BrandArena: MultiChoice Achieves Strong Performance and Expands Platform Despite Economic Challenges

Wednesday 12 June 2024

MultiChoice Achieves Strong Performance and Expands Platform Despite Economic Challenges

MultiChoice Group has released its operational performance report for the fiscal year ending March 2024 (FY24) revealing that the media giant achieved a 26% trading profit margin in South Africa and a 48% increase in trading profit in the Rest of Africa, despite challenging macro-economic conditions. The Group reached significant strategic milestones, successfully launching Showmax 2.0, SuperSportBet, and Moment, all of which are now generating revenue and bolstering the group’s future growth prospects.

"Four years after establishing a clear strategy to become Africa’s premier entertainment platform and investing in services to support a broader ecosystem, our three core segments are now fully operational: video entertainment, interactive entertainment, and fintech. Our focus now shifts to building on these solid foundations to drive growth in these new areas, and further enhancing business efficiency across our operations.

While we are not alone in facing the challenges of a weak consumer environment, I am proud of the speed and effectiveness of the team in implementing strategic actions to retain customers, safeguard cash generation, and achieve cost savings that surpassed our targets. It is the strength of this team, the quality of the underlying business, and the clarity of our strategy that underpins my confidence in delivering on our potential,” said Calvo Mawela, MultiChoice Group CEO.

Key highlights from the past financial year include:

Subscriber base: Given the challenging consumer environment, overall active subscribers declined by 9%. This was mainly due to a 13% decline in the Rest of Africa business, with Nigeria, Angola and Zambia most affected, while the South African business was more resilient, declining by only 5%.   
Group revenue: increased by 3% on an organic basis. However, due to weaker local currencies and consumer pressure, reported Group revenue declined by 5% to ZAR56.0bn.
Subscription revenues: grew by 2% on an organic basis. However, on a reported basis, subscription revenues declined by 7% due to a weaker Naira.
Group trading profit: increased 24% on an organic basis, despite the additional ZAR1.4bn investment in Showmax to drive future growth. After factoring in the ZAR4.5bn impact related to foreign exchange weakness, reported trading profit declined by 21% to ZAR7.9bn.
Positive operating leverage: Given the positive impact of the lower expenditure (including ZAR1.9bn in cost savings and ZAR1.5bn in reduced decoder subsidies), the group achieved positive operating leverage of 4.3% (i.e. a 3.3% organic revenue increase against a 1% organic reduction in operating expenses).
Adjusted core headline earnings: Higher realised hedging gains and benefits from a narrower gap between official and parallel Naira rate, was more than offset by the weaker trading profitability, resulting in adjusted core headline earnings (which now includes losses on cash remittances after tax and minorities) decreasing by 20% to ZAR1.3bn.
Free cash flow: amounted to ZAR589m, impacted by lower profitability and the  ZAR1.7bn in Showmax platform payments.
Retained cash and cash equivalents: ZAR7.3bn in cash (before short-term commitments) and access to ZAR4.1bn in undrawn borrowing facilities provides significant headroom and flexibility to fund opportunities.
MultiChoice is by far the largest producer of original content on the African continent. In FY24, the group again produced over 6 500 hours of local content and its local content library now has more than 84,000 hours of content, a 12% increase YoY.

Download full report here:

The highlight for the year was Shaka Ilembe, which launched on Mzansi Magic in June to become Africa’s biggest TV series. Filmed entirely on location in South Africa, it was created through the skills and contributions of over 8 000 people. The premiere episode attracted over four million viewers and was the top-performing show with an audience share of over 45% in its time slot.

Other content highlights of the year was Reyka (season 2), Devil’s Peak and White Lies on linear (co-produced with Fremantle, Canal +, Abacus Distribution and BBC Studios-owned Lookout Point) and Spinners, Original Sin: My Son The Killer, and Catch Me a Killer, on streaming. Across Africa, the group launched 3 new proprietary channels - in Ethiopia (Maaddii Abol), Uganda (Pearl Magic Loko) and Mozambique (Maningue Magic Kool) while also producing content in Africa’s 4th most spoken language, Oromo.

SuperSport broadcast 34 490 live events during the year – arguably more live sport than any other broadcaster in the world. Highlights included the Rugby World Cup in France, the Cricket World Cup in India, a second  SA20 season in South Africa, AFCON, FIFA Women’s World Cup in New Zealand and Australia, as well as the Netball World Cup in Cape Town.

SuperSport Schools more than doubled its registered user base during the year. The fast-growing platform displayed more than 49 000 hours of live programming across 43 different sports codes, covering 900 school sport festivals and events, featuring more than 1 100 schools, and over 14 500 teams.

No comments:

Post a Comment