MultiChoice shareholders have reason to smile all the way to the bank
JOHANNESBURG – MultiChoice on Monday sent its shareholders smiling all the way to the bank after soaring nearly 10 percent on the declaration of a maiden gross dividend of 565 cents a share for the year to the end of March.
The entertainment group, which was spun out of Naspers in February last year and listed separately, said its revenue rose 3 percent to R51.4 billion, with subscriptions contributing a bumper R42.8bn on a 4 percent increase year on year.
MultiChoice said core headline earnings surged 38 percent to R2.5bn. Free cash flow increased 59 percent to R5.2bn, driven mainly by an improvement in the trading results from its operations in the Rest of Africa (RoA), a focus on cost containment and a reduction in working capital.
The group added 900 000 90-day active subscribers, representing 5 percent growth year on year.
It said its overall subscriber base increased to 19.5 million households, split between 8.4 million in South Africa and 11.1 million in the RoA.
Chief executive Calvo Mawela said the group’s balance sheet remained healthy and resilient during the year.
“Our healthy balance sheet positions us well to weather uncertainties in our markets going forward. We have honoured our commitment to shareholders by declaring a maiden dividend of R2.5bn on top of some R1.7bn in share buy-backs executed during the year,” Mawela said.
The group’s share closed 8.48 percent higher at R102.62 from Tuesday’s closing price of R94.60.
MultiChoice said its operations in South Africa held up well in a tough consumer climate, delivering subscriber growth of 6 percent year on year, or 500 000 subscribers on a 90-day active basis.
It said local revenue rose 1 percent to R34.2bn, while trading profit increased only 1 percent to R10.3bn, due to modest revenue growth and the cost impact of broadcasting three major sport events in the reporting period.
It said the RoA segment grew its business, with a 90-day active subscriber base rising 4 percent, or 400 000 subscribers, and revenue increasing to R15.5bn, while trading losses narrowed 22 percent to R2.9bn.
The technology segment, Irdeto, reported a 12 percent increase in revenue to R1.8bn, despite being affected by Covid-19, and trading profit increased to R700 million.
Mawela said the group remained well positioned, with a sought-after product offering, significant scale, a diversified footprint across the African continent, and a robust business model with a low reliance on advertising revenue.
“We have hedging programmes in place to offset some of the currency pressures we are exposed to and a healthy balance sheet, which includes R9.1bn in cash,” Mawela said.