| Thu 20 Jun 2002, 0:00 | | Electronic Media Network Limited - Group Audited R |
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Electronic Media Network Limited - Group audited results for the year ended
31 March 2002
M-Net
Electronic Media Network Limited
(Incorporated in the Republic of South Africa)
(Registration number 1985/002853/06)
JSE Share code: MNS ISIN: ZAE000014304
("M-Net" or "the company" or "the group")
PRELIMINARY REPORT
Group audited results for the year ended 31 March 2002 were as follows:
ABRIDGED INCOME STATEMENT
Year ended Year ended
31 March 31 March
2002 2001
(audited) (audited)
R`m R`m
Revenues 1 287 1 205
Cost of sales and provision of services (936) (881)
Gross profit 351 324
Operating costs (198) (195)
Operating profit 153 129
Finance income 5 2
Profit before taxation 158 131
Taxation (59) (49)
Net profit for the year 99 82
Earnings per share (cents)
- basic 37,0 30,5
- diluted 36,9 30,3
Headline earnings per share (cents)
- basic 37,0 30,5
- diluted 36,9 30,3
Dividend per share (cents) 21,5 18,0
ABRIDGED BALANCE SHEET
31 March 31 March
2002 2001
(audited) (audited)
R`m R`m
ASSETS
Non-current assets
Property, plant and equipment 121 136
Current assets 873 715
Cash resources 4 -
Total assets 998 851
EQUITY AND LIABILITIES
Capital and reserves 143 124
Non-current liabilities 198 168
Deferred tax 185 155
Accounts payable 13 13
Current liabilities 657 540
Net interest-bearing debt - 19
Total equity and liabilities 998 851
ABRIDGED CASH FLOW STATEMENT
Year ended Year ended
31 March 31 March
2002 2001
(audited) (audited)
R`m R`m
Cash generated from operating activities 146 135
Finance income 5 2
Taxation paid (36) (16)
Net dividend paid (55) (51)
Foreign currency translation reserve 9 -
Cash flow from operations 69 70
Utilised for:
Fixed assets (13) (37)
Share buy-backs (34) 1
Investments and loans - (3)
Net cash flow 22 31
Net interest-bearing debt at
beginning of year (18) (49)
Cash resources/
(net interest-bearing debt) at
end of year 4 (18)
STATEMENT OF CHANGES IN EQUITY
Share Foreign
capital and currency
share Retained translation
premium earnings reserves Total
R`m R`m R`m R`m
Balance as at 1 April 2000 161 (23) - 138
Change in accounting policy in
respect of share trusts (45) - - (45)
Balance as restated 116 (23) - 93
Treasury shares adjustment 1 (1) - -
Net profit for the year - 82 - 82
Dividend paid - (51) - (51)
Balance as at 31 March 2001 117 7 - 124
Share acquisition and
cancellation (33) - - (33)
Acquisition of shares held
as treasury shares (1) - - (1)
Foreign currency translation
reserve - - 9 9
Net profit for the year - 99 - 99
Dividend paid - (55) - (55)
Balance as at 31 March 2002 83 51 9 143
SUPPLEMENTARY INFORMATION
Year ended Year ended
31 March 31 March
2002 2001
(audited) (audited)
R`m R`m
Included in operating profit:
Depreciation for the year 26 22
Finance income 5 2
Interest received 11 9
Interest paid (6) (7)
Capital expenditure for the year 13 37
Capital expenditure committed or
authorised 8 11
Programme and film rights commitments 575 651
Number of ordinary shares in issue
(million) 268 282
Net asset value per share (cents) 86,2 43,9
NOTES:
1. Accounting policies
These consolidated condensed preliminary financial statements are
prepared on the historical cost basis and comply with South African
Statements of Generally Accepted Accounting Practice.
The accounting policies used in the preparation of the preliminary
financial statements are consistent with those used in the annual financial
statements for the year ended 31 March 2001, except for the accounting
treatment of share trusts.
In prior years the loans to the company`s share trust as well as loan
accounts for other affiliated share trusts in the group were accounted for
as investments.
In terms of the new policy the company`s share trust has been
consolidated, giving rise to treasury shares that have been accounted for as
a deduction against equity. Other affiliated share trust loans have been
offset against the corresponding affiliated company loan accounts. These
adjustments have been made for the current year with the prior-year figures
being restated as at 1 April 2000.
2. Share repurchases
On 16 October 2001 and 20 November 2001 the company acquired 650 000 and
14 226 724 of its own shares for R1 495 800 and R32 863 731, respectively,
which has been deducted from shareholders` equity. The 650 000 shares are
held as treasury shares and the 14 226 724 shares were cancelled. The
repurchase price per share was split in the ratio 58:42 between SuperSport
and M-Net, respectively.
