11% due mainly
to additional staff requirements and increased marketing spend by the radio
stations to increase brand awareness and also in celebration of their 21 years
of broadcasting.
Net finance income of R3,3 million increased by R1,1 million over the previous
year and was attributable to the constantly improving cash position.
The loss from the Associates is in respect of AME`s share of MPower FM`s results
for the same period. These results are in line with budget.
The profit attributable to ordinary shareholders amounted to R23,8 million
(2006: R17,8 million) with earnings per share of 279,4 cents (2006: 209,0 cents)
increasing by 34% over the previous year. Headline earnings per share were 278,8
cents (2006: 208,2 cents) increasing by 34% over the previous year.
Cash generated from operations amounted to R41,8 million, of which R3,5 million
has been invested in equipment and land and R13,6 million paid in tax. The group
ended the year with R44,2 million in cash compared with R23,8 million at the end
of the previous year.
The group continues to focus on new business opportunities, efficiencies,
control of costs and to enhance its earnings. The continued increase in interest
rates and the slow down in retail sales may have an adverse impact on adspend in
the forthcoming months which in turn may impact on the business.
Dividends
A special dividend of 200 cents per share was declared on 19 October 2007,
payable on 19 November 2007. Sufficient cash resources were retained to fund
organic growth opportunities and the possible acquisition of a 24,9% interest in
Kaya FM.
Prospects
Based on the performance of the group for the first few months of the new
financial year, AME`s results for the forthcoming 12 months should exceed those
of the past financial year.
Audit review
The financial results have been reviewed by Charles Orbach and Company and their
unqualified review opinion is available for inspection at the company`s
registered office.
By order of the Board
ACG Molusi
Chairman
25 January 2008
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,
Johannesburg. PO Box 61051, Marshalltown, 2107
Sponsor
Arcay Moela Sponsors (Pty) Limited, 3 Anerley Road, Parktown, Johannesburg. PO
Box 62397, Marshalltown 2107
Directors
ACG Molusi (Chairman)*, Z Lacob*, MJ Prinsloo*, W Tshuma* L Thango* *Non-
executive
WWW.AME.CO.ZA
Date: 25/01/2008 17:27:01 Produced by the JSE SENS Department.
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