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MNY
MNY
MNY - Moneyweb Holdings Limited - Reviewed Condensed Financial Results for the
year ended 31 March 2008
Moneyweb Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/025067/06)
(JSE code: MNY & ISIN: ZAE000025409)
("Moneyweb" or "the company" or "the group")
REVIEWED CONDENSED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2008
Highlights
Headline earnings per share up 29%; revenues up 25%; unchanged
dividend declared
Tangible net asset value almost doubled to 16,3
cents per share
BEE transaction concluded
Decision taken to enter financial services field
Offshore media operations re-assessed in light of
risks and local opportunities
Condensed Group Income Statement
Reviewed Audited
March March
2008 2007
R`000 R`000
Revenue 23 915 19 114
Earnings before interest, taxation, 2 267 1 957
depreciation and amortisation ("EBITDA")
Depreciation and amortisation (627) (434)
Profit before interest and taxation 1 640 1 523
Investment income 111 32
Fair value adjustments of investment (6) 2
Profit before taxation 1 745 1 557
Taxation (366) (524)
Attributable profit for the period 1 379 1 033
Reconciliation of headline earnings
Earnings attributable to equity 1 379 1 033
shareholders
Adjusted for:
Fair value adjustment on investment 6 (2)
Profit on disposal of tangible assets (7) (3)
Headline earnings attributable to equity 1 392 1 028
shareholders
Number of shares (`000)
In issue at year end (net of treasury) 76 189 66 472
Weighted average 69 453 66 733
Fully diluted weighted average 69 594 66 798
Basic earnings per share (cents) 1.98 1.55
Fully diluted earnings per share (cents) 1.98 1.55
Headline earnings per share (cents) 2.00 1.55
Fully diluted headline earnings per 2.00 1.55
share (cents)
Condensed Group Balance Sheet
Reviewed Audited
March March
2008 2007
R`000 R`000
ASSETS
Non-current assets 3 448 1 797
Tangible assets 1 036 846
Intangible assets 2 169 677
Investment 18 23
Deferred taxation 225 251
Current assets 14 012 8 425
Trade and other receivables 6 640 5 505
Cash and cash equivalents 7 372 2 920
Total assets 17 460 10 222
EQUITY
Equity attributable to equity holders of 14 631 7 149
the company
Share capital and premium 11 933 5 169
Accumulated profit 2 698 1 980
Liabilities
Current liabilities 2 829 3 073
Trade and other payables 2 300 2 522
Deferred revenue 304 335
Income tax payable 225 216
Total equity and liabilities 17 460 10 222
Number of shares in issue (`000) 76 189 66 472
Net asset value per share (cents) 19,2 10,7
Net tangible asset value per share 16,3 9,7
(cents)
Condensed Group Statement of Changes in Equity
Share Share Retaine Total
capital premium d equity
R`000 R`000 income R`000
R`000
Balance 1 April 2006 67 5 316 1 325 6 708
Profit for the period - - 1 033 1 033
Ordinary dividend paid - - (378) (378)
Treasury shares purchased - (214) - (214)
Total changes 67 (214) 655 441
Balance at 1 April 2007 67 5 102 1 980 7 149
Profit for the period - - 1 379 1 379
Ordinary dividend paid - - (660) (660)
New shares issued 9 6 981 - 6990
Treasury shares purchased - (227) - (227)
Total changes 9 6 754 719 7 482
Balance at 31 March 2008 76 11 856 2 699 14 631
Condensed Group Cash Flow Statement
Reviewed Audited
March March
2008 2007
R`000 R`000
Cash inflows/(outflows) from operating
activities
Cash generated by operations 2 231 1 858
Movements in working capital (1 361) (1 668)
Cash generated by operating activities 870 190
Investment income 111 32
Normal taxation paid (357) -
Dividend paid (660) (378)
Net cash flow from operating activities (36) (156)
Cash inflows/(outflows) from investing
activities
To expand operations (1 654) (791)
Acquisition of intangible assets
Acquisition of tangible assets (632) -
Proceeds on disposal of tangible assets 20 5
Net cash flow from investing activities (2 266) (786)
Cash inflows/(outflows) from financing 6 981 -
activities
Shares issued
Acquisition of treasury shares (227) (215)
Net cash flow from investing activities 6 754 (215)
Net movement in cash and cash 4 452 (1 157)
equivalents for the period
Cash and cash equivalents at beginning 2 920 4 077
Cash and cash equivalents at end of 7 372 2 920
period
Segmental Reporting
Reviewed Audited
March March
2008 2007
R`000 R`000
By lines of business
Revenue
Advertising 22 917 17 706
Newsletters 998 1 408
23 915 19 114
Attributable profit for the period
Advertising 1 239 775
Newsletters 140 258
1 379 1 033
FINANCIAL REVIEW
Moneyweb posted satisfactory financial results for the year
ended March 2008 ("2008 year") with headline earnings per
share rising 29% on a 25% improvement in revenues. Headline
earnings per share rose from 1,55 cents to 2,0 cents and the
dividend has been maintained at 1,0 cent a share. Net cash
generated by the business posted a healthy improvement on the
previous financial year.
