Kagiso Media (KGM) on Wednesday (February 29, 2012) cited a significant trading improvement in its broadcasting division for a rise in adjusted headline earnings per share (HEPS) to 82.3 cents for the six month period ended December 31, from 76.8 cents previously.
Revenue increased 15% to R455.3 million, and profit before tax increased 13% to R165.7 million.
Kagiso said the broadcasting division posted excellent results on the back of focused customer initiatives and new content investment.
For the period under review, operating margins declined from 34.2% to 32.7%, due to lower margins achieved in the content division. Urban Brew was affected by production delivery phasing from major broadcasting customers delaying projects to 2012, it said.
During the period under review Kagiso settled the remaining preference share debt, leading to a reduction in financing costs.
KML disposed of its 50% interest in LexisNexis to Reed Elsevier on December 15, 2011 for a consideration of R565 million with an additional final dividend of R24.5 million being paid on that date.
The Group reported cash of R716 million at December 31, 2011 which is up from R233.3 million at June 2011. “While the cash conversion continues to meet targets, the bulk of the increased cash arises from the LexisNexis transaction,” the group said.
“The new media division has had a tough start to the year. The ban imposed by government on online-gambling advertising affected the MSN business severely, as did the loss of an important account at Gloo. Replacement customers have been sourced and the benefit of this will be reflected in future results,” Kagiso said.
Looking ahead, the media group said it was cautious about achieving the revenue targets for Gloo in 2012.” In the content division results for Urban Brew Studios have been disappointing for the six months trading. The content production market is expected to be challenging with major customers postponing content commitments for the remainder of 2012.
Brands in the Kagiso portfolio include Jacaranda FM 94.2, East Coast Radio, Heart 104.9, Kaya fm, Howzit MSN and Gloo Design Agency.
Kagiso declared an interim dividend of 41 cents (2010: 40 cents) per share.
As a result of the cash flow generated by the LexisNexis disposal the company said it would pay a further special dividend of 20 cents per share to all holders of ordinary shares.
Subsequent to the interim period, the shareholders of Juta & Company, accepted Kagiso Media’s offer to acquire 100% of the shares in the group.
The effective acquisition date for Juta is expected to be April/May 2012, subject to the final approval of the Competition authorities, it said.