| Fri 6 Feb 2009, 16:39 | | AME - African Media Entertainment - Interim Reports for the 12 Month Period |
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AME
AME
AME - African Media Entertainment - Interim Reports for the 12 Month Period
Ended 31 October 2008
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 12 MONTH PERIOD ENDED 31 OCTOBER 2008
ABRIDGED GROUP INCOME STATEMENT
for the 12 month period ended 31 October 2008
Reviewed % Audited
2008 change 2007
R`000 R`000
Revenue 153,362 9% 141,101
Cost of Sales (46,215) (39,166)
Gross profit 107,147 101,935
Operating expenses (72,183) (63,260)
Operating profit 34,964 -10% 38,675
Finance income 7,426 4,656
Finance cost (556) (455)
Loss from associate company (519) (325)
Net profit before taxation 41,315 -3% 42,551
Taxation (12,276) (13,664)
SA normal taxation (12,201) (11,634)
Deferred tax 505 (620)
Secondary tax on companies (580) (1,410)
Profit for the period 29,039 1% 28,887
Attributable to:
Minority interest 4,712 5,028
Equity holders of the company 24,327 2% 23,859
Earnings per share (cents) 284.9 2% 279.4
Headline earnings per share (cents) 285.8 3% 278.8
Diluted earnings per share (cents) 280.0 1% 276.6
Diluted headline earnings per share (cents) 280.9 2% 276.0
Weighted average number of shares in issue
(000`s) 8,539 8,539
Diluted average number of shares in issue
(000`s) 8,687 8,626
Headline earnings reconciliation
Profit attributable to equity holders 24,327 23,859
Loss / (profit) on disposal of fixed assets 74 (51)
Profit on disposal of investments 0 (2)
Headline earnings 24,401 23,806
STATEMENT OF CHANGES IN EQUITY
for the 12 month period ended 31 October 2008
Reviewed Audited
2008 2007
R`000 R`000
Issued capital
Balance at beginning of period 8,628 8,628
Consolidation of share trust (89) (89)
Balance at end of period 8,539 8,539
Share premium
Balance at beginning of period 32,356 32,356
Consolidation of share trust (447) (447)
Balance at end of period 31,909 31,909
Retained profit
Balance at beginning of period 22,662 16,060
Profit for the period 24,327 23,859
Dividend 0 -17,257
Balance at end of period 46,989 22,662
Non Distributable Reserve
Balance at beginning of period 861 172
Share based payment expense 457 689
Balance at end of period 1,318 861
Minorities
Balance at beginning of period 4,734 4,207
Share of dividend (6,744) (4,303)
Change in shareholding 0 (198)
Share of profit 4,712 5,028
Balance at end of period 2,702 4,734
Total capital and reserves 91,457 68,705
ABRIDGED GROUP BALANCE SHEET
at 31 October 2008
Reviewed Audited
2008 2007
R`000 R`000
Assets
Non-current assets 49,973 41,308
Property, plant and equipment 14,863 6,184
Investment in associate 653 1,172
Goodwill 30,426 30,426
Deferred taxation 4,031 3,526
Current assets 80,365 84,135
Trade receivables 40,114 38,721
Other receivables 1,229 1,248
Cash and cash equivalents 39,022 44,166
Total assets 130,338 125,443
Equity and liabilities
Total equity 91,457 68,705
Non-current liabilities 912 1,081
Operating lease accrual 531 675
Interest-bearing borrowings 381 406
Current liabilities 37,969 55,657
Trade payables 22,845 24,216
Other payables 10,102 10,927
Dividend payable 0 17,257
Operating Lease accrual & interest-bearing borrowings 924 404
Taxation 4,098 2,853
Total equity and liabilities 130,338 125,443
ABRIDGED GROUP CASH FLOW STATEMENT
for the 12 month period ended 31 October 2008
Reviewed Audited
2008 2007
R`000 R`000
Cash generated by operating activities 40,635 41,819
Net interest received 3,732 3,264
Taxation paid (11,535) (13,637)
Increase in working capital (3,315) (2,005)
Cash flows from operating activities 29,517 29,441
Dividends paid (17,257) 0
Cash flows from investing activities (10,668) (4,821)
Cash flows from financing activities (6,736) (4,303)
Net (decrease)/increase in cash and cash equivalents (5,144) 20,317
Cash and cash equivalents at beginning of period 44,166 23,849
Cash and cash equivalents at end of period 39,022 44,166
Registered office
Unit Block A, Oxford Office Park, no. 5 8th Street, Houghton Estate,
Johannesburg . P.O. Box 3014, Houghton, 2041
Transfer secretaries
Computershare Investor Services (Pty) Limited, 70 Marshall Street,
Marshalltown . P.O. Box 61051, Marshalltown, 2107
Sponsor
Arcay Moela Sponsors (Pty) Limited
3 Anerley Road, Parktown, Johannesburg. P.O. Box 62397, Marshalltown, 2107
Directors
ACG Molusi (Chairman )*, Z Lacob*, MJ Prinsloo*, N Sooka*, W Tshuma*,
L Thango* *Independent Non-executive
REVIEW FOR THE YEAR
(To the Interim Results for the year ended 31 October 2008)
Basis of preparation
These reports have been prepared in accordance with the group`s accounting
policies that comply with International Financial Reporting Standards and in
accordance with IAS34, Interim Financial Reporting, and on a basis consistent
with the policies and methods of computation as used in the Annual Financial
Statements for the year ended 31 October 2007.
