| Wed 20 Jun 2001, 0:00 | | M-net - Preliminary Report |
|
Electronic Media Network Limited
(Incorporated in the Republic of South Africa)
(Registration number 1985/002853/06)
(M-Net)
PRELIMINARY REPORT
Group audited results for the year ended 31 March 2001 were as follows:
ABRIDGED INCOME STATEMENTs
Year Year
ended ended
31 March 31 March
2001 2000
(audited) (audited)
R'million R'million
Cost of sales, provision of
services and operating costs 1 075,9 887,8
Operating profit 129,5 121,1
Net finance income/(costs) 1,7 (7,2)
Profit before taxation 131,2 113,9
Taxation 49,4 47,0
Profit attributable to shareholders 81,8 66,9
Dividend 50,9 42,4
Accumulated profit for the year 30,9 24,5
Headline earnings and earnings
per share (cents) 28,9 23,6
Dividend per share (cents) 18,0 15,0
ABRIDGED BALANCE SHEETS
Year Year
ended ended
31 March 31 March
2001 2000
(audited) (audited)
R'million R'million
ASSETS
Non-current assets
Property, plant and equipment 135,6 120,7
Investments and loans 46,5 49,4
Current assets 725,8 748,0
Total assets 907,9 918,1
EQUITY AND LIABILITIES
Capital and reserves 169,1 138,3
Non-current liabilities
Deferred taxation 155,6 145,0
Current liabilities 555,8 585,5
Interest-bearing debt 27,4 49,3
Total equity and liabilities 907,9 918,1
ABRIDGED CASH FLOW STATEMENTS
Year Year
ended ended
31 March 31 March
2001 2000
(audited) (audited)
R'million R'million
Cash generated from operating
activities 120,8 96,8
Net finance income/(costs) 1,7 (7,2)
Taxation paid (15,7) (23,1)
Dividend paid (50,9) (42,4)
Cash flow from operations 55,9 24,1
Utilised for:
Fixed assets (36,9) (28,2)
Investment and loans 2,9 4,4
Net cash flow 21,9 0,3
Interest-bearing debt at
beginning of period (49,3) (49,6)
Interest-bearing debt at
end of period (27,4) (49,3)
SUPPLEMENTARY INFORMATION
Year Year
ended ended
31 March 31 March
2001 2000
(audited) (audited)
R'million R'million
Included in operating profit:
Depreciation for the year 22,2 26,3
Net finance income/(costs): 1,7 (7,2)
Interest received 9,2 5,6
Interest paid (7,5) (12,8)
Investment and loans:
Loans to employee share
incentive schemes 46,5 49,4
Capital expenditure for the year 37,1 28,2
Capital expenditure committed
or authorised 10,7 24,0
Programme and film rights commitments 651,0 655,6
Number of ordinary shares in
issue (million) 283,0 283,0
Net asset value per share (cents) 59,8 48,8
Rand/naira exchange rate at 31 March 2001: R1,00 = N15,31279
No condensed statement of changes in equity has been presented as there have
been no capital transactions during the year. The only movement in equity
relates to retained profit for the year.
ACCOUNTING POLICIES
The financial statements are prepared on the historical cost basis and
comply with South African statements of generally accepted accounting
practice. The accounting policies, other than goodwill as noted below, are
consistent with those of the previous year.
Goodwill
Prior to 1 April 2000
Goodwill, consisting of the excess of the cost over the fair value of net
tangible assets of subsidiaries, joint ventures and associates at the date
of acquisition, is written off against income or, if available, non-
distributable reserves, unless legal authority is obtained to reduce share
premium by any excess. Where the net assets of a subsidiary or joint
venture at the date of acquisition exceed the cost of the shares acquired,
the excess is treated on consolidation as a non-distributable reserve. Such
goodwill or negative goodwill has not been adjusted for the change in
accounting policy noted below.
After 1 April 2000
Deficits or surpluses arising on the difference between the cost and the
fair value of net assets of subsidiaries, joint ventures and associates
acquired is accounted for as goodwill and amortised over a maximum period of
up to twenty years.
COMMENTS
INTRODUCTION
M-Net shares are linked to those of SuperSport International Holdings
Limited and trade as indivisible units on the JSE Securities Exchange South
Africa (JSE) and the Nigerian Stock Exchange.
