MultiChoice reports strong growth and promises more local content

MultiChoice Group said it delivered solid results for the period ended September 2019, adding 1.2 million 90-day active subscribers, representing 7% year-on-year (YoY) growth, taking the overall subscriber base to 18.9 million households.

The subscriber base is split between 10.7 million households in the Rest of Africa (RoA) and 8.2 million in South Africa (SA).

MultiChoice said that revenue was up 4% (3% organic) to R25.7 billion and included subscription revenue of R21.2 billion, which grew at similar rates. The group’s South African operation saw revenue climb to R16.95 billion, from R16.69 billion in 2018.

Top line momentum was affected by the group’s strategic decision not to increase Premium prices in South Africa, it said.

Group operating profit climbed 19% to R4.9 billion.

Core headline earnings, the board’s measure of sustainable business performance, was up 24% on the prior period at R1.9 billion, while diluted headline earnings per ordinary share climbed to 339 cents per share, from 78 cents per share previously.

No interim dividend was declared. The group said it remains on track to declare a dividend of R2.5 billion for FY20.

“We are pleased with our solid financial performance and our ability to navigate a very challenging economic climate,” said chief executive officer, Calvo Mawela.

“The Group’s cost saving objectives for FY20 remain on track with R700 million in costs eliminated from the base during 1H FY20, mainly as a result of the continued shift in spend towards more cost-effective local content, innovation in customer care, contract renegotiations, hardware savings and the introduction of platform efficiencies.”

MultiChoice said it continued its strategic focus on local content, increasing the number of hours produced by 12%.

“As a result, the total local content hours in the library now exceeds 54,000 hours,” it said.

Local content highlights over the past six months included the launch of the first co-production, Trackers, and the locally produced, The River, being nominated for an International Emmy Award. MCG also won an International Drama award at Seoul for The Herd. The final votes cast in the latest season of Big Brother NAIJA increased to a record 240 million, and the ratings for Survivor South Africa rose by 36% in relation to the previous season.

SuperSport continued to broadcast popular sporting events such as the Africa Cup of Nations, the Cricket World Cup and the Rugby World Cup.

Capital expenditure (capex) of R0.3 billion was in line with the prior period.

“In the second half of FY20, subject to a stable regulatory environment, the group will continue to scale its video-entertainment services across the continent, mainly in the middle and mass markets.We remain focused on ramping up our investment in local content and expanding our OTT offering.

“Seasonality normally has a bigger impact on our second-half performance, both in terms of customer growth and costs, and will largely determine our full-year performance. Combined with the risks associated with a weak macro- and consumer environment that appears to be deteriorating, we are cautious about expectations for the rest of the year,” MultiChoice said.

Read: DStv owner MultiChoice expects profit surge

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MultiChoice reports strong growth and promises more local content