| Wed 17 Sep 2003, 14:37 | | Audited Results For The Year Ended 30 June 2003 In |
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Kagiso Media -
Dividend Declaration And Further Cautionary Announcement
KAGISO MEDIA LIMITED
(Registration number 1957/000036/06)
("Kagiso Media" or "the company")
Share code: KGM
ISIN: ZAE000014007
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2003 INCLUDING FINAL DIVIDEND
DECLARATION AND FURTHER CAUTIONARY ANNOUNCEMENT- Revenue up 18%- EBIDTA up 28%-
Headline earnings per share 38%- Final dividend of 20 cents per shareCONDENSED
CONSOLIDATED BALANCE SHEET AS AT
30 June 2003 30 June 2002
(Audited) (Audited)
(R"000) (R"000)
ASSETS
Non current assets 54 546 61 087
- Property, plant and equipment 12 940 14 134
- Intangible assets 6 009 5 139
- Investment in associates 19 274 19 923
- Loan receivable - 2 606
- Deferred expenditure 898 -
- Deferred tax 15 425 19 285
Current assets 149 255 150 421
- Inventory 6 577 7 719
- Accounts receivable 64 231 62 271
- Deferred expenses 4 547 7 368
- Taxation 256 -
- Cash and cash equivalents 73 644 73 063
Total assets 203 801 211 508
EQUITY AND LIABILITIES
Shareholders" equity 120 668 132 147
Minority interest 4 670 3 126
Total shareholders" funds 125 338 135 273
Current liabilities 78 463 76 235
- Accounts payable 35 212 29 563
- Provisions 1 483 1 917
- Other current payables 5 453 -
- Taxation 7 311 8 818
- Deferred revenue 28 834 33 289
- Amounts due to shareholders 170 125
- Bank overdraft - 2 523
Total equity and liabilities 203 801 211 508
Tangible net asset value per share 89 99
(cents)
CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED
30 June 2003 30 June 2002
(Audited) (Audited) Change
(R"000) (R"000) %
Revenue 261 878 222 405 17,8
Profit before interest, taxation, 90 275 70 665 27,8
depreciation and amortisation
Depreciation and amortisation (4 725) (5 432)
Interest received 10 851 4 085
Profit before tax 96 401 69 318 39,1
Taxation (37 265) (23 711) (57,2)
Net profit after taxation 59 136 45 607 29,7
Share of associated companies" 17 304 14 441 19,8
earnings
Attributable to outside (2 572) (3 067) 16,1
shareholders
Earnings attributable to 73 868 56 981 29,6
shareholders
RECONCILIATION OF HEADLINE EARNINGS
Earnings attributable to 73 868 56 981 29,6
shareholders
Amortisation of goodwill 969 969
Profit on sale of subsidiary - (5 154)
Impairment of goodwill - 1 984
Profit on closure of discontinuing - (2 099)
operation
Costs incurred in negotiating the - 1 162
disposal of the group"s assets
Headline earnings 74 837 53 843 39,0
EARNINGS PER SHARE
Headline earnings per share (cents) 58,1 42,1 38,1
Earnings per share (cents) 57,4 44,5 29,0
Fully diluted earnings per share 56,9 44,2 28,7
(cents)
Number of shares in issue (`000s) 129 244 128 556 0,5
Weighted average number of shares 128 752 127 948 0,6
in issue (`000s)
CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED
30 June 2003 30 June 2002
(Audited) (Audited)
(R"000) (R"000)
Cash retained from operations
Cash generated by operating activities 90 178 67 666
Decrease in working capital 7 319 2 552
Cash generated by operations 97 497 70 218
Interest received 10 851 4 085
Taxation paid (35 169) (20 136)
Dividend received from associates 16 231 6 630
Dividends paid (78 530) (29 446)
Net cash inflow from operating 10 880 31 351
activities
Cash utilised in investment activities (11 809) (4 084)
Investment to maintain operations (7 270) 10 103
Investment to expand operations (4 539) (14 091)
Cash disposed of in subsidiary - (96)
Cash effect of financing activities 1 510 (23 063)
(Decrease)/increase in bank overdrafts (2 523) 2 661
Decrease in loan receivable 2 606 2 021
Decrease in borrowings - (895)
Proceeds from issue of new shares 1 427 1 215
Share premium reduction - (28 065)
Increase in cash and cash equivalents 581 4 204
Cash and cash equivalents at beginning 73 063 68 859
of year
Cash and cash equivalents at end of year 73 644 73 063
