| Thu 23 Sep 2010, 15:30 | | KGM - Kagiso Media Limited - Audited results and dividend declaration for the |
|
KGM
KGM
KGM - Kagiso Media Limited - Audited results and dividend declaration for the
year ended 30 June 2010
AUDITED RESULTS AND DIVIDEND DECLARATION FOR THE YEAR ENDED 30 JUNE 2010
Kagiso Media Limited
(Registration number 1957/000036/06)
("Kagiso Media" "the group" or "the company")
Share code: KGM ISIN: ZAE000014007
Profit attributable to equity holders up 18%
Headline earnings per share up 8%
Final dividend of 35 cents per share
Special dividend of 10 cents per share
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended
30 June 30 June
2010 2009
(Audited) (Audited) Change
(R`000) (R`000) %
Continuing operations
Revenue 906 271 853 675 6
Other income 18 636 13 947
Raw material and consumables (163 789) (146 851)
Commission and levies (119 085) (105 223)
Employee costs (147 709) (125 217)
Marketing and programming expenses (17 118) (25 255)
Professional and consulting fees (15 237) (16 368)
Rental and management fees (30 880) (25 052)
Depreciation (14 985) (10 868)
Amortisation (26 034) (22 924)
Other expenses (86 577) (97 770)
Operating profit 303 493 292 094 4
Finance income 14 695 15 850
Finance expenses (15 498) (23 905)
Share of results of associates 10 988 12 381
Profit before income tax 313 678 296 420 6
Income tax expense (107 472) (108 061)
Profit for the year from continuing 206 206 188 359 9
operations
Discontinued operations
Profit/(Loss) after tax for the
year from discontinued
operations 4 268 (2 888)
Profit arising from discontinuance 17 521 8 993
of operations
Profit for the year 227 995 194 464 17
Other comprehensive income for the - -
year, net of tax
Total comprehensive income for the 227 995 194 464 17
year, net of tax
Profit attributable to:
Equity holders 199 695 168 929 18
Non-controlling interest 28 300 25 535 11
227 995 194 464 17
Total comprehensive income
attributable to:
Equity holders 199 695 168 929
Non-controlling interest 28 300 25 535
227 995 194 464 17
RECONCILIATION OF HEADLINE EARNINGS
Year ended
30 June 30 June
2010 2009
(Audited) (Audited) Change
(R`000) (R`000) %
Profit for the year attributable to
equity holders 199 695 168 929 18
Impairment of goodwill - 8 226
Impairment of property, plant and - 332
equipment
Profit arising from discontinuance (17 521) (8 993)
of operations
Loss on disposal of intangible 767 -
assets
Loss on disposal of property, plant 85 892
and equipment
Headline earnings 183 026 169 386 8
Headline earnings per share 136,8 126,7 8
Diluted headline earnings per share 136,6 126,5 8
Earnings per share - continuing
operations
Earnings per share (cents) 133,0 121,8 9
Diluted earnings per share (cents) 132,8 121,6 9
Earnings/(Loss) per share -
discontinuing operations
Earnings/(Loss) per share (cents) 3,2 (2,2) (248)
Diluted earnings/(loss) per share 3,2 (2,2) (248)
(cents)
Shares used in calculations
Number of shares in issue (`000s) 133 792 133 792 -
Weighted average number of shares 133 792 133 726 -
in issue (`000s)
Weighted average number of shares 133 983 133 870 -
in issue for diluted earnings per
share (`000s)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended
30 June 30 June
2010 2009
(Audited) (Audited)
(R`000) (R`000)
Equity at the beginning of the year 588 370 455 587
Ordinary shares issued in terms of the share - 1 179
option scheme
Total comprehensive income for the year 227 995 194 464
Employee share option scheme: value of 70 180
services provided
Non-controlling share of acquisition net - 33 819
assets
Non-controlling interest transferred on (1 412) -
disposal of net assets
Dividends paid (99 816) (96 859)
715 207 588 370
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June
2010 2009
(Audited) (Audited)
(R`000) (R`000)
Assets
