Asha Speckman
TIMES Media Group, the home of the Sunday Times, was restructuring to improve revenue, operating margins and reduce debt, the company said in a voluntary trading update on Friday.
Times Media took over the management of Avusa’s operations in October after it bought out Avusa Limited.
The company said it was reviewing and realigning each business unit but that the turnaround would take time, given the number of smaller companies and complexities in the various businesses.
“The board of directors of Times Media Group, believes the business is appropriately capitalised and efficiently leveraged with sufficient flexibility to support the company’s turnaround strategy. With a diverse portfolio of assets, and a strong management team, the board is confident the business is now well positioned to deliver on its turnaround strategy,” the company said.
Times Media also changed the company’s financial year to June 30. It said interim financial results would cover the six months to December.
However, because Avusa’s final reporting period before its delisting was up to March, in the interests of continuity of information, Times Media provided a voluntary trading update on Avusa for the six months to September.
During the half-year to September, profits grew by 18 percent to R86 million.
Revenue was R2.89 billion compared to R2.85bn for the same period last year.
The media division, which includes newspapers, magazines, out-of-home advertising and I-Net Bridge, improved profits significantly with strong growth in the Sunday Times and a significant improvement in the dailies.
However, the unit’s cost of sales was impacted by a steep hike in fuel prices while the recruitment advertising business revenues were negatively impacted by the mining strikes and would continue to be impacted in the short term.
Profits, before exceptional items, in the media division was R57m for the half-year compared to R47m for the same period last year.
Times Media said the Live websites were on the verge of break-even following aggressive growth in advertising and content revenue.
Revenue growth for the retail solutions unit was constrained due to continuing weak economic conditions and pricing pressures, while its contract with Trudon to print telephone directories would not be renewed when it expired in December.
The books division saw growth in the Van Schaik businesses due to non-book product sales and increased government bursary funding, while Exclusive Books was impacted by the shift to e-books in the fiction category.
Avusa had incurred transaction costs of R10m in connection with the Times Media scheme of arrangement following the buyout. This figure excluded Times Media’s costs.
Cancellation of the Avusa share incentive plan resulted in an accounting profit of R14m.
Abdul Davids, the head of research at Kagiso Asset Management, said: “We think that there are still significant synergy benefits to be gained from the Universal and Hirt and Carter businesses acquired by [Times Media]. Additional value can also be extracted from further internalisation of the [Times Media] media division’s printing requirements.”
Times Media appointed Kuseni Dlamini as independent non-executive chairman and Mark Basel as independent non-executive director.