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AFRICAN MEDIA ENTERTAINMENT - PROVISIONAL REPORT FOR THE YEAR ENDED
31 OCTOBER 2004
African Media Entertainment
(Incorporated in the Republic of South Africa)
(Registration number 1926/008797/06)
("AME" or "the Group")
JSE Share code: AME
ISIN number: ZAE000014106
PROVISIONAL REPORT FOR THE YEAR ENDED 31 OCTOBER 2003
Abridged group income statement
for the year ended 31 October 2003
Reviewed Audited
2003 2002
R"000 R"000
Revenue 92 650 130 120
Continuing operations 78 163 66 461
Discontinued operations 14 487 63 659
- The Dome at Northgate 10 264 7 725
- Foghound Studios 3 617 12 956
- Other 606 42 978
Cost of sales and operating expenses 91 816 149 665
Continuing operations 73 284 94 285
Discontinued operations 18 532 55 380
Operating profit/(loss)
Continuing operations 4 878 1 352
Discontinued operations (4 044) (21 243)
- The Dome at Northgate (2 112) (2 456)
- Foghound Studios (1 912) 397
- Other (20) (19 184)
Operating profit/(loss) before exceptional
items 834 (19 891)
Exceptional items 5 779 27 118
Operating profit 6 613 7 227
Net interest paid (2 669) (5 218)
Profit before taxation 3 944 2 009
Taxation (4 060) (11 896)
Current (4 369) (4 101)
Deferred 309 (7 795)
Loss after taxation (116) (9 887)
Outside shareholders" interest (1 809) 424
Loss attributable to ordinary
shareholders (1 925) (9 463)
Loss per share (cents) (0,22) (1,17)
Headline earnings/(loss) per share for
continuing operations (cents) 0,10 (1,71)
Total headline loss per share (cents) (0,45) (4,02)
Weighted average number of shares in
issue (000"s) 864 687 809 354
Headline earnings/(loss) reconciliation
Loss attributable to ordinary
shareholders (1 925) (9 463)
Exceptional items (5 779) (27 118)
Deficit/(surplus) on disposal of
business 1 619 (23 406)
(Reversal)/impairment of loan to share
incentive trust (800) 1 562
(Reversal)/impairment of investments
and loans (6 598) 1 270
Reversal of vendor liabilities - (6 544)
Discontinued operations 4 812 18 721
Amortisation of intangible assets 3 781 4 056
Headline earnings/(loss) for continuing
operations 889 (13 804)
Abridged group balance sheet
as at 31 October 2003
Reviewed Audited
2003 2002
R"000 R"000
Assets
Non-current assets 38 215 44 450
Property, plant and equipment 3 071 6 458
Long-term receivables - 1 600
Share Incentive Trust 536 317
Intangible assets 30 244 35 734
Deferred taxation 4 364 341
Current assets 19 853 55 179
Trade and other receivables 15 453 17 777
Other receivables 4 400 37 402
Total assets 58 068 99 629
Equity and liabilities
Capital and reserves
Issued capital and reserves 13 035 14 410
Minority interests 4 006 14 050
Non-current liabilities
Interest-bearing borrowings - 8 026
Current liabilities 41 027 63 143
Trade and other payables 20 042 29 794
Current portion of vendor liabilities 869 2 989
Current portion of interest-bearing
borrowings 6 178 15 607
Taxation payable 7 944 6 499
Bank overdraft 5 994 8 254
Total equity and liabilities 58 068 99 629
Abridged group cash flow statement
for the year ended 31 October 2003
Reviewed Audited
2003 2002
R"000 R"000
Cash available from operations 2 571 5 136
Investing and financing activities 395 (7 829)
Net movement in cash and cash
equivalents 2 966 (2 693)
Cash and cash equivalents at beginning of
year (8 254) (340)
Cash and cash equivalents from acquisitions
and disposals (706) (5 221)
Cash and cash equivalents at end of year (5 994) (8 254)
Statement of changes in equity
for the year ended 31 October 2003
Reviewed Audited
2003 2002
R"000 R"000
Issued capital 8 647 8 427
Balance at beginning of year 8 427 7 795
Issued during the year 220 632
Share premium 32 431 32 101
Balance at beginning of year 32 101 30 768
Issued during the year 330 1 333
Accumulated loss (28 043) (26 118)
Balance at beginning of year (26 118) (16 655)
Loss for the year (1 925) (9 463)
Total shareholders" interest 13 035 14 410
Comments
Financial Commentary
The Group maintained its programme of disposing of non-core assets and
operations and, after the end of the year, has finalised this process by not
signing a new lease for The Dome at Northgate premises. As The Dome had incurred
significant losses again this year, the decision to liquidate the company
ensured a swift withdrawal from this non-core business. Although The Dome at
Northgate incurred further losses during the first two months of the new
financial year, the liquidation is expected to have a positive impact on Group
earnings in 2004.