Non-current assets 591 842 643 688
Property, plant and equipment 42 136 42 731
Intangible assets 299 605 322 123
Goodwill 170 077 185 896
Investment in associates 59 169 58 750
Deferred income tax assets 20 855 20 538
Loans receivable - 13 650
Current assets 540 585 448 044
Inventories 18 373 19 050
Trade and other receivables 237 208 253 238
Loans receivable 2 119 2 329
Income tax asset 1 284 -
Available-for-sale financial asset 7 382 -
Cash and cash equivalents 274 219 173 427
Assets classified as held for sale - 58 372
Total assets 1 132 427 1 150 104
Equity
Capital and reserves attributable to equity
holders
Ordinary share capital 1 338 1 338
Share premium 14 510 14 510
Revaluation and other reserves 88 585 88 515
Retained earnings 513 953 397 210
Total shareholders` equity 618 386 501 573
Non-controlling interests 96 821 86 797
Total equity 715 207 588 370
Liabilities
Non-current liabilities 210 610 313 053
Borrowings 128 118 219 069
Deferred income tax liabilities 82 492 93 984
Current liabilities 206 610 227 175
Trade and other payables 168 290 188 162
Borrowings 30 897 20 969
Income tax liabilities 7 423 18 044
Liabilities directly associated with assets - 21 506
classified as held for sale
Total liabilities 417 220 561 734
Total equity and liabilities 1 132 427 1 150 104
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended
30 June 30 June
2010 2009
(Audited) (Audited)
(R`000) (R`000)
Cash flow from operating activities
Cash generated from operations 340 381 324 466
Finance expenses paid (1 792) (2 940)
Income tax paid (131 216) (106 323)
Dividends paid to equity holders (82 952) (78 869)
Dividends paid to non-controlling interest (1 560) -
of disposed investments
Dividends paid to non-controlling interest (16 864) (17 990)
Dividends paid to preference shareholders (13 959) (21 998)
Total net cash generated from operating 92 038 96 346
activities
Cash flow from investing activities
Acquisition of subsidiaries, net of cash - (68 570)
acquired
Acquisitions by joint ventures, net of cash - (2 125)
Acquisition of joint ventures, net of cash - (145)
Purchases of property, plant and equipment (15 994) (10 637)
Proceeds from disposal of property, plant 1 396 745
and equipment
Purchases of intangible assets (4 287) (4 757)
Proceeds from disposal of intangible assets - 14 350
Proceeds from disposal of investments, net 35 057 10 456
of cash
Proceeds from sale of assets held for sale - 2 546
Preference share redeemed 13 650 1 050
Advances of loans to associates - (1 351)
Repayment of loans by associates 3 217 3 498
Finance income received 12 081 15 529
Preference dividends received 2 614 5 413
Dividends received from associates 7 353 2 651
Total net cash generated from/(used 55 087 (31 347)
in)investing activities
Cash flow from financing activities
Proceeds from issue of ordinary shares - 1 179
Proceeds from borrowings 4 036 -
Repayment of borrowings - (987)
Preference shares redeemed (55 988) (23 988)
Total net cash used in financing activities (51 952) (23 796)
Total net cash flows 95 173 41 203
Cash and cash equivalents at the beginning 179 046 137 843
of the year
Cash and cash equivalents at the end of the 274 219 179 046
year
Included in assets held for sale - (5 619)
Included in the cash and cash equivalents 274 219 173 427
per the statement of financial position
SUPPLEMENTARY INFORMATION
Disposal of investments
In the current year, the group disposed of the following investments which are
included in the results of the discontinued operations:
- The sale of Kagiso Outdoor (Proprietary) Limited, a 65% owned subsidiary of
Kagiso Media Limited and 35% owned by MSG Afrika Media (Proprietary) Limited
which was concluded on 14 December 2009; and
- The sale of a joint venture, Inkfly (Proprietary) Limited by Urban Brew
Studios on 1 January 2010.
