| Tue 4 Mar 2003, 12:18 | | Kagiso Media - Interim Results and dividend declar |
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KAGISO MEDIA LIMITED
(Registration number 1957/000036/06)
("Kagiso Media" or "the company")
Share code: KGM
ISIN: ZAE000014007
Kagiso Media Limited Interim Results
and dividend declaration for the six months ended 31 December 2002
- Headline eps up 72%
- Distribution of 60 cents per share
- Dividend policy statement
Condensed Consolidated Income Statement
6 months ended 12 months ended
31 December 31 December 30 June
2002 2001 Change 2002
(R`000) (Unaudited) (Unaudited) % (Audited)
Revenue 141 067 106 221 33 222 405
Profit before interest, 55 531 35 994 54 70 665
taxation, depreciation and
amortisation
Depreciation and (2 403) (2 207) (5 432)
amortisation
Interest received 5 212 2 112 4 085
Profit before tax 58 340 35 899 63 69 318
Taxation (17 113) (15 150) (23 711)
Net profit after taxation 41 227 20 749 99 45 607
Share of associated 9 505 8 140 17 14 441
companies` earnings
Attributable to outside (1 758) (1 644) (3 067)
shareholders
Earnings attributable to 48 974 27 245 80 56 981
shareholders
RECONCILIATION OF HEADLINE
EARNINGS
Earnings attributable to 48 974 27 245 80 56 981
shareholders
Amortisation of goodwill 484 653 969
Impairment of goodwill - - 1 984
Profit on closure of - - (2 099)
discontinuing operation
Costs incurred in - 620 1 162
negotiating the disposal of
the group`s assets
Profit on sale of - - (5 154)
subsidiary
Headline earnings 49 458 28 518 72 53 843
EARNINGS PER SHARE
Headline earnings per share 38,5 22,3 72 42,1
(cents)
Earnings per share - basic 38,1 21,3 79 44,5
(cents)
- diluted 37,7 22,1 71 44,2
(cents)
Number of shares in issue 128 556 127 692 128 556
(`000s)
Weighted average number of 128 556 127 692 128 874
shares in issue (`000s)
Condensed Consolidated Balance Sheet
31 December 31 December 30 June
2002 2001 2002
(R`000) (Unaudited) (Unaudited) (Audited)
ASSETS
Non-current assets 56 031 73 805 61 087
- Property, plant and 15 612 13 148 14 134
equipment
- Intangible assets 2 996 7 267 5 139
- Investments in associates 17 330 26 309 19 923
- Non-current receivables 4 395 3 997 2 606
- Deferred tax 15 698 23 084 19 285
Current assets 175 340 116 570 150 422
- Inventory 5 122 6 107 7 720
- Deferred expenditure 2 137 5 982 7 368
- Accounts receivable 56 283 56 678 62 271
- Cash and cash equivalents 111 798 47 803 73 063
Total Assets 231 371 190 375 211 509
EQUITY AND LIABILITIES
Shareholders` interest 181 120 126 907 132 147
Minority interest 4 395 3 187 3 127
Total shareholders` funds 185 515 130 094 135 274
Current liabilities 45 856 60 281 76 235
- Deferred revenue 3 883 9 796 33 289
- Accounts payable 30 893 29 189 31 480
- Taxation 10 966 13 973 8 818
- Current portion of - 5 692 -
borrowings
- Amounts due to vendors - 1 313 -
- Amounts due to 114 58 125
shareholders
- Bank overdraft - 260 2 523
Total Equity and Liabilities 231 371 190 375 211 509
Net tangible asset value per 138,6 93,7 99,0
share (cents)
Condensed Consolidated Cash Flow Statement
6 months ended 12 months
ended
31 December 31 December 30 June
2002 2001 2002
(R`000) (Unaudited) (Unaudited) (Audited)
Cash retained from
operations
Cash generated by operating 55 519 30 955 67 666
activities
(Increase)/decrease in (16 176) (10 914) 2 552
working capital
Cash generated by operations 39 343 20 041 70 218
Interest received 5 212 2 136 4 085
Taxation paid (11 378) (9 035) (20 136)
Dividend received 12 098 332 6 630
Dividend paid to group - - (25 672)
shareholders
Dividend paid to minorities (490) (2 291) (3 774)
Net cash inflow from 44 785 11 183 31 351
operating activities
Cash utilised by investment (1 738) (3 702) (4 084)
activities
Investment to maintain (1 738) (3 702) 10 103
operations
Investment to expand - - (14 091)
operations
Cash disposed of in - - (96)
subsidiary