Change of year end and Review by Auditors
The financial year end of AME was changed to 31 March and AME will report its
next set of audited results for the 17 months to 31 March 2009. The results for
the twelve months to 31 October 2008 have been reviewed by our auditors,
Charles Orbach & Company, and their unqualified report is available for
inspection at the company`s registered address.
Financial results
The growth in earnings of the radio stations during the first six months of the
year were not sustained in the second six months. National advertising revenues
declined during the second six months whilst local advertising revenues showed
some growth. Nonetheless the earnings from the radio stations exceeded those of
the previous year.
Revenue for the year grew by 9% from R141,1 million to R153,4 million.
Margins were maintained at AlgoaFM and OFM, however, lower margins were
realised on the new radio stations. Operating expenses increased by 14,1%
mainly because additional costs were incurred in setting up a sales
infrastructure for Radio Northwest, Capricorn Radio and M-Power Radio.
Net finance income grew to R7,4 million, increasing by R3,2 million over the
prior year of which R1,5 million was in respect of circular 9/2006 adjustments
for extended payment terms.
The loss of R0,5 million from the associate, M-Power Radio, which went live in
Mpumalanga during December 2007, is in line with expectations.
The profit attributable to ordinary shareholders amounted to R24,3 million
(2007: R23,8 million) with earnings per share of 284,9 cents (2007: 279,4
cents) increasing by 2,0% over the previous period. Headline earnings per share
were 285,8 cents (2007: 278,8 cents) increasing by 2,5% over the previous
period.
The group generated R40,6 million cash from its operations during the year
under review of which R7,3 million has been invested in new offices in
Johannesburg and R3,3 million in equipment. After paying tax of R11,5 million
and a dividend of R17,3 million, the group ended the year with cash resources
of R39,0 million.
The previous period`s comparatives for Revenue, Cost of sales, Operating
expenses and Finance income have been restated due to the reclassification of
certain revenue and expense items that had previously been netted off.
The Profit for the prior period remains unchanged.
Algoa FM
Algoa FM`s turnover increased year-on-year from R63,7 million to R68,5 million
and its profit after tax was 18% up on the previous period. Algoa FM grew its
"Past Seven Days" audience from 774 000 in November 2007 to 919 000 in 2008, an
increase of 19% year-on-year and 106% growth in listenership since 2003. The
Border Drive transmitter split now also stands at an all- time high in terms of
listeners of 147 000.
Algoa FM launched its own multimedia/digital platform and a revamped website
and also just announced its involvement in the very successful national
anti-crime initiative, CRIME LINE.
OFM
OFM introduced a number of on-air and associated innovations that helped
cushion the blow caused by economic slowdown. Audience rose to a new all A- time
high of 571 000. Revenue increased by 8,6% to R75,8 million and the station`s
costs were well managed. The net profit after tax was up by 19% on last year.
The introduction of transmitter splits for advertisers in three different
regions brought on a host of new advertisers, and exposed many smaller
advertisers to the power of radio. OFM also continued as media sponsor of the
Super 14 Cheetahs, as well as the Eagles cricket team. The Pick n Pay OFM
Classic grew, contrary to the national cycling trend, and the Spar OFM Carols
by Candlelight attracted close to 5 000 people under the stars.
Mahareng Publishing, launched two new print/online products to immediate
acclaim, and Redstar Talent also had a successful debut year. OFM also opened
its satellite office in Potchefstroom, with a daily broadcast planned from
early next year.
United Stations
The group`s specialist sales house, United Stations reflected a loss which was
largely due to the significant investments made in new infrastructure and
expanding the team to handle the sales of M-Power Radio, Radio Northwest,
Capricorn FM and Yarona as well as a community radio station.
Sales for Moneyweb increased as a result of the successful migration of its
premier show to the larger audiences on SAFM.
RadioHeads
RadioHeads is a team of radio specialists offering radio skills specifically in
the provision of Branded Content, Station Imaging, Creative and Campaign
management and Direct Response Radio solutions. The team continues to improve
its business and once again produced a healthy profit.
Kaya FM
AME`s second review of Primedia`s merger with NAIL by the Competition Appeal
Court was unsuccessful and that merger is now likely to go ahead.
Dividends
No dividends have been declared in respect of the period under review as the
cash resources are retained to fund the possible acquisition of another
economic interest in Kaya FM and to fund organic growth opportunities that may
arise from new primary radio licenses.
Prospects
Given the prevailing weak economic environment, low business confidence and the
high interest rate environment, the Board is uncertain about AME`s results for
the next five months and does not foresee an improvement over the same period
in the prior year.
By order of the Board
A C G Molusi Chairman
6 February 2009
Johannesburg
Website: www.ame.co.za
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