RESULTS
M-Net's subscriber households now exceed 1,24 million, spread across 49
countries on the African continent and adjacent islands.
Revenues for the year amounted to just over R1,2 billion. Trading and
economic conditions for the year under review were difficult. In particular,
advertising revenues declined in the latter half of the financial year. The
advertising market is becoming increasingly more competitive with the
overall ad spend remaining static and the market becoming more fragmented as
a proliferation of new media opportunities become available to advertisers.
M-Net is vulnerable to a decline in the value of the rand, as has occurred
over the past financial year. To counteract this, digital and analogue
subscriptions were increased, while operating costs are controlled
vigorously.
Headline earnings amounted to R81,8 million, equivalent to headline earnings
per share of 28,9 cents - an increase of 22,5%. Capital expenditure of R37,1
million was incurred, mainly due to the upgrading of broadcast facilities.
Contributions to the fiscus in respect of the year under review will amount
to some R162,7 million. This includes the 2% levy payable by M-Net in terms
of its licence conditions, which amounted to R18 million for the past year.
DIVIDEND
It is M-Net's policy to declare a single dividend each financial year. In
the year under review a dividend of 18 cents per share was declared to
shareholders registered as such on 23 March 2001 and paid on 30 March 2001.
strate
M-Net/SuperSport linked units are scheduled to be converted to Share
Transactions Totally Electronic (STRATE), an electronic settlement platform
for share transactions on the JSE in August 2001. The move to STRATE will
ensure M-Net/SuperSport's participation in a sophisticated settlement
process in line with international best practice. Shareholders will receive
further communication in this regard in due course.
PROSPECTS AND DEVELOPMENTS
M-Net maintained its position as Africa's premier entertainment channel,
playing a major role in growing the DStv subscriber base across the
continent. The first quarter of 2001 saw the introduction of a new logo and
on-air image, which has significantly strengthened the presence of the M-Net
brand.
August 2000 saw the launch of the Eutelsat W4 satellite with a footprint
spanning the African continent from Senegal to Mauritius. Its Ku-band feed
allows the use of a smaller satellite dish, especially in West Africa, and
provides digital images of supreme quality. In the spirit of embracing the
African renaissance M-Net will continue to invest in the rest of Africa.
During the year under review particular emphasis was placed on marketing
initiatives, to be followed by targeted programming for West Africa. The
company is in an investment phase for this territory, which is expected to
be profitable in the medium term. M-Net has secured the rights to the
entertainment show Gladiators, which will be produced in Nigeria in the
third quarter of 2001. This will be M-Net's first production in Nigeria.
Channel O, M-Net's former free-to-air music channel, is entrenched as the
leading music channel on the African continent. To optimise its brand
presence Channel O has been exclusively available on DStv since April 2001.
During the year under review M-Net, including the Afrikaans-language channel
kykNet, launched a number of locally-produced programmes. Reality television
- a genre attracting record-breaking viewing figures - has proved to be a
hit on M-Net. In striving to spearhead innovative television in Africa, M-
Net secured the rights to produce a South African version of Big Brother.
The concept has been broadcast in 18 countries and has broken viewership
records in several of them.
M-Net will continue to evaluate opportunities for new channels in the year
ahead.
Passionate, motivated people are the core reason for M-Net's continued
success. World-class training and development programmes have been
implemented to ensure that
M-Net attracts and retains personnel of high calibre.
On behalf of the board
T Vosloo G Marques
Chairman Chief executive
20 June 2001
Directors T Vosloo (chairman), J P Bekker, D D B Band, I Charnley, J S
Craib, P Edwards (British), K D Moroka, S J Z Pacak, J D T Stofberg
Alternate directors
P M Jenkins, J R D Modise, S F Ward (British)
Company secretary
G Kisbey-Green
Transfer secretaries Registered office
Mercantile Registrars Limited 11 Grove Street
11 Diagonal Street RANDBURG 2125
JOHANNESBURG 2001 (PO Box 2963, Pinegowrie 2123)
(PO Box 1053, Johannesburg 2000) South Africa
South Africa
Registrars/transfer secretaries in Nigeria
City Securities Limited
5th Floor, Primrose Tower
17 Tinabu Street
LAGOS, Nigeria
(PO Box 9117, Lagos, Nigeria)
http//www.mnet.co.za