While the results for the 2008 year are in line with the
company`s growth objectives, the second half of the year was
disappointing with revenues up 21% year on year compared with
the 30% improvement posted during the six months to September
2007. This caused the EBITDA margin to drop to slightly below
the 10% benchmark to 9,5% (2007: 10,2%).
The disappointing second half was due mainly to uncertainty
over the future of Moneyweb`s English radio platforms, which
was only finalised during May 2008 when the flagship English
language programme found a new home on SAFM. This followed
the repositioning of Radio 2000 into a youth sport and music
station, ending a four year partnership with the station. The
uncertainty led to a postponement in the renewal of the
headline advertising contract for the company`s English and
Afrikaans business radio shows.
To address this vulnerability towards advertising-based
revenues, a series of strategic initiatives are being pursued,
including some outside of the traditional media field. The
company remains committed to securing its own broadcasting and
online gaming licences. But it is also pursuing ways to
deliver content through the mobile telecoms and broadband
arenas, and to leverage the company`s powerful brand through
the launching of partnerships in the financial services
sector.
With the exception of Mineweb, for reasons discussed below
under the heading "Offshore Operations", costs have been
contained to rise in line with revenue growth.
The increase in intangible assets in the 2008 year relates to
development costs incurred to enhance all the websites of the
group.
OPERATIONAL REVIEW
The company`s Moneyweb.co.za website is flourishing with
unique visitors to its home page (the key matrix as it
reflects the core audience) growing at over 20% year on year.
According to Google Analytics, Moneyweb.co.za`s core audience
now exceeds 80 000 unique visitors, 85% of whom are South
Africa-based. At the end of May 2008, Google put the site`s
total unique monthly visitors at over 121 000.
The continued audience growth is pleasing given the launch of
five "mini-sites" during the past year off the customized
publishing system developed by the company`s technology
partner. These sites, which are attracting their own dedicated
audiences, are serving niche communities in real estate; tax;
politics; investment banking; sport and the youth market.
On 1 June 2007, the company entered into a one year contract
to produce and present Power Lunch on CNBC Africa, the new
satellite channel launched locally under franchise to the
global business TV brand. The partnership, based on revenue
share, did not fulfill expectations. As a result Moneyweb
decided that it would not renew the contract which expired at
the end of May 2008.
BEE TRANSACTION
From a longer-term perspective, the most significant
development of the past year was the introduction of the
Isingqi Consortium as a 26% shareholder, making Moneyweb fully
BEE compliant. This led to the injection of almost R7 million
in fresh capital into the business in a transaction which was
concluded at the market price of 70 cents a share. As a result
of the transaction, the company`s tangible net asset value
rose from 9,7 cents a share to 16,3 cents a share.
OFFSHORE OPERATIONS
Moneyweb`s offshore operations received considerable attention
over the past year and are being re-assessed given the
opportunities presented by the new strategic initiatives being
pursued within South Africa. The Moneyweb.co.uk web address,
bought in 2001 was sold subsequent to yearend.
