| Thu 20 Nov 2003, 17:28 | | INTERIM REPORT AND WITHDRAWAL OF |
|
SUPERSPORT INTERNATIONAL HOLDINGS LIMITED -
SuperSport International Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/004203/06)
Share code MNS ISIN ZAE000014304
("SuperSport" or "company" or "the group")
INTERIM REPORT AND WITHDRAWAL OF CAUTIONARY
GROUP REVIEWED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003.
ABRIDGED INCOME STATEMENT
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2003 2002 2003
(Reviewed) (Reviewed) (Audited)
R"million R"million R"million
Revenues 453 476 961
Cost of sales and provision of
services (295) (377) (715)
Gross profit 158 99 246
Operating costs (62) (48) (159)
Operating profit 96 51 87
Net finance (costs)/income (93) 8 21
Impairment of listed investments - (176) (123)
Fair value gain on listed investment 5 - -
Share of results of associates 2 - 2
Profit/(loss) before taxation 10 (117) (13)
Taxation (3) (18) (33)
Net profit/(loss) for the period 7 (135) (46)
Earnings/(loss) per share (cents)
- basic 2,98 (53,4) (18,4)
- diluted 2,94 (53,0) (18,4)
Headline earnings per share (cents)
- basic 2,98 17,2 34,8
- diluted 2,94 17,0 34,4
abridged balance sheet
30 September 30 September 31 March
2003 2002 2003
(Reviewed) (Reviewed) (Audited)
R"million R"million R"million
ASSETS
Non-current assets
Intangible assets 12 - 12
Property, plant and equipment 20 29 21
Investments and loans 67 268 62
Derivative assets 110 - -
209 297 95
Current assets 440 345 494
Net cash 72 55 46
Total assets 721 697 635
EQUITY AND LIABILITIES
Capital and reserves 64 398 174
Non-current liabilities
Foreign exchange contracts 191 - -
Deferred taxation 3 62 80
Current liabilities
Accounts payable 261 237 381
Foreign exchange contracts 202 - -
Total equity and liabilities 721 697 635
abridged CASH FLOW STATEMENT
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2003 2002 2003
(Reviewed) (Reviewed) (Audited)
R"million R"million R"million
Cash generated from
operating activities 26 23 84
Finance income 7 8 21
Taxation paid (8) (12) (27)
Net dividend paid - - (15)
Cash flow from operations 25 19 63
Utilised for: Property, plant and
equipment (1) - (6)
Intangible assets - - (3)
Treasury shares sold 4 - (8)
Cash distribution
to shareholders - - (35)
Investments (2) - (1)
Net cash inflow 26 19 10
Net cash at beginning of period 46 36 36
Net cash at end of period 72 55 46
statement of changes in equity
Share capital Total capital
and Retained and
share premium earnings reserves
R"million R"million R"million
Balance at 1 April 2002 349 184 533
Net loss for the year - (46) (46)
Dividends paid - (15) (15)
Treasury shares sold (8) - (8)
Capital reduction - cash (36) - (36)
Capital reduction - shares (268) - (268)
Share distribution to the
SuperSport Share Trust 14 - 14
Balance at 31 March 2003 51 123 174
Balance at 1 April 2002 349 184 533
Net loss for the period - (135) (135)
Balance at 30 September 2002 349 49 398
Balance at 1 April 2003 51 122 173
Effect of adoption of AC 133 - (120) (120)
As restated 51 2 53
Net profit for the period - 7 7
Treasury shares sold 4 - 4
Balance at 30 September 2003 55 9 64
SUPPLEMENTARY INFORMATION
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2003 2002 2003
(Reviewed) (Reviewed) (Audited)
R"million R"million R"million
Included in operating profit:
Depreciation for the period 1 2 3
Provision for losses against
associates and joint ventures - - 7
Amortisation of intangible assets 1 3 7
Rental under operating leases:
Office buildings 1 1 1
Net finance (costs)/income (93) 8 21
Interest received 8 11 21
Interest paid (1) (3) -
Realised foreign exchange losses (9) - -
Net unrealised fair value loss on forward
contracts and derivatives (91) - -
(100) - -
Headline earnings is reconciled as follows:
Net profit/(loss) for the period 7 (135) (46)
Adjusted for:
Impairment of listed investments - 176 123
Amortisation of goodwill - 3 4
Net movement in provision for losses
against loans in associates
and joint ventures - - 7
Headline earnings 7 44 250
Investments and loans 67 268 62
Listed shares at cost 15 216 14
Loans
Joint ventures 4 5 8
Associates 48 47 44
Capital expenditure for the period 1 - 6
Capital expenditure committed
or authorised - - -
Sports events rights commitments 1 330 1 233 1 312
Operating lease commitments 1 1 4
Number of ordinary shares in
issue (millions) 256 253 253
Number of ordinary shares to compute
earnings and headline earnings
per share (millions):
- basic 256 253 253
- diluted 259 255 255
Net asset value per share (cents) 25 148 68
Rand/naira exchange rate
at 30 September 2003: R1,00 = N18,7
NOTES:
These condensed consolidated interim financial statements for SuperSport
for the six months ended 30 September 2003 comply with South African
Statements of Generally Accepted Accounting Practice and were prepared in
accordance with AC 127- Interim Financial Reporting.