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
30 June 2003 30 June 2002
(Audited) (Audited)
(R"000) (R"000)
Equity at the beginning of the year 132 147 127 754
Changes in share capital 1 427 (26 877)
- New shares issued 1 427 1 215
- Share premium reduction - (28 092)
Treasury shares adjustment(1) (9 227) -
Retained income for the year 73 868 56 981
Dividend paid (77 547) (25 711)
Equity at the end of the year 120 668 132 147
Note
1. In respect of additional 6,9% of the shares acquired in East Coast Radio
SEGMENTAL ANALYSIS FOR THE YEAR ENDED 30 JUNE
(R"000) Revenue Profit before tax Headline
earnings(2)
2003 2002 2003 2002 2003 2002
Head office - - (3 999) (1 662) (14 632) (10 134)
Broadcasting 100 350 83 169 52 055 43 574 54 202 44 533
Specialist 74 636 77 734 24 646 20 467 17 249 13 898
Publishing(1)
Exhibitions 81 760 51 419 19 601 87 13 964 2 041
Strategic 5 132 10 083 4 098 6 852 4 054 3 505
Marketing
Total 261 878 222 405 96 401 69 318 74 837 53 843
Notes1. The Specialist Publishing division comprises Butterworth Publishers
(2002 - Butterworths and Systems Publishers).2. Secondary Tax on Companies is
allocated to Head-office.
NOTES1. COMMENTS ON RESULTSIn the year to 30 June 2003 Kagiso Media recorded a
38,1% increase in headline earnings per share and headline earnings increased by
39% to R74,8m. This result brings the compounded annual growth rate in headline
earnings per share to 22% over the past five years and the return on equity to
58% for the year under review.
Revenue increased by 17,8% to R262m. The infrequent events staged by Kagiso
Exhibitions contributed revenue of R22m for the year. In the comparative period
revenue included R13,7m from Systems Publishers, which does not form part of the
group"s results in 2003, as this subsidiary was disposed of at the end of the
previous financial year.
Earnings before Interest, Tax, Depreciation and Amortisation ("EBITDA")
increased by 27,8% to R92m for the year. The overall EBITDA margin improved from
31,8% in 2002 to 34,5%. This improvement can be ascribed mainly to the
performance of Kagiso Exhibitions, which recorded an EBITDA margin of 22,5% in
the period under review, against 3,8% in the comparative period. East Coast
Radio recorded an EBITDA margin of 51,4% (2002 - 52,6%), Butterworth Publishers
33,6% (35,5%) and the Strategic Marketing business 69,3% (66,7%).
The quality of the group"s earnings and cash flow is reflected in the fact that
the group earned more than R10,8m in interest on its surplus cash generated
during the period under review (2002 - R4,1m), despite paying R77,5m as an
interim dividend in April 2003. The group also had no debt in the year to 30
June 2003, whereas in the prior year it paid interest of R0,8m on the loan
facility of Systems Publishers.
The effective tax rate increased from 34,2% in 2002 to 38,7% in the year under
review, as a result of the very high dividend paid in the period under review,
which attracted STC of R8,1m (2002 - R3,4m).
Income from associates (Jacaranda 94.2, Ofm and RadMark) increased by 19,8%,
driven by strong revenue performances at these companies.
The contribution of each division to revenue, profit before tax and headline
earnings is set out in the Segmental Analysis.
2. REVIEW OF OPERATIONSBroadcastingThe group"s broadcasting assets performed
well compared to the general radio market. Overall, net radio revenue in South
Africa reportedly grew by 18,8% over this period, while East Coast Radio
increased revenue 21%, Jacaranda 22% and Ofm 23%. RadMark increased its revenue
by 25% and currently has a 25% share of the South African radio advertising
market. Our radio stations reported above average growth in advertising revenue
as a result of the recent growth of 9% in audience at East Coast Radio, 21% at
Jacaranda and 10% at Ofm. On the back of this revenue performance, the
broadcasting division increased its contribution to headline earnings by 22% to
R54,2m in the period under review.