Cash effect of financing (4 312) (28 537) (23 063)
activities
Increase/(decrease) in loan (1 789) - 2 021
receivable
Increase/(decrease) in bank (2 523) (445) 2 661
overdrafts
Decrease in borrowings - - (895)
Share premium reduction - (28 092) (28 065)
Proceeds from issue of new - - 1 215
shares
Net increase/(decrease) in 38 735 (21 056) 4 204
cash and cash equivalents
Cash and cash equivalents at 73 063 68 859 68 859
beginning of the period
Cash and cash equivalents at 111 798 47 803 73 063
end of the period
Condensed Consolidated Statement of Changes in Shareholders` Interest
6 months ended 12 months
ended
31 December 31 December 30 June
2002 2001 2002
(R`000) (Unaudited) (Unaudited) (Audited)
Shareholders`interest at the 132 147 127 753 127 753
beginning of the period
Changes in share capital - (28 092) (26 876)
- New shares issued - - 1 216
- Return of share premium to - (28 092) (28 092)
shareholders
Retained income for the 48 974 27 245 56 981
period
Dividend paid - - (25 711)
Shareholders`interest at the 181 120 126 906 132 147
end of the period
Segmental Analysis for the six months ended 31 December
Turnover EBITDA Headline earnings
(R`000) 2002 2001 2002 2001 2002 2001
Head office - - (1 985) (2 177) (227) (2 106)
Broadcasting 53 281 44 416 28 986 23 820 28 676 21 868
Specialist 35 360 37 132 12 461 10 777 8 569 6 328
Publishing
Exhibitions 49 860 20 474 13 900 2 275 10 154 1 974
Strategic 2 566 4 199 2 169 1 299 2 286 454
Marketing
Total 141 067 106 221 55 531 35 994 49 458 28 518
1. Comments on resultsKagiso Media is delighted to announce record results for
the six months to 31 December 2002. The period under review represents the six
months during which the company recorded the highest turnover, EBITDA and profit
after tax, and generated the highest free cash flow, since the company was
listed in 1997. The headline earnings per share of 38,5 cents after six months
is already within 10% of the total headline earnings per share recorded for the
full year to 30 June 2002.
Revenue increased by 33% over the comparative six months, driven by strong
increases in revenue at all the group`s operations. East Coast Radio increased
revenue 20%, Butterworths 19% and Exhibitions 144%. In the period under review
Kagiso Exhibitions staged Auto Africa and managed Africa Aerospace and Defence,
two significant bi-ennial exhibitions, and performed once-off services for the
World Summit on Sustainable Development ("WSSD"). In the comparative period
revenue included R7,4m from Systems Publishers, which does not form part of the
group`s results in 2003, as this company was disposed of on 26 June 2002.
Earnings before interest, tax, depreciation and amortisation ("EBITDA")
increased by 54% over the comparative period. The overall EBITDA margin improved
from 34% in 2001 to 39% for the six months to 31 December 2002. East Coast Radio
increased its EBITDA margin slightly to 54% during the six months, Butterworths
maintained a margin of 35% and Exhibitions improved its EBITDA margin from 11%
in 2001 to 28% in the six months under review. The overall EBITDA margin in the
comparative period was also adversely impacted by the trading losses of Systems
Publishers.
During the period under review the group earned more than R5m (2001 - R2m) in
interest on its surplus cash, which at 31 December 2002 amounted to almost
R112m. The group also had no debt, whereas in 2001 it serviced the interest on
the R5,7m loan facility of Systems Publishers.
The effective tax rate decreased from 42% in 2001 to 29% in the six months under
review. This was mostly due to differences in the timing of dividends received
from subsidiaries and associates and therefore the quantum of STC included in
the tax charge.
Income from associates (Jacaranda 94.2, OFM and RadMark) increased by 17%,
driven by the strong revenue performances of the group`s associated companies.