Details of the fair values of assets and liabilities disposed of during the year
at the date of sale are as follows:
Kagiso
Outdoor
and Merafe
R`000 Outdoor Inkfly Total
Total value of assets and (30 957) 228 (30 729)
liabilities disposed
Sale proceeds 40 592 200 40 792
Less KM share of the total 20 122 (228) 19 894
value of assets and
liabilities disposed
Less KM portion of intergroup (18 297) - (18 297)
borrowing settled
Less Goodwill on consolidation (24 868) - (24 868)
at date of sale
Profit/(Loss) on disposal in 17 549 (28) 17 521
group accounts
DISCONTINUED OPERATIONS
30 June 2010 30 June 2009
(Audited) (Audited)
(R`000) (R`000)
The results of the discontinued operations
for the year are as follows:
Revenue and other income 5 122 95 017
Expenses (839) (95 213)
Profit/(Loss) before income tax 4 283 (196)
Income tax expense (15) (2 692)
Profit/(Loss) after tax for the year from 4 268 (2 888)
discontinued operations
Earnings/(Loss) per share:
Basic from discontinued operations (cents) 3,2 (2,2)
Diluted earnings per share (cents) 3,2 (2,2)
Profit/(Loss) arising from discontinuance
of operations
Disposal of rights to operating the - 10 049
exhibition shows
Disposal of a subsidiary: Kagiso - (6 960)
Exhibitions and Events Solutions
(Proprietary) Limited
Disposal of a joint venture: Johannesburg - 5 904
International Motor Show (Proprietary)
Limited
Disposal of a joint venture: Inkfly (28) -
(Proprietary) Limited
Disposal of a subsidiary: Kagiso Outdoor 17 549 -
(Proprietary) Limited and its investment in
Merafe Outdoor, an asset previously held-
for-sale
Total profit arising from discontinuance of 17 521 8 993
operations
SHARE CAPITAL
Ordinary Share
Number of shares premium Total
shares (R`000) (R`000) (R`000)
1 July 2009 133 791 854 1 338 14 510 15 848
Shares issued - - - - -
employee share
option scheme
Share issue - - - -
expenses
30 June 2010 133 791 854 1 338 14 510 15 848
1 July 2008 133 507 611 1 335 13 334 14 669
Shares issued - 284 243 3 1 180 1 183
employee share
option scheme
Share issue - - (4) (4)
expenses
30 June 2009 133 791 854 1 338 14 510 15 848
CAPITAL EXPENDITURE
Tangible Intangible Goodwill
(R`000) assets assets
Year ended 30 June 2010
Opening net carrying amount 42 731 322 123 185 896
Additions 15 994 4 287 -
Disposals (1 482) (767) (944)
Discontinued operations (126) - -
Depreciation, amortisation and (14 985) (26 034) -
impairment
Other movements 4 (4) (14 875)
Closing net carrying amount 42 136 299 605 170 077
Year ended 30 June 2009
Opening net carrying amount 30 937 327 529 147 777
Additions 10 637 4 757 -
Acquired from business 28 497 39 171 55 384
combinations
Disposals (1 806) (1) -
Reclassified as held-for-sale (4 693) (17 281) (24 019)
Discontinued operations (9 596) (6 433) (5 586)
Depreciation, amortisation and (11 245) (22 924) (8 226)
impairment
Other movements - (2 695) 20 566
Closing net carrying amount 42 731 322 123 185 896
Capital expenditure commitments
The future minimum capital
commitments within the
following 12 months which have
been approved by the board of
directors but not contracted
for as at balance sheet date
and not recognised in the
financial statements are as
follows:
Year ended 30 June 2010 21 365 2 558 -
Year ended 30 June 2009 5 875 5 514 -
Borrowings
Year ended
30 June 2010 30 June 2009
(Audited) (Audited)
(R`000) (R`000)
Non-current borrowings
Preference shares 109 322 185 170
Straight-lining lease liability 4 569 -
Instalment sale agreements 8 063 9 738
Contingent consideration liabilities 6 164 24 161
128 118 219 069
Current
Preference share 19 988 -
Other short-term borrowings 1 825 2 059
Loans from related parties - 15 751
Contingent consideration liability 4 548 -
Instalment sale agreements 4 536 3 159
30 897 20 969
Total borrowings 159 015 240 038
Contingent liabilities
Year ended
30 June 30 June
2010 2009
(Audited) (Audited)
(R`000) (R`000)
Amount outstanding under bank facilities of 700 474
a previous subsidiary, System Publishers
(Proprietary) Limited
RELATED PARTY TRANSACTIONS
Loans to related parties
Advanced/
(repaid)
Opening during the Closing
R`000 balance year Interest balance
Loans to directors and
key management
(Unrestricted Share
Purchase Scheme)
30 June 2010 12 635 (483) 1 090 13 242
30 June 2009 9 484 1 692 1 459 12 635
Loans to directors and key management are granted in terms of the
"Unrestricted Share Purchase Scheme". These loans are repayable within
six years from date of grant and carry interest at prime less two
percentage points. The shares owned by the participants in terms of the
scheme serve as guarantee to the loans. The loans are deemed current and
risk-free albeit a possible fluctuations in the share price.