EBITDA margins at Jacaranda improved to 43,2% from 41,6% and at RadMark to 30,6%
from 29,6%, while Ofm maintained its EBITDA margin at 30,1%.
Specialist publishingButterworth Publishers increased revenue by 16% in the
period under review. The company increased its contribution to headline earnings
by 13% to R17,2m, making this its ninth consecutive year of double digit growth.
ExhibitionsKagiso Exhibitions increased revenue by 59% and its contribution to
headline earnings from R2m in 2002 to R13,9m in the year under review. This was
made possible by Auto Africa and Africa Aerospace and Defence, two significant
bi-ennial exhibitions, the services rendered for the World Summit on Sustainable
Development and the fact that SAITEX and the Rand Show, the company"s two other
major annual exhibitions, performed well ahead of budget.
Strategic marketingThis business delivers project management services to the
prestigious "Brand SA" tender. In the year under review work under the tender
progressed well and culminated in a 120 seconds television advertisement for the
"Alive with possibility" campaign. This division contributed R4,1m to headline
earnings in the year to 30 June 2003 (2002 - R3,5m).
3. ACCOUNTING POLICIESThe summarised audited results for the year to 30 June
2003 have been prepared using accounting policies which are in accordance with
the historical cost basis, in conformity with Generally Accepted Accounting
Practice in South Africa and consistent with those adopted in the prior year.
4. AUDITORS" REPORTPricewaterhouseCoopers Inc. has audited the Group annual
financial statements. Their unqualified audit report is available for inspection
at the Company"s registered office.
5. ANNUAL FINANCIAL STATEMENTSThe annual financial statements for the year to 30
June 2003, including a notice to the annual general meeting, will be posted to
shareholders by no later than 31 October 2003.
6. DIVIDENDThe Board decided to retain a healthy cash balance in the Company, as
it contemplated the possibility that the Company may shortly have to follow its
pre-emptive rights in respect of Jacaranda and RadMark following the
announcement by New Africa Investments Limited that it is disposing of its
assets. Consequently it was resolved to declare a final dividend of 20 cents per
share in respect of the year to 30 June 2003, in addition to the 60 cents
interim dividend paid on 1 April 2003.
Notice is hereby given that a dividend of 20 cents per share has been declared
payable to holders of ordinary shares recorded in the register of the Company on
Friday, 10 October 2003, the record date. The last date to trade cum-dividend
will therefore be Friday, 3 October 2003 and Kagiso Media shares will trade ex-
dividend from Monday, 6 October 2003. Payment of the dividend will be made on
Monday, 13 October 2003. Share certificates may not be dematerialised or
rematerialised between Monday, 6 October 2003 and Friday, 10 October 2003, 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.
7. PROSPECTSKagiso Media again expects a strong performance from its
broadcasting and publishing assets in the coming year. The long-awaited release
of the Independent Communications Authority of South Africa"s ("ICASA") review
of the ownership of broadcast licences could lead to new opportunities for
growth in this sector. The results of the exhibitions business will reflect the
fact that the company, in the next financial year, will not be staging its bi-
ennial exhibitions or repeat the once-off business it secured in 2003.
8. FURTHER CAUTIONARY ANNOUNCEMENTFurther to the joint announcement by the
Company, Caxton and CTP Publishers and Printers Limited and Johnnic
Communications Limited, dated 10 September 2003, shareholders are advised that
Kagiso Media is involved in negotiations with New Africa Investments Limited,
the outcome of which may have a material effect on the share price of the
Company. Accordingly shareholders are advised to continue to exercise caution in
their dealings in the Company"s shares.
On behalf of the Board
E Molobi W R Jardine
Chairman Chief Executive
17 September 2003Registered Office: 2nd Floor Kagiso House, 1/3 Mellis Road, PO
Box 5459, Rivonia, 2128
Transfer Secretaries: Computershare Limited, 70 Marshall Street, Johannesburg,
2001, PO Box 61051, Marshalltown, 2107
Sponsor: Investec Securities Limited, 100 Grayston Drive, Sandton, P O Box
785700, Sandton, 2146
Directors: E Molobi (Chairman), MJN Njeke (Deputy Chairman), WR Jardine (Chief
Executive), PHP Jacobs (Financial), H Appelbaum, RL Hiemstra, WJ Last , YI
Mahomed, S Pragjee, A Singh
Date: 17/09/2003 02:02:59 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
