In results for the year to March, MCG reported a 12percent increase in its subscriber base to 15.1million - 1.6million of that from the rest of Africa. The group grew revenue by 6 percent year-on-year to R50.1billion and trading profit by 11percent, or 27percent organically, to R7bn.
It said this was underpinned by solid subscriber growth, as well as an ongoing focus on cost containment. Core headline earnings, the board’s measure of sustainable business performance, was up 10percent to R1.8bn and consolidated free cash flow doubled to R3.3bn.
“We like to position it as a solid performance, we just hope it is not the pinnacle of our achievements,” group chief financial officer Tim Jacobs said in an interview yesterday, stressing this year marked the first time the rest of Africa subscriber base of 7.7million exceeded the 7.4million households in South Africa.
Sustained efforts to grow the Connected Video segment and position the business for the future, resulted in good uptake in Showmax and DStv Now services - as a result, (OTT) subscribers doubled year-on-year. MCG increased its spending on local content (excluding sport) as a percentage of total general entertainment spend to 40percent, in line with its target of 45percent by the financial year 2022.
The group over the past year added a further 4600 hours to take the local content library to nearly 50000 hours. It produced 20 new local dramas.
Battle lines have been drawn with the Independent Communications Authority of South Africa (Icasa) over the regulation of the industry which MCG is opposing on the basis that other OTT platforms are immune from regulation, while Icasa is concerned about the group’s dominance over the market.
Jacobs said MCG had asked Icasa to define its position regarding the broadcasting of sports and the review to broadcasting in totality.
“There have been unanimous objection to Icasa, what they are proposing is simply unworkable. We hope they take the objections on board. They have erred in their ways of looking at the market,” Jacobs said. The stand-off awaits Icasa’s brief on the market determination.
Jacobs said while the OTT market was heating up with providers such as Cell C and Vodacom reporting traction, there were providers such as Netflix, Amazon and YouTube among others who fell outside of Icasa’s scope.
“Competition in the OTT space is heating up. What Icasa proposes to do is a threat to the local broadcasting market,” Jacobs said.
Multichoice shares closed 2.19percent higher at R130.80 yesterday.