Ellies talks up “free-to-view” TV

Ellies, the JSE-listed electronics distributor, has on Tuesday (23 July) reported a 16.6% rise in revenue for the year ended April 2013, to R1.996 billion.

The group also talked up a new business venture created through a “free-to-view” satellite broadcaster, Openview HD, or OVHD, which is due to launch in October.

News of the new satellite broadcasting service coming to South Africa, offering 15 channels, was reported by IT news website MyBroadband on Sunday (21 July).

Platco Digital confirmed in a press statement on Monday (22 July 2013) that it will be launching OpenView HD, a “low-cost” direct-to-home satellite TV service, in October 2013.

According to Ellies, the new TV service will use the same satellites as TopTV – Astra 5°E – and they expect the decoder and installation to be a once-off cost of around R1,899, dependent on retailer.

On Tuesday, Ellies reported a 35.9% rise in headline earnings per share to 74,00 cents, from 54,45 cents per share in 2012.

Profit before interest, taxation, depreciation and amortisation (EBITDA) climbed 27.4% to R348.28 million, while the group decided against a dividend declaration.

“Over the past few months, additional opportunities have arisen, with additional media and visual entertainment providers. Amongst them, a new entrant namely OVHD or Openview HD, a free-to-view satellite broadcaster, is expected to launch in October this year,” Ellies said in a statement.

Ellies is a diversified manufacturer and distributor of electronic products related to television reception including satellite and terrestrial aerial range.

Looking ahead, the group said that management is under no illusions as to the current difficult trading conditions in its sectors.

Despite continued delays to South Africa’s migration to digital terrestrial television (DTT) due to a failure by the Department of Communications to finalise its strategy, Ellies said it remains optimistic. The group expects to be a key player in the manufacture of set-top-boxes for the new service.

“With the latest departmental changes occurring, management remains optimistic in the DTT implementation in the short term. Ellies is still well positioned to participate in and benefit from this rollout with new production machinery being installed for increased local production and employment,” it said.

In the interim, Ellies said it continues to export DTT products into Africa.

Ellies said it also anticipates an expansion into media, visual entertainment and Internet connectivity through a new concept “Ellies Connect”, providing customers with easy access to its services.

It follows the success of its “Green shop within a shop” concept, which saw its renewable energy division roll out additional renewable energy stores throughout the country.

“The group’s initiatives in energy conservation continue to attract new and innovative renewable energy products and ideas. The expansion into commercial energy efficient lighting is attracting much interest amongst existing and new commercial customers,” Ellies said.

The group said that with additional service providers entering the satellite broadband sector, SkyeVine’s future opportunities are reinforced. SkyeVine is its 45% owned subsidiary, and entry into the internet satellite services market.

“Ellies management continues to adopt a conservative approach towards this investment,” it said.

“The group is always engaged in exciting prospects for organic growth, new ventures and product opportunities,” Ellies said.

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Ellies talks up “free-to-view” TV