Jacaranda increased revenue by 24% in a very competitive market, OFM by 22% and
RadMark by 28%. EBITDA margins at Jacaranda increased from 43% to 47% and at
RadMark from 31% to 32% against the comparative six months in 2001.
2. REGULATORY MATTERSThe broadcast licences of East Coast Radio and OFM were
renewed by the Independent Communications Authority of South Africa ("ICASA")
for a further period of six years. We are still awaiting the exact terms and
conditions of these licences from ICASA. The licence of Jacaranda 94.2 is due
for renewal later this year.
ICASA is at present engaged in a review of regulations governing the ownership
of private broadcast licences. Kagiso Media, like numerous other interested
parties, made a submission to the enquiry, advocating the relaxation of current
ownership limitations. We applaud this initiative and look forward to a review
of broadcast legislation by 2004 that will invigorate our sector.
3. ACCOUNTING POLICIESThe summarised unaudited results for the six months ended
31 December 2002 have been prepared using accounting policies which are in
accordance with Generally Accepted Accounting Practice and Schedule 4 of the
Companies Act and are consistent with those adopted in the annual financial
statements for the year ended 30 June 2002 and the summarised unaudited results
for the six months ended 31 December 2001.
4. COMPARATIVE FIGURESThe comparative unaudited figures in the income statement
for the six months ended 31 December 2001 have been restated to take account of
changes in presentation in the six months under review.
5. SEASONALITYThe first six months of the financial year normally represents the
peak trading period for radio broadcasting, the group`s major business division.
The group`s broadcasting assets performed exceptionally well during the past six
months, and Kagiso Exhibitions staged Auto Africa and managed Africa Aerospace
and Defence, two substantial bi-ennial exhibitions (last staged in the 2001
financial year), and rendered once-off conference-related services to the WSSD.
The interim dividend (declared in 6.2 below) would further have the effect of a
substantial STC charge in the remaining six months of the financial year.
Consequently the group expects a pronounced seasonality in the relative earnings
of the two six month trading periods in the 2003 financial year.
6. DIVIDEND6.1. Dividend PolicyThe board has approved a dividend policy for the
company that will ensure that, in the absence of investment opportunities, at
least 50% of attributable profits be regularly returned to shareholders. The
board also considered the constraints of the current regulatory environment and
the working capital and other requirements of the group, and deems the level of
cover appropriate under the current circumstances.
6.2. Interim and special dividend declarationGiven the newly adopted dividend
cover policy, the board resolved to declare an interim dividend of 20 cents per
share, and a special dividend of 40 cents per share in recognition of the fact
that no final dividend was declared in the previous financial year ("the
distribution").
Notice is hereby given that a distribution of 60 cents per share has been
declared payable to shareholders of ordinary shares recorded in the register of
the company on Friday, 28 March 2003, the record date. The last date to trade
cum-distribution will therefore be Thursday, 20 March 2003 and Kagiso Media
shares will trade ex-distribution from Monday, 24 March 2003. Payment of the
distribution will be made on Monday, 31 March 2003. Share certificates may not
be dematerialised or rematerialised between Monday, 24 March 2003 and Friday, 28
March 2003, both days inclusive.
In terms of the Companies Act, the directors confirm that, after the payment of
the above distribution, 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.
7. PROSPECTSWe are confident that our assets will continue to outperform the
market over the remainder of the financial year, given their positioning in the
very robust sectors of their respective markets.
It is again brought to shareholders` attention that, although the earnings for
the six months to 31 December 2002 increased substantially over that of the
comparative period, an acute seasonality is expected in the results for the full
year to 30 June 2003.On behalf of the BoardE Molobi
W R JardineChairman Chief Executive
4 March 2003
Registered Office: 2nd Floor Kagiso House, 1/3 Mellis Road, Rivonia, 2128.
Transfer Secretaries: Computershare Investor Services Limited, 70 Marshall
Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
Directorate: E Molobi (Chairman), MJN Njeke, R Jardine* (Chief Executive), PHP
Jacobs*(Finance), H Appelbaum, AC Ball, RL Hiemstra,
WJ Last, YI Mahomed, BL MacRobert, S Pragjee, A Singh, N Sowazi.
* Executive
Date: 04/03/2003 12:00:01 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
