| Tue 23 Jun 2009, 16:38 | | AME - African Media Entertainment - Reviewed Results For The 17 Month |
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AME
AME
AME - African Media Entertainment - Reviewed Results For The 17 Month
Period Ended 31 March 2009
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")
REVIEWED RESULTS
for the 17 month period ended 31 March 2009
CONSOLIDATED INCOME STATEMENTS
Pro Forma Unaudited
12 months 12 months
to to
31 March 31 March
% 2009 2008
change R`000 R`000
Revenue (6) 150 894 160 920
Cost of sales (46 418) (53 289)
Gross profit 104 476 107 631
Operating expenses (72 220) (70 382)
Operating profit (13) 32 256 37 249
Finance income 7 174 5 417
Finance cost (438) (448)
Loss from associate (619) (441)
companies
Net profit before taxation (8) 38 373 41 777
Taxation (10 768) (13 539)
SA normal taxation (10 975) (11 862)
Deferred tax 2 487 (267)
Secondary tax on (2 280) (1 410)
companies
Profit for the period (2) 27 605 28 238
Attributable to:
Minority interest 3 978 4 120
Equity holders of the (2) 23 627 24 118
company
Earnings per share (cents) (2) 276,7 282,4
Headline earnings per share (2) 277,1 281,8
(cents)
Diluted earnings per share (3) 272,4 279,6
(cents)
Diluted headline earnings (2) 272,8 279,0
per share (cents)
Weighted average number of 8 539 8 539
shares in issue (000`s)
Diluted average number of 8 674 8 626
shares in issue (000`s)
Headline earnings
reconciliation
Profit attributable to 23 627 24 118
equity holders
Loss/(profit) on disposal 36 (51)
of fixed assets
Profit on disposal of - (2)
investments
Headline earnings 23 663 24 065
Reviewed Audited
17 months 12 months
to to
31 March 31 October
2009 2007
R`000 R`000
Revenue 216 386 141 101
Cost of sales (66 550) (39 166)
Gross profit 149 836 101 935
Operating expenses (100 542) (63 260)
Operating profit 49 294 38 675
Finance income 9 678 4 656
Finance cost (517) (455)
Loss from associate (1 900) (325)
companies
Net profit before taxation 56 555 42 551
Taxation (15 901) (13 664)
SA normal taxation (16 355) (11 634)
Deferred tax 2 734 (620)
Secondary tax on (2 280) (1 410)
companies
Profit for the period 40 654 28 887
Attributable to:
Minority interest 6 257 5 028
Equity holders of the 34 397 23 859
company
Earnings per share (cents) 402,8 279,4
Headline earnings per share 403,2 278,8
(cents)
Diluted earnings per share 396,6 276,6
(cents)
Diluted headline earnings 397,0 276,0
per share (cents)
Weighted average number of 8 539 8 539
shares in issue (000`s)
Diluted average number of 8 674 8 626
shares in issue (000`s)
Headline earnings
reconciliation
Profit attributable to 34 397 23 859
equity holders
Loss/(profit) on disposal 36 (51)
of fixed assets
Profit on disposal of - (2)
investments
Headline earnings 34 433 23 806
CONSOLIDATED BALANCE SHEETS
Reviewed Audited
31 March 31 October
2009 2007
R`000 R`000
Assets
Non-current assets 53 793 41 308
Property, plant and equipment 15 457 6 184
Investment in associate 1 645 1 172
Goodwill 30 431 30 426
Deferred taxation 6 260 3 526
Current assets 84 813 84 135
Trade receivables 29 991 38 721
Other receivables 1 204 1 248
Cash and cash equivalents 53 618 44 166
Total assets 138 606 125 443
Equity and liabilities
Total equity 86 546 68 705
Non-current liabilities 1 173 1 081
Operating lease accrual 923 675
Interest-bearing borrowings 250 406
Current liabilities 50 887 55 657
Trade payables 15 529 24 216
Other payables 13 987 10 927
Dividend payable 17 257 17 257
Operating lease accrual and 476 404
interest-bearing borrowings
Taxation 3 638 2 853
Total equity and liabilities 138 606 125 443
STATEMENTS OF CHANGES IN EQUITY
Reviewed Audited
31 March 31 October
2009 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 34 397 23 859
Dividend (17 256) (17 257)
Balance at end of period 39 803 22 662
Non-distributable reserve
Balance at beginning of period 861 172
Share-based payment expense 747 689
Balance at end of period 1 608 861
Minorities
Balance at beginning of period 4 734 4 207
Share of dividend (5 902) (4 303)