Loans to associates
30 June 2010 17 235 (3 217) - 14 018
30 June 2009 19 427 (2 192) - 17 235
The loans to associates are unsecured, interest free and may be payable
on demand.
COMMENTARY
1. Financial review
General
Headline earnings per share increased by 8% for the year ended 30 June 2010 to
136,8 cents (2009: 126,7 cents) underpinned by a steady performance of the
Broadcasting assets in tough market conditions.
Revenue
Kagiso Media reported revenue for the year from continuing operations of R906,3
million, an increase of 6%. The group benefitted with full year results from
Urban Brew Studios (UBS) for the first time amounting to R153,7 million (2009:
R128,3 million) and New Media asset comprising of Gloo Digital Design (Gloo) and
Acceleration Media which delivered R37,7 million (2009: R11,6 million). The
Broadcasting segment defended its market position with stable revenue of R472,4
million (2009: R469,9 million) against declining advertising spend during the
year. The Information and Other segment reported revenue of R240,2 million
(2009: R242,3 million).
Operating profit margin
The group reported operating profit of R303,5 million (2009: R292,1 million) a
growth of 4%. Group-wide cost management initiatives as well as the full year
effect of UBS and Gloo positively influenced group profit. In the year under
review operating profit was negatively impacted by doubtful debt provisions
which had to be raised in respect of West Africa and Sudan. More stringent
credit policies have been implemented to prevent future losses of this nature.
The Broadcasting segment maintained operating margins within the target range
set by management, with stable operating profit of R235,6 million. Operating
profit of the Information and Other segment increased by 15% to R68,2 million
(2009: R59,4 million). The results of this segment were positively impacted by
winding down of the Kagiso Exhibitions and Events business which resulted in
cost savings of R14,3 million. The New Media segment delivered sound profit
growth of R9,7 million (2009: R2,1 million) which was well ahead of
expectations. Operating profit for the Content segment was 3% lower at R25,0
million due to challenging markets both domestically and internationally.
Finance income and expenses
Kagiso Media showed a significant decline in net finance costs to R0,8 million
(2009: R8,1 million) as a result of reduced borrowings. Finance expenses pertain
mainly to the dividend payable on preference shares of R12,3 million (2009:
R20,4 million).
Associates
The group`s after tax share of results of associates amounted to R10,9 million
(2009: R12,4 million). This consists of Kagiso Media`s holdings in OFM, Heart
104.9, iGagasi 99.5 and Kaya FM.
Taxation
The effective tax rate decreased marginally from 36,5% to 34,3% due to movements
in the deferred tax account. The tax charge for the year included a charge for
Secondary Tax on Companies ("STC") of R12,6 million (2009: R6,5 million). The
effective tax rate excluding STC is 30,3%, as compared to 34,3% in the previous
reporting period.
Cash flow
Cash generated from operations increased to R340,4 million (2009: R324,5
million) which yet again underlines the ability of the group to convert profits
into cash.
The group reported cash balances at 30 June 2010 of R274,2 million (2009: R173,4
million). The R100,8 million increase in cash is attributable mainly to the
strong operating performance of the group`s entities. Proceeds from the disposal
of the Outdoor business amounted to a net cash inflow of R35,1 million and
payments of dividends resulted in a cash outflow of R83,0 million (2009: R78,9
million).