The accounting policies used in the preparation of the condensed
consolidated interim financial statements are consistent with those used in
the annual financial statements for the year to 31 March 2003, except for
the adoption of AC 133: Financial Instruments- Recognition and Measurement,
as described below.
SuperSport adopted AC 133 on 1 April 2003. In accordance with AC 133, the
comparative financial information for the year ended
31 March 2003 and for the six months ended 30 September 2002 have not been
restated.
Segmental information
SuperSport is involved in the acquisition, packaging, scheduling and
broadcasting of sports and sports-related programming and related
advertising activities, and has interests in various sport operations.
SuperSport has no separable operations and, from a geographical standpoint,
although it also broadcasts outside South Africa, its operations are
conducted from South Africa.
INTRODUCTION
SuperSport shares are linked to those of Electronic Media Network
Limited and trade as indivisible units on the JSE Securities Exchange South
Africa (JSE) and on the Nigerian Stock Exchange.
FINANCIAL REVIEW
In South Africa the subscriber base has stabilised at just above the one
million mark. Advertising revenues remain firm. Elsewhere on the African
continent, the subscriber base to which SuperSport provides channels,
continues to grow steadily.
The strong rand has had a negative impact on the reported results.
SuperSport earns considerable revenues in US dollars from channel services
provided to countries elsewhere in Africa. The stronger rand has resulted
in those revenues translating into fewer rands.
If the rand continues to hold its own against the US dollar over the long
term, this will result in reduced costs as SuperSport has considerable
dollar-based input costs. However, this benefit to the income statement
will only phase in over time as the company has a policy to cover forward
its dollar commitments up to two years.
The decline in foreign currency earnings in rand terms is reflected in
the fact that revenues for the period amounted to R453 million, a decrease
of 5% from the R476 million reported for the same period last year. In
addition, the benefit of the strong rand was passed to subscribers, as no
fee increases were implemented for the analogue base and only a nominal fee
increase for digital subscribers.
The adoption of accounting standard AC 133 with effect from 1 April
2003, which deals with the accounting of foreign currency transactions and
financial instruments, has led to reduced earnings for the period and may
continue to cause severe volatility in reported earnings in future. AC 133
compels SuperSport to value outstanding forward exchange contracts and
derivative instruments on a mark-to-market basis, which resulted in a net
charge of R120 million, R172 million less deferred taxation of R52 million,
against opening retained earnings.
AC 133 also requires SuperSport to charge the income statement with
programming and other foreign costs based on actual market rate on the date
of acquisition. Any movement in the mark-to-market valuation and fair value
measurement of derivative instruments is charged to the income statement.
The result is that the income statement for the six months ended
30 September 2003 reflects a net charge of R100 million, of which
R91 million is unrealised.
These charges, flowing from the adoption of AC 133, have also weakened
the balance sheet and at 30 September 2003 the share capital and reserves
of the company were R64 million, compared with R173 million at
31 March 2003.
The result of the strong rand and the adoption of AC 133 is that
headline earnings for the period are R7 million, compared with headline
earnings of R44 million for the same period last year (net profit excluding
the impairment charge of R176 million in respect of the investment in MIH
Limited and amortisation of goodwill of R3 million). This translates to
headline earnings per share of 2,98 cents for the period (2002: 17,2
cents).
