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NEW CEO FOR MONEYWEB - PRESS RELEASE MONEYWEB HOLDINGS LIMITED ISIN code: ZA E000025409 Share code: MNY PRESS RELEASE 31 October 2002 New CEO for Moneyweb Edwin Jay (43), founder and senior partner of prominent Johannesburg-based law firm Jay Inc, is to leave the legal profession to become chief executive of Moneyweb Holdings on 1 January 2003. Jay, who founded the 60-person law firm in 1994, has been a non-executive member of the Moneyweb board since November 9, 2000. His appointment as CEO is announced in the company`s financial results for the half year to September, released today. Founder Alec Hogg (43) will become Moneyweb`s chairman, relinquishing day-to-day management responsibilities to focus on content. Hogg says: "As a board we appreciate that having only one non-executive director and an executive chairman puts us at the wrong end of King`s recommendations on Corporate Governance. But while we agree with the principles in King II, affordability is a greater priority right now. Implementing the size and type of board King II desires is not a financial option at present." Interim results for the 2003 financial year disclose that Moneyweb slumped to a loss in the first quarter, but recovered strongly in the three months between July and September. The company ended the half year with a modest profit, but with headline earnings down 81% on the comparable period a year ago. Cash earnings per share for the six months to end September slumped from 2.3c to 0.7c with headline earnings per share falling even more sharply, down from 1.6c to 0.3c. The results are consistent with the warning in Moneyweb`s 2002 annual report that headline earnings in the first half of the new financial year would be significantly below those of the previous financial year as "conditions in the media sector are widely quoted as being the worst in living memory...Moneyweb cannot escape the short-term impact." Commentary accompanying the results points out that the company posted a pre-tax loss of R506 000 during the first three months (April to June) but recovered well to a R785 000 pre-tax profit in the second quarter. The first quarter`s operating losses were exacerbated by a burglary of computer equipment and servers in June. As the company self-insures, the R124 000 book value of the equipment has been written off. Outgoing CEO Hogg notes: "Even during the height of the Internet mania when most participants believed the bigger the losses the better your prospects, we focused on running a profitable operation. So it was new territory for us when the advertising market turned down sharply in the first quarter, driving us losses for the first time in the company`s five year history. With hindsight, we made the right decision by gritting our collective teeth and working through it without retrenching staff or surrendering hard-won market share." Hogg says the company is well positioned for the second half of the financial year, with the heavy investment in the world leading mining website Mineweb.com starting to pay off: "After three years of building the mining-information side of the business internationally, we are now generating decent hard currency income. We`re confident that Mineweb will at the very least break-even this financial year. Advertising revenue has recovered well at both Moneyweb.co.za - which has entrenched its leadership among South African investment websites - and our radio programme Classic Business. This gives us confidence that earnings for the second half of the financial year will surpass those of the first half." Highlight of the reporting period was the continued earnings momentum at Classic FM, the radio station in which Moneyweb acquired 19.6% two years ago. Helped by Moneyweb`s intervention, the radio station recovered from heavy losses in its first four years to a profit of R890 000 in the 12 months to March 2002. Profits surged to R1.8m in the six months to end September, with Moneyweb`s equity accounted share jumping to R352 000 from R101 000 in the same period a year ago. Classic FM achieved a new milestone in October with revenue surpassing R2m for the first time, four times the average monthly sales at the time when Moneyweb became involved. Not surprisingly, Moneyweb says in the results that it is now "actively pursuing opportunities in the broadcast media field." Date: 31/10/2002 01:26:00 PM Produced by the JSE SENS Department
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