| Wed 13 Dec 2006, 17:15 | | AME - AME - Provisional Report for the year ended |
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AME
AME
AME - AME - Provisional Report for the year ended 31 October 2006
African Media Entertainment Limited
(Incorporated in the Republic of South Africa)
(Registration number 1926/008797/06)
Share code: AME & ISIN: ZAE000055802
("AME" or "the group")
PROVISIONAL REPORT
for the year ended 31 October 2006
ABRIDGED GROUP INCOME STATEMENT
for the year ended 31 October 2006
% Reviewed Audited
change 2006 2005
R`000 R`000
Revenue 18 101 707 85 916
Cost of sales (23 876) (20 620)
Gross profit 77 831 65 296
Operating expenses (48 162) (42 478)
Operating profit 30 29 669 22 818
Interest received 1 088 239
Interest paid - (816)
Net profit before taxation 38 30 757 22 241
Taxation (9 499) (6 109)
Net profit after taxation 32 21 258 16 132
Minority interest 3 383 2 191
Profit attributable to 28 17 875 13 941
shareholders
Earnings and headline 28 209,3 163,3
earnings per share (cents)
Weighted average number of 8 539 8 539
shares in issue (000`s)
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 October 2006
Reviewed Audited
2006 2005
R`000 R`000
Issued capital
Balance at beginning of year 8 628 8 628
Consolidation of share trust (89) (89)
Balance at end of year 8 539 8 539
Share premium
Balance at beginning of year 32 356 32 356
Consolidation of share trust (447) (447)
Balance at end of year 31 909 31 909
Retained profit/(loss)
Balance at beginning of year (1 784) (15 725)
Profit for the year 17 875 13 941
Balance at end of year 16 091 (1 784)
Non-distributable reserve
Balance at beginning of year - -
Share based payment reserve 172 -
Balance at end of year 172 -
Minorities
Balance at beginning of year 4 679 2 712
Share of dividend (3 610) (224)
Change in shareholding (242) -
Share of profit 3 383 2 191
Balance at end of year 4 210 4 679
Total capital and reserves 60 921 43 343
ABRIDGED GROUP CASH FLOW STATEMENT
for the year ended 31 October 2006
Reviewed Audited
2006 2005
R`000 R`000
Cash generated from operations 31 521 24 218
Net interest received/(paid) 1 088 (577)
Taxation paid (5 727) (9 744)
Increase in working capital (1 829) (470)
Cash available from operations 25 053 13 427
Cash flows from investing activities (296) (2 901)
Cash flows from financing activities (3 443) (6 657)
Net increase in cash and cash 21 176 3 869
equivalents
Cash and cash equivalents at beginning 2 673 (1 196)
of year
Cash and cash equivalents at end of 23 849 2 673
year
ABRIDGED GROUP BALANCE SHEET
at 31 October 2006
Reviewed Audited
2006 2005
R`000 R`000
Assets
Non-current assets 39 195 38 137
Property, plant and equipment 4 657 3 379
Goodwill 30 428 30 428
Deferred taxation 4 110 4 330
Current assets 48 514 22 893
Loans receivable - 2 391
Trade and other receivables 24 665 17 086
Taxation paid in advance - 549
Cash and cash equivalents 23 849 2 867
Total assets 87 709 61 030
Equity and liabilities
Total equity 60 921 43 343
Non-current liabilities 1 279 1 951
Non-interest bearing liabilities 391 335
Lease accrual 888 1 616
Current liabilities 25 509 15 736
Trade and other payables 22 061 15 097
Taxation payable 3 448 445
Bank overdraft - 194
Total equity and liabilities 87 709 61 030
COMMENTARY
The significantly improved level of profitability of the first six months
continued for the full year. Gross revenue for the year increased by 18%
(2005: 7%) from R85,9 million to R101,7 million. Margins were maintained
whilst operating expenses increased by 13% compared to the levels in the
previous year. These factors resulted in Headline Earnings per share
increasing by 28% from 163,3 cents to 209,3 cents.
