Kagiso’s MSN business was established in a partnership with Microsoft (MSN) in 2010 to manage and localise the www.howzit.msn.com portal in South Africa.
On Thursday (28 February) Kagiso Media reported a 56% rise in group revenue in interim results for the period ended December 2012, to R709 million, but also noted that operating profit dropped to R140.19 million, from R148.71 million in 2011.
Diluted headline earnings per share dropped to at 80.5 cents, versus 82.1 cents before.
The company said it would pay an interim dividend of 45 cents per share, from 41 cents in the prior year.
Kagiso said its New Media division continues to enjoy exceptional revenue growth, up 43% from R38 million in 2011, to R54,5 million; however, operating profit remains flat. “This is due to ongoing investment in people, systems and marketing, to support the operations as they move from the early start-up stages to the next stage of growth,” it said.
The cash generated from operations increased by 15% to R167.5 million, largely driven by its broadcasting division. Brands within this division include: East Coast Radio, Jacaranda FM 94.2, Heart 104.9, Ofm 94-97, and Kaya fm.
The group said it maintains a healthy cash balance of R416,9 million.
Looking ahead, Kagiso said that the South African economy remains in a low growth cycle, and it anticipates a continued slowdown in economic growth in the coming months.
However, the group said that trading conditions should prove resilient in the coming months, given that most of its operations trade in relatively mature markets.
“The outlook for New Media is in line with expectations and remains positive. Our partner, Microsoft, has approved expansion plans to East and West Africa, and the MSN Africa portals are planned to go live in July 2013,” Kagiso said.
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