MSN business set for growth in 2013: Kagiso

JSE-listed Kagiso Media says its MSN division had to recalibrate itself after the loss of the online gambling advertising spend, but is now well positioned to grow in 2013.

Kagiso says that its share of gambling advertising spend was estimated at R12 million.

Kagiso’s MSN business was established in a partnership with Microsoft (MSN) in 2010 to manage and localise the portal in South Africa.

Under the terms of the agreement, Kagiso Media is also the sole sales partner for all Microsoft’s Windows Live properties – including Hotmail and Windows Live Messenger – in South Africa and sub-Saharan Africa.

Kagiso Media reported on Friday (14 September) that total revenue increased by 21.3% to R956.9 million for the year ended June 2012, “this growth being driven primarily by the broadcasting, content, information and other segments”.

The group reported an 11.45% fall in diluted headline earnings per share for the year ended June 2012‚ to 135.3 cents from the 152.8 cents previously.

Operating profit rose marginally to R258.6 million, from R252 million in 2011.

Kagiso Media declared a final cash dividend of 30 cents per share‚ from the 35 cents in 2011, and also declared a special dividend of 20 cents‚ taking the final dividend to 50 cents.

Kagiso Media’s radio assets include East Coast Radio and Jacaranda FM (80% holding). It has also maintained strategic investment stakes in OFM (24.9%), Heart 104.9 (20.0%), Gagasi 99.5 (20.0%) and has an economic interest in Kaya FM (47.4%).

Murphy Morobe‚ Kagiso Media CEO‚ said: “Our new media businesses are well positioned for good growth‚ while the full-year effects of the Juta acquisition will bolster the performance in our ‘information and other’ pillar.”

During the current financial year, Kagiso disinvested its 50% share in business software and solutions provider, LexisNexis and acquired a 100% stake in legal services entity the Juta Group for R300 million.

“We therefore plan to unlock continued organic growth in our home market. Furthermore‚ we expect recent acquisitions – completed after our year-end – to be earnings-enhancing while supporting our long-term growth strategy‚” Morobe said.

He pointed out that a platform for expansion into selected markets in East and West Africa was in place.

In prior results, Kagiso noted that HowzitMSN had grown rapidly to become South Africa’s largest website by audience as measured by the OPA.

The group said that MSN was poised for expansion into East Africa and with further growth prospects from mobile and its continued channel rollout strategy.

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MSN business set for growth in 2013: Kagiso