In January 2008, a partnership agreement was secured between
the company`s wholly-owned subsidiary Mineweb.com and the
Vancouver-based Infomine.com to combine the efforts of the two
websites in the global arena. Integration has been complex and
taken longer than expected but remains within acceptable time
lines.
Subsequent to yearend, Mineweb was involved in a legal matter
relating to articles published towards the end of 2007.
Agreement in principle has been reached to resolve the
dispute. Mineweb`s projected profits are sufficient to absorb
legal and other costs associated with the matter. However, the
event highlighted the risks involved in managing a wholly-
owned offshore media title. A number of options are being
considered to ensure such risks are eliminated in future.
From an operating perspective, over the past two years, the
company has invested heavily in rebuilding Mineweb, with its
direct costs rising by 86% and 64% in the respective periods.
The investment has added considerably to Mineweb`s net worth.
Mineweb, a leading global mining investment website, is now
starting to make a meaningful contribution to the company`s
profits.
BASIS OF PREPARATION OF THE REVIEWED RESULTS
Statement of compliance
The condensed financial statements comprise a consolidated
balance sheet at 31 March 2008, a consolidated income
statement, consolidated statement of changes in equity and
consolidated cash flow statement for the year ended 31 March
2008. The condensed financial statements have been prepared in
accordance with the recognition and measurement criteria of
International Financial Reporting Standards ("IFRS") and the
presentation and disclosure requirements of IAS 34, Interim
Financial Reporting, JSE Listings Requirements and South
African Companies Act.
Basis of measurement
The condensed financial statements have been prepared on the
historical cost basis except for certain financial instruments
measured at fair value.
REVIEWED RESULTS
The auditors, BDO Spencer Steward (Jhb) Inc, have reviewed
these results and their unmodified review opinion is available
for inspection at the company`s registered office.
PROSPECTS
At this week`s board meeting, management was granted approval
to explore potential financial services-related transactions.
The CEO`s Letter to Shareholders in the annual report will
explain the rationale behind the decision to leverage the
Moneyweb brand through partnerships in the financial services
field.
The company has made considerable progress in providing
content through mobile telecoms platforms and continues to
explore opportunities to secure radio and online gaming
licences. Also, as mentioned above, various options are being
explored on how to de-risk the company`s offshore media
operation, Mineweb.
STATEMENT ON GOING CONCERN
The condensed financial statements have been prepared on the
going-concern basis since the directors have every reason to
believe that the company has adequate resources in place to
continue in operation for the foreseeable future.
DIVIDEND POLICY
Notice is hereby given that a cash dividend of 1,0 cent per
share ("the dividend") has been declared and is payable to
shareholders recorded in the books of Moneyweb at the close of
business on Friday, 25 July 2008. Shareholders are advised
that the last day to trade "cum" the dividend will be Friday,
18 July 2008. The shares will trade "ex" dividend as from
Monday, 21 July 2008.
Payment will be made on Monday, 28 July 2008. Share
certificates may not be dematerialised or rematerialised
during the period Monday, 21 July 2008 to Friday, 25 July
2008, both days inclusive.
On behalf of the Board
A Smith
Chairman
A B Hogg
Chief Executive Officer
20 June 2008
CORPORATE INFORMATION
Non executive directors: A Smith (Chairman); E A Jay; V Nosi; L Sipoyo
Executive directors: A B Hogg (CEO); L M Hogg
Registration number: 1998/025067/06
Registered address: First Floor, West Wing President Place, Corner Jan Smuts
Avenue and Bolton Road, Rosebank, 2196
Postal address: PO Box 102, Parklands, 2121
Company secretary: D G Wessels
Telephone: (011) 327 1277
Facsimile: (011) 327 1279
Transfer secretaries: Computershare Investor Services (Pty) Limited
Auditors: BDO Spencer Steward (Jhb) Inc
Designated Adviser: Vunani Corporate Finance
These results and an overview of Moneyweb Holdings Limited are available at
www.moneyweb.co.za.
Date: 20/06/2008 14:19:05 Produced by the JSE SENS Department.
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