JOHANNESBURG, South Africa, June 10, 2021 (GLOBE NEWSWIRE) — MultiChoice Group (MCG, or the group), Africa’s main video leisure firm, fastidiously navigated COVID-19 challenges to ship robust outcomes for the yr ended 31 March 2021 (FY21).
The group elevated its 90-day lively linear pay-tv subscriber base by 1.4m to succeed in 20.9m households, cut up between 8.9m in South Africa and 11.9m within the Remainder of Africa (RoA). This represents an accelerated 7% development year-on-year (YoY), pushed by heightened client demand for video leisure merchandise, continued penetration of the mass market and an easing of electrical energy shortages in southern Africa.
Income was resilient, rising by 4% (4% natural) to R53.4bn. This efficiency, coupled with a agency deal with value containment and a R1.5bn (R2.7bn natural) discount in buying and selling losses within the Remainder of Africa translated right into a 28% (44% natural) improve in buying and selling revenue to R10.3bn.
Core headline earnings, the board’s measure of sustainable efficiency, was up a significant 32% YoY to R3.3bn, whereas free money circulation grew a stable 10% to R5.7bn.
The group reported R8.5bn in money and money equivalents at year-end. Mixed with R4bn in undrawn amenities, this gives R12.5bn in monetary flexibility to help dividends and development initiatives.
“The COVID-19 pandemic taught us extra in regards to the artwork of the doable,” says Calvo Mawela, Chief Govt Officer. “We began the yr confronted with extreme disruptions to our programming schedules, bleak macro-economic forecasts for a lot of of our markets and sharply weaker currencies. Within the face of those challenges, our groups rallied collectively – this helped us ship on all our key efficiency metrics and supply extra worth to our shareholders by declaring a R2.5bn dividend.“
The group continued its differentiation technique by stepping up its funding in native content material. Regardless of manufacturing stoppages and journey restrictions caused by the pandemic, it produced 19% extra content material than final yr – a sizeable 4 567 hours. Because of this, the full native content material library now exceeds 62 000 hours. Some 42% of the group’s basic leisure spend was on native content material and it stays on observe to succeed in its goal of 45% by FY22.
To assist handle US dollar-based prices, two main worldwide content material agreements (and several other smaller ones) have been renegotiated into South African rand (ZAR). The group additionally launched 11 new native language channels throughout sub-Saharan Africa, accomplished 5 new co-productions with international content material producers and bought 16 of its collection to worldwide patrons.
Along with compelling native tales, MCG continues to broadcast the most effective of sport. This yr, the group renewed the rights to the English Premier League and UEFA Champions League and in addition secured broadcasting rights to the FIFA World Cup 2022 in Qatar. On the worldwide content material entrance, it maintains mutually useful relationships with its studio companions, and has efficiently added entry to Netflix, Amazon Prime and extra just lately YouTube on its DStv Explora Extremely decoder.
Along with the brand new services launched through the first half of the yr (together with Showmax Professional, DStv Communities, DStv Rewards and ADD Films), the Group expanded its monetary companies portfolio, going past providing pure decoder insurance coverage to incorporate funeral cowl, subscription waiver and debt waiver merchandise.
“We now have a extremely engaged base of 20.9m subscribers and with a median of 5 folks per family, this helps us attain roughly 100 million folks. We see nice alternative to maintain enriching the lives of our clients by increasing our leisure ecosystem with progressive choices that will even improve our income prospects,” commented Mawela.
The Group made a 20% funding in pan-African sports activities betting enterprise BetKing and subsequent to yr finish has introduced its intention to extend this funding to 49%. This funding will improve the group’s shareholding in BetKing from 20% to 49% for a consideration of $282m (R4.0bn). This funding provide stays topic to preconditions being met.
Each promoting and industrial subscription revenues have been considerably impacted by COVID-19. Promoting revenues have been down 34% YoY (R0.6bn) on the interim stage however recovered effectively within the second half as COVID restrictions eased, ending 11% down YoY at R2.8bn. Equally, industrial subscription revenues began to get well within the latter a part of the monetary yr however completed 35% decrease than the prior yr. The hospitality business is anticipated to take a while to return to regular buying and selling.