Algoa FM has just completed the most successful year in its 21 year
history. Listenership has grown by a massive 51% year on year and now
stands at 644 000. This makes Algoa FM the fastest growing commercial radio
station targeting the upper LSM`s in SA for 2006. Algoa FM`s market
penetration has grown from 1,5% in 2005 to 2,1% in 2006.
Algoa FM continues to maintain its strong position in the Eastern Cape
market through its platform of brand building events and ownership of live
concerts. Highlights include Algoa FM`s Air Show being voted as the number
one air show in South Africa by the aviation fraternity for 2006 and its
sponsorship of the SAA SA Golf Open.
Algoa FM`s corporate social responsibility division, Algoa Cares, raised in
excess of R1 million for various charities throughout the station`s
footprint during the year.
Central South Africa`s leading commercial radio station, OFM, experienced
its best-ever year since privatisation in 1996. Year-on-year audience
growth of 25% has taken OFM to its highest ever listenership of 578 000.
This increase has come on the back of an intensified marketing campaign
throughout Central South Africa, and the leveraging of sports sponsorship
of the Vodacom Cheetahs and Wildeklawer Griquas rugby teams and the
Gestetner Diamond Eagles cricket team. The North West Province has been the
biggest growth point for OFM, with 35% more listeners than a year ago. OFM
continues to increase its penetration in the lucrative upper LSM market,
with a 22% increase in LSM 8-10.
In the past year, OFM has brought highly successful events to Central South
Africa, and has actively supported regional events. It also launched the
OFM Wheels magazine, offering a unique print and radio solution to motor
vehicle dealers.
OFM`s success is further highlighted by the number of awards won by the
station and its staff in 2006.
United Stations, the group`s advertising selling agency, also produced good
results for the year. New business bookings for Algoa FM and OFM from
advertisers who have not previously used radio are up significantly, as are
billings from certain core advertisers compared to the same period last
year. United Stations has fought aggressively to secure the largest share
of available advertising revenue and with both Algoa FM and OFM enjoying a
banner year for growth, strategies going forward intends to build new
revenue by making the most of the power of these brands.
The team has embraced the challenges of an increased client base in the
form of Music Content Management, RadioHeads Branded Content and Planet
Radio and have already attained significant success with Moneyweb. The
United Stations team has the opportunity to grow its revenue base
significantly by taking advantage of these new opportunities.
RadioHeads commenced its operations last year offering Branded Content and
Direct Response Radio to advertisers and has seen steady improvements in
all areas of its business.
Cash flow available from operations amounted to R25,1 million. The Group
ended the year in a cash positive position of R23,8 million and earned R1,1
million in interest during the year.
The continued improvement of the balance sheet, efficiencies, control of
costs and the group`s ability to generate cash in a competitive business
environment, positions AME well for the coming year. The cash resources of
the company are being retained in anticipation of the acquisition of 24,9%
of Kaya FM from NAIL and AME being successful with its application for a
secondary radio licence in Mpumalanga. Should these opportunities not
materialise, the surplus cash resources of the company will be distributed
as a dividend.
Accounting policies
These reports have been prepared in accordance with the Group`s accounting
policies, which comply with International Financial Reporting Standards
("IFRS"). The same accounting policies and methods of computation as those
used in the Annual Financial Statements for the year ended 31 October 2005
have been applied.
Audit review
The results have been reviewed by the group`s auditors, Charles Orbach &
Company, and their unqualified review report is available for inspection at
the company`s registered office.
By order of the Board
ACG Molusi
Chairman
13 December 2006
Registered office
5th floor, Park Terras, 33 Princess of Wales Terrace, Parktown,
Johannesburg.
PO Box 3014, Houghton, 2041
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited,
70 Marshall Street Marshalltown.
PO Box 61051, Marshalltown, 2107
Directors
ACG Molusi (Chairman)*, Z Lacob*, MJ Prinsloo*,
W Tshuma* L Thango*
*Non-executive
WWW.AME.CO.ZA
Date: 13/12/2006 17:15:06 Produced by the JSE SENS Department.
