South African media group Caxton and CTP Publishers and Printers (Caxton) reported a 15,6% increase in diluted headline earnings per share from 64 cents to 74 cents for the year ended June.
The group on Tuesday said it has declared a dividend of 35 cents per share compared with 30 cents for the previous comparable period.
The group’s revenue increased by 8,1% to R3,056-million from a previous restated R2,875-million.
Net income from operating activities at R414,3-million was up by 31% and equates to a trading margin of 14,2%.
“The major capital expenditure programme, which commenced some years ago, has now been completed and an amount of approximately R236-million was expended during the year.
“Investments will now diminish and an expenditure of only around R100-million is anticipated next year as further projects are undertaken where there is a requirement to keep up with changes in technology and to replace plant where appropriate,” the group said.
The group ascribed the positive results to its newspaper interests where it said growth ahead of industry average has been achieved by the community and regional newspapers.
Other factors the group cited are the fall in the South African Reserve Bank’s repo rate and the reassessment of the useful life of plant and machinery, which necessitated a change in depreciation rates.
The decrease in the repo rate had the effect of reducing finance income by nearly R40-million and the resultant charge to the income statement of almost R80-million was a more accurate measure of the extent of the depreciation of the group’s assets for the period under review, Caxton said.
“Consumer spending increased appreciably, mainly as a result of the substantial decrease in the cost of financing debt, and continues to maintain the same momentum. This has had a concomitant benefit in the level of spending on advertising by the major retailers and packaged goods manufacturers.”
Advertising spending in community and regional newspapers rose by 68%.
The group disclosed that an overseas magazine is to be launched next year.
Looking ahead, Caxton said: “There can be no doubt that the substantial reduction in interest rates, where a further half-percent decrease has just occurred, has led to an increase in consumer spending. This bodes well for the forthcoming year, but has to be tempered by the probability of the rate of inflation picking up and interest rates increasing next year.”
The group added that the future of the rand is unknown, but the currency has a major impact on the performance of the group.
“Advertising spend is currently buoyant and taking all factors into account, further satisfactory growth should be achieved albeit at not quite the level of improvement achieved this year. The continuing involvement of the Johnnic Communications shareholders and executives will also play a pivotal role in looking forward.” — I-Net Bridge