The group achieved its goal of producing optimistic working leverage by protecting income development forward of the expansion in prices. Natural income development of 4% mixed with a 3% natural discount in working prices resulted in improved working leverage of seven%, 2 proportion factors larger than the prior yr. A deal with tight value controls and the early implementation of value slicing initiatives underpinned an growth within the group’s buying and selling margin from 16% to 19%. Price financial savings amounted to R1.5bn for the yr, exceeding the group’s stretch goal of R1.4bn. Financial savings have been largely fastened in nature with greater than half referring to content material and the steadiness to a broad vary of initiatives similar to gross sales and advertising and marketing and decrease decoder unit prices.
Capital expenditure (capex) of R1.6bn was R0.7bn up on the prior yr, primarily resulting from a multi-year funding programme to improve the group’s customer support, billing and knowledge capabilities. As one of many largest taxpayers in Africa, MCG paid direct money taxes of R4.1bn, barely greater than the prior yr pushed by larger group profitability.
The energy of the steadiness sheet stays critically vital given the unsure longer-term financial impression of COVID-19 and funding necessities for the Remainder of Africa, which can also be impacted by liquidity constraints in Nigeria. Of the reported money steadiness of R8.5bn, holdings of R2.5bn (FY20: R1.7bn) in Nigeria, Angola and Zimbabwe stay uncovered to weaker currencies.
To enhance the group value of capital and reinforce the assertion of monetary place, an amortising working capital mortgage of R1.5bn was concluded in November 2020. The mortgage has a three-year time period and bears curiosity at an all-in fastened fee of 5.75%.
The South African enterprise held up effectively in a troublesome client local weather, delivering subscriber development of 6% YoY or 0.5m linear pay-tv subscribers on a 90-day lively foundation. The impression of COVID-19 and the related lockdowns noticed customers prioritise video leisure companies, however the cancellation of dwell sport occasions mixed with the shortcoming of business subscribers to commerce and a weak promoting setting impacted negatively on income technology, particularly early within the monetary yr.
Income elevated 1% to R34.3bn, whereas buying and selling revenue elevated 9% to R11.1bn, representing a margin of 32%. This larger profitability might be attributed to the non-recurrence of three main sporting occasions expensed within the comparative prior interval, a robust deal with the group’s value optimisation programme, decrease operational prices in a COVID-19 setting and a short lived shift in content material prices on account of delays in sporting occasions.
Linked Video customers on the DStv app and Showmax proceed to develop as on-line consumption will increase. In the course of the yr Showmax launched Showmax Professional, the group’s first standalone on-line sport providing, in addition to DStv Streaming, which permits clients to subscribe to an online-only service. Native content material can also be proving to be a key differentiator on Showmax, with native content material viewership up considerably this yr, and 4 of the highest 5 titles on Showmax being native productions. A file variety of Showmax originals have been launched through the yr, together with the primary Kenyan and Nigerian unique collection.
Plenty of progressive, customer-centric merchandise launched on this previous yr. The brand new DStv Explora Extremely decoder permits subscribers to seamlessly shift between satellite tv for pc and on-line platforms, with a single billing platform. DStv Rewards leverages the group’s provider relationships to reward clients primarily based on their behaviours, DStv ADD Films was the group’s first significant foray into style add-ons, whereas DStv Communities permits collective funds to enhance lively days and retention. Though these merchandise are new to market, early indicators are promising, with efficiency monitoring both forward or consistent with expectations.
Remainder of Africa
The Remainder of Africa enterprise grew its 90-day lively linear pay-tv subscriber base by 8% YoY or 0.8m subscribers, regardless of a difficult macroeconomic setting and ongoing client strain. The closing subscriber base is now 11.9m. A lot wanted rainfall diminished electrical energy shortages in southern Africa, leading to a restoration of shoppers in Zambia and Zimbabwe. The group additionally improved its Ethiopian native product providing, which incorporates localised billing, extra Amharic content material and SuperSport native language commentary.
Income was up 11% (14% natural) to R17.2bn, supported by stable subscriber development and inflationary worth will increase carried out in most markets. Whereas materials forex depreciation within the Angolan kwanza (47%), the Zambian kwacha (25%) and the Nigerian naira (7%) affected the section’s monetary outcomes, the enterprise made important progress in direction of its medium-term breakeven goal. Buying and selling losses narrowed by a sizeable R1.5bn (R2.7bn natural) or 52% (91% natural) pushed by a mix of income development, efficient value management and decrease content material prices with sports activities occasions being delayed.
