Pay-TV operator MultiChoice Group (MCG) delivered solid financial results for the year ended 31 March 2020.
This despite the company facing fierce competition from US-based streaming service Netflix.
Highlights include 38% growth in core headline earnings to R2.5 billion, with consolidated free cash flow increasing by 59% to R5.2 billion, driven mainly by an improvement in the trading results from the rest of Africa (RoA), a focus on cost containment and a reduction in working capital.
“We are certainly facing unprecedented times but are pleased with our performance and the resilience we have demonstrated this year,” says Calvo Mawela, chief executive officer.
“Our healthy balance sheet positions us well to weather the uncertainties in our markets going forward. We have also honoured our commitment to shareholders by declaring a maiden dividend of R2.5 billion, on top of some R1.7 billion in share buy-backs executed during the year.”
In a statement, the company says despite global and country-specific macro-economic challenges, the group added 0.9 million 90-day active subscribers, representing 5% growth year-on-year.
This took the overall subscriber base to 19.5 million households, split between 8.4 million households in SA and 11.1m households in the RoA, says the company.
Revenue was up 3% to R51.4 billion and included R42.8 billion in subscription revenue which increased 4% year-on-year.
The pay-TV operator says top line momentum was affected by modest subscriber growth due to rising consumer pressure, a decision not to increase prices of its Premium package in South Africa, and the fact that last year’s growth benefitted from specific once-off events.
Nonetheless, it notes, a strong focus on cost containment underpinned a 14% increase in trading profit to R8 billion (29% organic), with some R1.4 billion in cost savings generated during the year and a R800 million (R1.8 billion organic) reduction in losses in RoA.
It points out that the like-for-like core headline earnings increase, which excludes the impact of the additional 5% allocated to the Phuthuma Nathi shareholders in March 2019, was 57%.
The group reported R9.1 billion in cash and cash equivalents, which combined with R5 billion in undrawn facilities provides R14.1 billion in financial flexibility.
“We have long been a content aggregator, and this is proof of our aggregator model at work – providing simplicity, choice and convenience for our customers,” Mawela explains.
“As our industry evolves, we believe that we are well positioned to benefit from both worlds – a large, growing pay-TV market in Africa, as well as an emerging over-the-top (OTT) opportunity, where our own OTT services and aggregation capabilities can drive success.”
Share