Change in shareholding (402) (198)
Share of profit 6 257 5 028
Balance at end of period 4 687 4 734
Total capital and reserves 86 546 68 705
CONSOLIDATED CASH FLOW STATEMENTS
Reviewed Audited
31 March 31 October
2009 2007
R`000 R`000
Cash generated by operating 50 891 41 819
activities
Net interest received 9 160 3 264
Taxation paid (17 850) (13 637)
Increase/(decrease) in working 2 469 (2 005)
capital
Cash flows from operating activities 44 670 29 441
Dividends paid (17 257) -
Cash flows from investing activities (12 738) (4 821)
Cash flows from financing activities (5 223) (4 303)
Net increase in cash and cash 9 452 20 317
equivalents
Cash and cash equivalents at 44 166 23 849
beginning of period
Cash and cash equivalents at end of 53 618 44 166
period
COMMENTARY
Basis of preparation
These reports have been prepared in accordance with the group`s accounting
policies that comply with International Financial Reporting Standards 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 at the Annual General
Meeting held on 7 May 2008. The results for the seventeen months to 31 March
2009 have been reviewed by our auditors, PKF Inc. and their unqualified report
is available for inspection at the company`s registered address. Comparative 12
month figures for the year ended 31 March 2009 and the year ended 31 March 2008
are presented for information purposes only. These figures have not been audited
and no opinion is expressed on these by the auditors.
Financial results
Due to the change in year end the periods reviewed and audited are not
comparable. The growth in earnings of the radio stations during the first twelve
months of the year was not sustained in the last five months. National
advertising revenues declined during the last five months whilst local
advertising revenues showed some growth. Revenue for the period was R216,4
million with a profit of R40,7 million.
The group generated R50,9 million in cash from its operating activities during
the 17 month period of which R8,4 million has been invested in the acquisition
of new office premises in Johannesburg and R3,6 million in equipment. After
paying tax of R17,9 million and a dividend of R17,3 million, the group ended the
year with cash resources of R53,6 million.
The profit attributable to ordinary shareholders amounted to R34,4 million
(2007: R23,9 million) with earnings per share of 402,8 cents (2007: 279,4
cents). Headline earnings per share were 403,2 cents (2007: 278,8 cents).
The prior 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.
Supplementary information for the 12 months to 31 March
The income statements for the 12 months ended 31 March 2009 and 31 March 2008
have been presented for information purposes. These income statements each
contain one peak season and make comparison more meaningful.
Revenue declined by 6% year on year mainly on the National Sales as a result of
the general decline in the economy impacting adversely on national advertisers.
Gross profit declined by 2,9% year on year due to additional costs being
incurred in setting up a sales infrastructure for Radio Northwest, Capricorn
Radio and M-Power Radio.
Net finance income grew to R7,2 million, increasing by R1,8 million over the
prior year.
The loss from associates including M-Power FM, which went live in Mpumalanga
during December 2007, is in line with expectations.
The profit attributable to ordinary shareholders amounted to R23,6 million
(2008: R24,1 million) with earnings per share of 276,7 cents (2008: 282,4
cents). Headline earnings per share were 277,1 cents (2008: 281,1 cents).
Algoa FM
The decline in the economy impacted negatively on national advertising revenues.
Local revenue increased marginally and profit after tax improved over the
previous period. The automotive industry has long been and continues to be the
most important advertising category in the footprint of Algoa FM. The sharp
decline in vehicle sales and the resultant decline in adspend has had a negative
impact on advertising demand.