3. Segmental information
M-Net is involved in the acquisition, packaging, scheduling and
broadcasting of general entertainment-related programming and advertising
activities. The company has no separable operations from a geographical
viewpoint. Although it broadcasts outside South Africa, its operations are
conducted in South Africa.
INTRODUCTION
M-Net shares are linked to those of SuperSport International Holdings
Limited (SuperSport) and trade as indivisible units on the JSE Securities
Exchange South Africa and on the Nigerian Stock Exchange.
RESULTS
M-Net continued to perform moderately well, despite extremely challenging
economic and media environments. This was largely the result of management`s
focus on cost reductions and the restructuring of operations to ensure
optimum efficiencies.
Revenues from subscriptions and airtime sales amounted to R1,29 billion,
an increase of only 6,7% compared with the previous year.
Headline earnings for the year amounted to some R99 million - an increase
of 21% on the previous year.
In a difficult year, the subscriber base remained relatively stable. The
effect of this was to some extent ameliorated by subscribers upgrading from
the analogue to the digital service, on which margins are better, as well as
some growth in subscription sales on the rest of the continent outside South
Africa.
In keeping with worldwide trends in media, advertising revenues declined.
They were also affected by the fragmentation of the market caused by
subscribers moving from the analogue service to the digital bouquet, as well
as increased competition.
In response to these pressures, costs were reduced by several measures,
some of which were painful. Headcount dropped by 17% and all business units
are now operating more cost-effectively on leaner structures.
The company remains cautiously optimistic regarding the potential of its
expanding presence in the rest of Africa, where pay-television markets are
still young.
Various initiatives to reduce the effects of a weakening South African
rand have been taken. Agreements have been re-negotiated with suppliers,
linked to currency devaluation clauses where possible and hedged where
appropriate. However, currency devaluation remains a risk.
Contributions to the fiscus in respect of the year under review will
amount to some R192 million. This includes the 2% levy payable by M-Net in
terms of its licence conditions and which amounted to R15 million for the
past year.
DIVIDEND
It is M-Net`s policy to declare a single dividend each financial year.
For the past year a dividend of 21,5 cents per share was declared to
shareholders registered as such on 22 March 2002 and paid on 25 March 2002.
REGULATORY
The company submitted an application for the renewal of its licence on
5 December 2001 to the Independent Communications Authority of SA (Icasa),
within the timeframe provided for in the Independent Broadcast Authority Act
of 1993. It is expected that the process will be completed soon.
M-Net participated fully in Icasa`s review of local-content quotas. For
M-Net, these have been increased from 6% to 8% in encoded time and from 20%
to 35% in the Open Time slot. The implementation date of the new quotas is
August 2003. Management believes that the company has adequate time to
prepare for the increased quotas.
M-Net has also agreed to help fund the Media Development and Diversity
Agency with a figure of R0,4 million.
PROSPECTS AND DEVELOPMENTS
We expect the macro-economic environment and the media industry to remain
depressed and subscriber numbers in South Africa not to grow. However, the
company aims to achieve growth in the subscriber base in the rest of Africa
- particularly in West Africa.
Advertising revenues are expected to remain under pressure.
Against this background, M-Net will continue to provide world-class
entertainment on its 13 channels. This will include the best high-impact
reality shows such as Big Brother and Idols, which also provide multimedia
opportunities and build subscriber loyalty. Long-term deals with Hollywood
studios and local suppliers, amongst others, will ensure that M-Net provides
viewers with top-class entertainment.
M-Net also continues to invest in the development of skills and training
in its endeavour to attract the best people in the industry. The board would
like to recognise the contribution made by all our people across the
continent who strive on a daily basis to attain our mission: to create the
best television entertainment in Africa and beyond.
On behalf of the board
Khulu Sibiya Glen P Marques
Chairman Chief executive
19 June 2002
Directors: KB Sibiya (chairman), JP Bekker, DDB Band, JS Craib, KD Moroka,
SJZ Pacak, HR Enslin, PM Jenkins, GP Marques (chief executive),
JRD Modise, ACG Molusi, VB Mona, CJ Sidego, JJ Volkwyn, T Vosloo
Alternate directors: SF Ward (British), I Charnley
Company secretary: Kisbey-Green
Transfer secretaries:
Computershare Investor Services Limited
11 Diagonal Street
Johannesburg 2001
(PO Box 1053, Johannesburg 2000)
South Africa
Registered office:
11 Grove Street
Randburg 2194
(PO Box 2963, Pinegowrie 2123)
South Africa
Registrars/transfer secretaries in Nigeria:
City Securities Limited
5th Floor, Primrose Tower
17A Tinabu Street
Lagos, Nigeria
(PO Box 9117, Lagos, Nigeria)
www.mnet.co.za
Date: 20/06/2002 07:40:12 AM Produced by the SENS Department