In March 2003 the Group disposed of the business of Foghound Studios as part of
its policy to focus management"s attention on the Group"s core business
commercial radio. Foghound Studios produced television commercials and the
losses reflected under discontinued operations included the trading losses to
the date of sale.
The continuing operations of the Group, which now comprise the radio stations
AlgoaFM (Eastern Cape) and OFM (Central South Africa) and United Stations, the
agency that provides the radio stations with their advertising, increased gross
revenue by 17,6% (2002: 16,5%). The contribution to operating profit by these
entities increased from R1,35 million in 2002 to R4,88 million in 2003.
Exceptional items of R6,27 million (2002: R27,12 million) were recognised during
the year. However, this year they substantially comprise the reversal of
impairments, set up in prior years, against the Group"s investments (including
the company"s share incentive trust) rather than profits from the disposal of
non-core business.
The Group"s interest cost reduced by 49% (2002: 28%) in the current year, but is
still considered too high. The legacy debt that arose from the Group"s previous
business activities is the main cause of this interest and efforts will be made
to reduce this debt during the 2004 financial year. Management will also be
taking steps to reduce the Group"s overheads to be in line with its more focused
structure.
Accounting Policies
This report has been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice. The accounting policies applied in this
report are consistent with those applied by the Group in the previous financial
year.
As the placing into liquidation of The Dome at Northgate (Pty) Limited took
place prior to the formal approval of the Group"s financial results, The Dome"s
results have been reflected as "discontinued" in the abridged income statement.
Comparative figures have been re-presented to reflect a more accurate view of
the continuing operations of the Group.
Prospects
With the proposed relaxation of regulations surrounding ownership of radio
stations, AME is well placed to take advantage of the expected new legislation
and to reduce the losses attributed to shareholders in recent years.
Going Concern
The Group continues to experience difficulty with its working capital management
due to the cash flow constraints arising from the Group"s legacy debt, a
material portion of which is included in the balance sheet under other payables.
The directors are presently considering means to recapitalise the Group. Any
decision in this regard may be subject to shareholder and regulatory approval.
Audit Review
The financial results for the year ended October 31, 2003 have been reviewed, in
terms of rule 3.23 of the Listing Requirements of the JSE Securities Exchange
South Africa, by the Group"s auditors, Charles Orbach & Company. In their review
report they have drawn attention to the directors" statement relating to the
going concern issue. A copy of the auditor"s review report is available for
inspection at the registered office of the company.
Annual General Meeting
The annual report of the company will be posted to shareholders on or about 24
March 2004 and it is anticipated that the annual general meeting will be held at
09:00 on Monday, 19 April 2004.
By order of the Board
K Ngqula SB Katz
Chairman Chief Operating Officer
Johannesburg
5 February 2004
Registered Office:
Park Terras, 5th Floor,
33 Princess of Wales Terrace,
Parktown
PO Box 3014,
Houghton 2041
Transfer Secretaries:
Computershare Limited,
70 Marshall Street,
Marshalltown 2107
PO Box 61051,
Marshalltown 2107
Directors:
K Ngqula (Chairman)*, SB Katz (Chief Operating Officer), Z Lacob*, J Makobe*,
MJ Prinsloo*
*Non-executive
Website: www.ame.co.za
Date: 05/02/2004 05:19:08 PM
Produced by the JSE SENS Department
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