Algoa FM`s latest Radio Audience Measurement Survey listenership figures reflect
a year on year growth of 4,3% from 799 000 to 834 000.The All Media Product
Survey (AMPS) pegs Algoa FM at 3% of the total radio universe, which makes it
the 9th biggest commercial station in South Africa, by listenership.
The station joined forces with both GMSA and Primedia to promote anti-crime
initiatives in its broadcast footprint. To-date, both i-Patrol and Crime Line
have proved to be successful projects and are well supported by the station`s
audience.
Major marketing events and branding opportunities over the reporting period
included Algoa FM`s involvement in the Specsavers Ironman, MTN Splash Festival,
Spar Ladies Race and the media sponsorship of the Chevrolet Warriors cricket
franchise.
Algoa FM received its newly converted Sound Broadcasting Licence agreement from
ICASA during this period.
OFM
Despite further growth in audience to 578 000 (past seven days), the economic
climate negatively affected national advertising revenues which was partially
offset by direct sales. However, with a tight focus on cost control, OFM
improved its profit after tax compared to the previous period.
A new lineup was launched in February, with the addition of a number of new
faces, including popular and controversial TV talk-show host Rian van Heerden.
The re-imaging and new look playlist was generally welcomed.
Direct sales have remained strong and good growth in revenue was seen from the
digital products team: WOMF now contributes around 3% of net revenue, and triple
digit growth has been seen on all other digital channels. The team recently
began web construction as a venture. The collapse of the motor car sales
industry negatively affected OFM Wheels. Playon.co.za continues to receive
plaudits from users and advertisers and Redstar Talent has attracted and
retained a number of well-known performers, and now needs to expand its offering
into event management and sports management to take advantage of the established
brand.
The OFM brand continued to receive good national (and international) exposure
with its media sponsorship of the Cheetahs, Griquas (Vodacom Cup Champions 09),
Leopards (promoted to Currie Cup Premier Division) and the Griffons (Currie Cup
1st Div Champions 08). The Eagles played in two finals, and were second on the
Supersport log.
OFM also received its newly converted Sound Broadcasting Licence agreement from
ICASA during this period.
United Stations
Specialist media sales house United Stations incurred a loss for the 17 month
period to 31 March 2009 mainly as a result of the significant investments in
taking new radio stations on board. This, combined with the general decline in
advertising spending which started to contract mid-year 2008 overshadowed some
noteworthy successes. United Stations achieved several major goals that have
positioned the company well to tackle what promises to continue to be difficult
trading conditions for the remainder of 2009.
The major investment in manpower and infrastructure is now complete and there
are signs across all the advertising platforms that the operating environment is
slowly improving. These improvements along with the consistent ability to
outperform both the industry and the portfolio of markets, as well as exciting
opportunities to monetise the station`s online presence point to more profitable
months ahead.
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 company continues to improve
its business and once again reflected a profit.
RadioHeads` focus is to maximise the efficacy of radio for the benefit of
advertisers and during this time of economic downturn the company has much to
offer in creating radio advertising solutions on an incredibly efficient
marketing medium.
RadioHeads is extremely well positioned at present and looks forward to a strong
rebound in the run up to 2010 and the inevitable recovery of the economy.
Dividends
A dividend of R2 per share (2007: R2) was declared in respect of the period
under review and was paid to shareholders registered on 9 April 2009. Cash
resources are retained to fund organic growth opportunities that may arise from
new primary radio licences.
Prospects
Given the prevailing weak economic environment and low business confidence, the
Board is of the view that the trading environment over the next twelve months
remains challenging.
By order of the Board
ACG Molusi Chairman
23 June 2009
Johannesburg
African Media Entertainment Limited
(Incorporated in the Republic of South Africa)
(Registration number1926/008797/06)
Share code: AME ISIN: ZAE000055802
("AME" or "the group")
Registered office
Unit Block A, Oxford Office Park, no. 5 8th Street, Houghton Estate,
Johannesburg.
PO Box 3014, Houghton, 2041
Transfer secretaries
Computershare Investor Services (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*
N Sooka*, W Tshuma* *Independent non-executive
WWW.AME.CO.ZA
Date: 23/06/2009 16:38:11 Produced by the JSE SENS Department.
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