The impact of the strong rand and the adoption of AC 133 led to
SuperSport issuing a trading update and cautionary announcement on
26 August 2003.
The board notes that it had no choice regarding the adoption of this
accounting standard - it has to adopt it to comply with South African
Statements of Generally Accepted Accounting Practice. However, the board
believes that the application of AC 133 has the effect of presenting
results to shareholders in a format that does not reflect the underlying
commercial reality of the business. Accordingly, the board is of the view
that the relevant authorities should reconsider the appropriateness of this
standard.
The business remains cashflow positive and at 30 September 2003
SuperSport had cash of R72 million.
DIVIDEND
It is SuperSport"s policy to pay a single dividend at the end of each
financial year. However, as a consequence of the adoption of AC 133, the
payment of a dividend for the current financial year will be considered by
the board once the results for the full financial year are known.
Consequently the payment date for such dividend will move from March to
later next year.
DEVELOPMENTS AND PROSPECTS
On the broadcasting front, SuperSport 1, the rugby and golf channel,
provides live coverage of the Super 12, Currie Cup, Springbok tours, Six
Nations rugby and all four majors golf championships, including the
European tour.
SuperSport 2, the tennis, motor sport and cricket channel, covers
Formula 1 with uninterrupted viewing, all four tennis Grand Slam events and
local and international cricket.
Exclusive rights to provide live coverage of English FA Premier League,
Spanish League and the addition of the Uefa Champions League, have made
SuperSport 3 the de facto soccer channel on the continent.
The highlights channel SuperSport 4, has been a success and subscriber
satisfaction with this service will lead to expansion of this channel in
the near future.
The continued enhancement of SuperSport"s interactive SuperSport Zone
channel has been well received and is viewed by subscribers as the top one-
stop sports information destination. SuperSport remains committed to the
development of sport across the African continent.
The Rugby World Cup in Australia showcased our commitment to providing
subscribers with unsurpassed coverage of sports events. Live coverage of
all the games, dual commentary, interactive television applications, live
scores, background statistics and daily magazine programmes, some live from
Australia, brought our subscribers the best coverage of this event.
The legislated list of sports events that may not be televised
exclusively on pay television in South Africa was promulgated during the
period under review. The need for such a list is not clear, as it will have
far reaching effects on the independence of sports bodies and the value of
their rights. However, SuperSport remains committed to operating within the
bounds of this legislation.
The outlook for the remainder of the financial year will largely be
influenced by the strength of the rand. As the currency continues to
strengthen or weaken earnings are likely to be considerably impacted.
Operating expenditure remains in line given the stringent focus on cost
controls. Management will continue to focus on attaining operational
efficiencies and protecting margins.
CORPORATE GOVERNANCE
SuperSport is committed to the principles of openness, integrity and
accountability, as advocated in the King Report on Corporate Governance for
South Africa 2002 (King II). The directors recognise the need to conduct
the business of the enterprise with integrity and in accordance with
generally accepted corporate practices. Accordingly, the board continues to
evaluate the company"s corporate governance procedures and policies.
The company"s auditors, PricewaterhouseCoopers Inc., have reviewed the
condensed consolidated financial information contained in this report. The
review opinion is available for inspection at the company"s registered
office during normal business hours.
WITHDRAWAL OF CAUTIONARY
Shareholders are referred to the trading update and cautionary
announcement dated 26 August 2003. As a consequence of the publication of
the interim results, this cautionary is now withdrawn.
On behalf of the board
Khulu Sibiya Heinrich Enslin
Chairman Chief executive
20 November 2003
Transfer secretaries
Computershare Limited
70 Marshall Street
Johannesburg 2001
(PO Box 1053, Johannesburg 2000)
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.supersport.co.za
Directors: KB Sibiya (chairman), DDB Band, JP Bekker, JS Craib,
S Dakile-Hlongwane, PC Desai, HR Enslin (chief executive),
PM Jenkins, GP Marques, ACG Molusi, VB Mona, KD Moroka,
SJZ Pacak, CJ Sidego, JJ Volkwyn, T Vosloo
Alternate directors: MJ Ledwaba, JRD Modise, SF Ward (British)
Company secretary: G Kisbey-Green
Date: 20/11/2003 05:00:15 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