Borrowings
The total borrowings of the group have decreased in comparison to the previous
financial year and this is attributable mainly to the redemption of preference
shares to the value of R55,9 million and a decrease in the contingent
consideration liability of R13,5 million.
2. Operational review
During the year under review and in the comparative year, revenue, the results
of operations and profit/(loss) per business segment were as follows:
SEGMENTAL ANALYSIS YEAR ENDED 30 JUNE
Operating
Revenue profit/(loss)
R`000 2010 2009 2010 2009
Corporate 2 255 1 434 (35 017) (31 656)
Broadcasting 472 430 469 945 235 634 236 496
Information 240 247 242 345 68 206 59 406
and Other
New Media 37 689 11 635 9 663 2 066
Outdoor - - - -
Content 153 650 128 316 25 007 25 782
Total 906 271 853 675 303 493 292 094
Profit/(loss)* Total assets
R`000 2010 2009 2010 2009
Corporate (36 134) (53 626) 47 203 8 245
Broadcasting 171 140 172 620 622 438 583 479
Information 51 747 39 315 221 284 254 723
and Other
New Media 3 460 909 37 514 27 272
Outdoor - 823 - 58 372
Content 9 482 8 888 181 849 197 475
Total 199 695 168 929 1 110 288 1 129 566
*Attributable to equity holders of the company.
The group has re-organised its reporting structure which has necessitated a
change in the reportable segments in order to comply with IFRS 8 Operating
Segments. This change has resulted in the restatement of the prior year figures.
Corporate
Due to a judicious cost management focus at the corporate office, operating
expenses (excluding STC) declined by 11% to R22,4 million (2009: R25,1 million)
as discretionary spending was either postponed or put on hold.
Broadcasting
The Broadcasting segment showed a marginal improvement in revenue to R472,4
million in 2010 (2009: R469,9 million). Excluded from the revenue figures
mentioned above are the revenue for Gloo and Acceleration Media which have been
included in a new segment called New Media. During the year, a New Media segment
was established to house Gloo and Acceleration Media allowing for greater focus
on these businesses as independent commercial entities. Accordingly, the
Broadcasting segment`s reported revenue for 2009 has been adjusted.
Despite the challenging operating environment, operating profit of R235,6
million was in line with 2009. The operating margin remains within the target
range set by management. The Broadcasting segment took cognisance early on in
the financial year that the tight economic environment would persist well into
2010. It therefore implemented wide ranging cost-management initiatives across
all radio assets which reflected substantial cost savings without impacting the
quality of service.
The Broadcasting advertising industry in particular has been under pressure due
to the economic recession and depressed consumer spending. Radio advertising
spend grew by 2,4% year on year compared to an overall media average of 8,4%
growth. Radio`s share of total advertising spend contracted from 13,1% to 12,4%.
The biggest beneficiary of 2010 FIFA World CupTM advertising was the television
industry. In line with expectations, the radio industry benefitted from
`overflow` spending in the months leading up to the event.
The segment`s significant Broadcasting assets namely East Coast Radio grew its
core target market audiences by 13% year on year and Jacaranda 94.2 FM
maintained market audiences. In contrast to the declining time spent listening
(TSL) across the industry, the morning shows of the Broadcasting segment`s radio
stations continued to perform well.
Kaya FM`s overall listenership over seven days increased while OFM showed a
marginal improvement. The Morning Breakfast Show of Heart 104.9 increased its
audience by more than 14%. The audience of iGagasi 99.5 remained stable.
Information and Other
The Information and Other segment was redefined during the year and comprises
Kagiso Media`s 50% stake in LexisNexis South Africa, the remaining assets of
Kagiso Exhibitions and Events and Mobil Alliance.
Although LexisNexis has a long growth track record, it encountered tough trading
conditions across all of its operations, leading to flat revenue for the year.
However operating profit declined by 12% largely as a result of a provision of
R6,5 million relating to a West African debtor. In order to resume its growth
trajectory, LexisNexis has clear strategies in place for the year ahead. These
include the continued migration of customers to online research solutions.
LexisNexis will continue to grow its footprint in the academic university market
and building its technology.