Liquidity challenges continued in Nigeria all through the monetary yr, and though being actively managed, money balances in Nigeria elevated R0.8bn to shut at R2.3bn.
The Remainder of Africa enterprise loved a number of operational successes together with delivering the strongest festive season development in historical past, a big ramp up in digital self-service utilization and the roll out of on-line funds in 36 markets, with digital funds greater than doubling YoY.
The Expertise section, comprising Irdeto, had a stable yr. Regardless of the nonrecurrence of USD8m in once-off revenues within the prior yr and clients deferral of sure initiatives resulting from COVID-19, it contributed R1.8bn in revenues, a rise of 5% YoY (-1% natural). The buying and selling revenue margin normalised to 31%.
In the course of the yr, Irdeto gained additional market share in offering digital safety companies within the video leisure sector, successful six tier-one clients and integrating its watermarking know-how with IBM’s cloud platform to allow simpler deployment by operators. Past video, it expanded its gaming safety platform to incorporate Steamworks, the most important digital distribution platform for PC video games, and Sony for the PlayStation 5. Irdeto continued to develop its deployment of linked automobiles with the Hyundai group delivery 200 000 automobiles embedded with Irdeto’s KeyStone know-how. Irdeto additionally added new initiatives to safe high-speed rail networks and capital-intensive development tools.
Topic to a secure regulatory setting and the unknown impression of the COVID-19 pandemic, the group will proceed scaling its video leisure companies throughout the continent, specializing in each conventional linear broadcasting and streaming companies. As well as, it plans to additional improve its funding in native content material to a goal 45% of whole basic leisure spend and pursue new development alternatives that can improve buyer experiences and income prospects.
“We’re having fun with good momentum and are enthusiastic about our prospects for the yr forward. Our promoting enterprise is recovering and we have now plans to additional improve our leisure ecosystem. We look ahead to an distinctive slate of native content material and the significant return of dwell sport as we make amends for the occasions missed on this previous yr,” says Mawela. “We’re nonetheless cognisant of ongoing client strain in what stays an unsure COVID-19 setting, continued macro-economic volatility in our markets and the necessity to take up deferred content material prices within the new yr. We are going to look to counter potential headwinds by tight value management and by driving operational excellence. Our robust steadiness sheet positions us effectively to face up to these uncertainties and ship worth to our clients and shareholders.”
Extra details about the MultiChoice Group’s monetary outcomes is obtainable on the web site: http://investors.multichoice.com/latest-results.php
About MultiChoice Group
MultiChoice Group (MCG), which listed within the Important Board of the JSE on 27 February 2019, is without doubt one of the fastest-growing video leisure suppliers globally, delivering leisure services to twenty.9m households throughout 50 nations on the African continent. Its observe file of greater than 35 years is reflective of a dedication to supply audiences with solely the most effective native, sport and worldwide content material.
MCG’s robust partnerships with distributors, installers and telecommunication corporations, together with its well-established fee options, aggressive pricing and selection of viewership packages proceed to safe its place within the international market, whereas additionally offering options distinctive to the African market.
Its direct-to-home (DTH), digital terrestrial tv (DTT) and over-the-top (OTT) options allow the enterprise to remain related and aligned to altering client habits whereas capturing new markets.
Content material is on the very core of the enterprise. MCG goals to ship high quality content material wherever, anytime and on any machine by a complete video leisure providing at totally different worth factors. As pioneers in African video leisure, MCG performs an vital function in making info and leisure simply accessible to Africans.
MCG goals to safe content material rights in a fashion that’s cost-effective and reflective of the variety of its audiences. Its substantial portfolio consists of award-winning native content material (a key differentiator in its service providing), a number one sports activities providing (together with manufacturing capabilities) and entry to worldwide content material, which is all shared on the group’s platforms: DStv, GOtv, Showmax, M-Web and SuperSport.
MCG has superior know-how functionality by the safety options that Irdeto, its know-how firm, brings to the group. These options allow MultiChoice to guard its funding, create new choices and fight cybercrime. With greater than 50 years’ experience in software program safety, Irdeto’s software program safety options and cyber companies shield over 6bn units and purposes for a number of the world’s greatest manufacturers.
MultiChoice Group Contact Particulars:
Collen Dlamini, Govt Head: Company Affairs
Cellular: +27 83 212 0430
Meloy Horn, Head of Investor Relations
Cellular: +27 82 772 7123
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