This segment houses the remaining assets of Kagiso Exhibitions and Events (KEE).
A partnership was entered into by KEE with an emerging eventing company, Witches
and Wizards, to manage existing events for a three-year period. Mobil Alliance
joint venture of KEE, continued to show strong growth which was buoyed by a
contract to supply outdoor screens at public viewing areas for outlying regions
during the 2010 FIFA World CupTM.
New Media
The New Media segment comprising of Kagiso Media`s digital media assets namely
Gloo and Acceleration Media which are focused on services and publishing was
established as a standalone segment during the year. The divisionalisation is a
clear demonstration of the group`s strategic focus of developing its online
business offering.
Although most businesses in the media industry suffered during the recession,
the digital market continues to deliver strong growth, albeit off a relatively
low base. According to the OPA (Online Publishers Association), advertising
spend increased in this area by 31,4% in 2009.
Acceleration Media delivered a good performance for the year. It is increasing
its focus on consultancy services, leveraging its data analysis capabilities and
expertise to deliver enhanced media results.
Gloo maintained its leadership position and delivered a strong performance. It
won a number of digital creative awards. Gloo made further investments during
the year to enhance the quality of its work and service levels.
On 17 May 2010, the group concluded an agreement with Microsoft to manage the
South African MSN portal, leading to the creation of Kagiso MSN. The new site
will be officially launched in September. Start-up costs in respect of this
investment are expected to have a dilutive effect on profit in 2011 with a
positive contribution expected in 2012.
Content
The 2010 financial year was tough for television producers in South Africa as
the 2010 FIFA World CupTM disrupted regular scheduling. Across the industry the
rate of commissioning new productions and renewing existing programmes slowed as
a result of the combined impact of the economic downturn and delays in decision
making.
Urban Brew Studios delivered a solid 12 month operating result against the
backdrop of challenging markets for production studios both in the domestic and
international markets. Its internal focus on cost management dampened the impact
of the tight market.
Urban Brew Studios has a strong track record of delivering popular productions
which recognise the value of local content and talent. These include audience
favourites such as: "Die Foon" and "Kom Ons Karaoke" for Kyknet "Headline" on
Mzansi Magic and the recently launched "Tonight with Trevor Noah" on M-Net. All
these productions were awarded in the 2010 DSTV MultiChoice pitching cycle.
"Soweto TV" continued to build audience loyalty during the year, delivering
pleasing growth.
With the recent acquisition of assets from Obeco, a specialist outside-broadcast
company, Urban Brew Studios increased its digital broadcast facilities.
3. Regulatory matters
The dispute between the National Association of Broadcasters (NAB), representing
commercial radio operators, and the South African Music Rights Association
(SAMPRA) was referred to the Copyright Tribunal during the course of the year.
This follows a claim served on broadcasters by SAMPRA on behalf of music
performers. The Tribunal will seek to make a determination on the calculation of
the royalty payable, the effective date and question of mechanical rights.
The broadcasting regulator, Independent Communications Authority of South Africa
(ICASA), has yet to announce the holders of new radio licences in the Pretoria,
Durban and Cape Town markets. ICASA is due to hold public hearings before making
its final announcement. More than 40 applications were submitted for the
licences, of which there is one in each of the three cities.
The company will continue to monitor developments regarding the ICASA Amendment
Bill (which seeks to review the relationship between the Minister of
Communications and ICASA) and the Protection of Information Bill. The latter
piece of legislation would, together with the mooted Media Appeals Tribunal,
have an impact on the media`s ability to report news and current affairs.
Kagiso Media has remained actively involved in industry forums, such as the NAB,
which seek to advance the collective interests of the broadcasting industry.
4. Black economic empowerment
Kagiso Media is rated a Level 2 contributor by the National Empowerment Rating
Agency, the company`s highest rating ever in terms of the Department of Trade
and Industry BBBEE Codes. Work in the next year will be focused on further
improving the BBBEE rating of Kagiso Media and its associates and joint
ventures. The annual verification is currently underway.
5. Dividend declaration
It is the group`s policy to return 50% of its headline earnings for the year to
the shareholders. In line with the strong operating performance backed by strong
cash flows of Kagiso Media, the Board of Directors has decided to declare a
final dividend of 35 cents and a special dividend of 10 cents per share.
Notice is hereby given that a total dividend of 45 cents (2009: 27 cents) per
share has been declared in respect of the year ended 30 June 2010 and is payable
to holders of ordinary shares recorded in the register of the company on Friday,
15 October 2010.
The following salient dates apply to this dividend:
Last date to trade cum-
Last date to trade cum-dividend Friday, 8 October 2010
Shares commence trading ex-dividend Monday, 11 October 2010
Record date Friday, 15 October 2010
Payment of the dividend Monday, 18 October 2010
Share certificates may not be dematerialised or rematerialised between Monday,
11 October 2010 and Friday, 15 October 2010, both days inclusive.
In terms of the Companies Act, the directors confirm that, after the payment of
the above dividend, the company will be able to meet its commitments and settle
its liabilities as these fall due in the ordinary course of business and that
its consolidated assets, fairly valued, exceed its consolidated liabilities.
6. Basis of preparation
The condensed consolidated financial year-end information is based on the
audited financial statements of the Group for the year ended 30 June 2010 which
have been prepared in accordance with International Financial Reporting
Standards ("IFRS") and in compliance with the Listing Requirements of the JSE
Limited and the South African Companies Act 1973, on a consistent basis with
that of the prior period. The financial information is presented in accordance
with IAS 34.
7. Accounting policies
The accounting policies adopted are consistent with those of the annual
financial statements as at 30 June 2009, as described in the annual financial
statements for the year ended 30 June 2009. During the year under review, the
group adopted all of the IFRS and Interpretations being effective and deemed
applicable to the group. None of these had a material impact.
The results of discontinued operations are presented separately in the income
statement and the assets and liabilities associated with these operations are
included with non-current assets (or disposal groups) held for sale in the
balance sheet.
As a result of the discontinued operations in the current year, the comparative
information in the income statement has been re-presented. The accounting
policies applied are consistent with those applied in the preparation of the
group`s annual financial statements for the year ended 30 June 2010.
8. Independent audit by the auditors
The condensed consolidated results have been audited by our auditors,
PricewaterhouseCoopers Inc. who have performed their audit in accordance with
International Standards on Auditing. A copy of their unqualified audit report is
available for inspection at the registered office of the company.
9. Post balance sheet events
Kagiso Broadcasting (Proprietary) Limited ("KBC") has acquired the assets and
liabilities of East Coast Radio (Proprietary) Limited ("ECR"), the wholly owned
subsidiary of Kagiso Media Investments (Proprietary) Limited. The assets were
acquired on 1 July 2010 at net book value. ECR business will operate as a
division of KBC with effect from 1 July 2010.
10. Prospects
The group is seeing signs of improving trading conditions and trends in
advertising spend indicate a return to normal. This will underpin the
performance of the Kagiso Media Group as a whole, and especially the
Broadcasting segment. However, in the Information and Other segment, the group
anticipates a tough trading year as this sector generally lags behind economic
recovery. The New Media segment remains well positioned to show good growth
albeit off a low base. Good programming schedules in the Content segment suggest
improved returns for the forthcoming year, however the pace of final contract
awards is still of concern.
On behalf of the board
RM Motanyane M Morobe
Chairperson Chief executive
23 September 2010
Registered office: 1st Floor, Kagiso House, 16 Fricker Road, Illovo Boulevard,
Illovo, 2196
Transfer secretaries: Link Market Services South Africa (Proprietary) Limited,
5th Floor, 11 Diagonal Street Johannesburg, 2001. (PO Box 4844, Marshalltown,
2000)
Sponsor: Investec Bank Limited
Directors: RM Motanyane (Chairperson)#, M Morobe* (Chief Executive), MR van Zyl*
(Financial Director), HI Appelbaum, OC Essack*, RL Hiemstra#, ZJ Matlala, KL
Matseke, AA Paruk#, A Patel, WC Ross#
*Executive #Independent
Company secretary: DS Mtshali
Also available at: www.kagisomedia.co.za
Date: 23/09/2010 15:30:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
