South African media and entertainment group Johnnic Communications lifted headline earnings by 129% from R177-million to R406-million for the year ended in March.
This translates into headline earnings per share of 390 cents compared with 170 cents the previous year, which exceeded the I-Net Bridge consensus forecast of 279,5 cents.
The performance came as no surprise to the market, however, as the group had advised in a recent trading update that it was expecting earnings to increase from between 125% and 135%.
No dividend was declared for the year. The group said the decision is primarily an issue of timing and will be reviewed at the half year stage.
“In the interim, given the increase in Johncom’s shareholder base to more than 23 000 following the Johnnic Holdings Limited unbundling in March 2005, the board has resolved to undertake an odd lot offer, and a further announcement in this regard will be made to shareholders shortly,” it stated.
The stellar performance by the group for the year saw its share price up by 4,17% or 4,50 to R37 a share just after the announcement. However, it was at R38 a share before the announcement.
Revenue for the year increased by 52% to R4,113-billion. Profit from operations before exceptional items rose 246% to R394-million.
Johncom said its media division had had a stellar year, increasing advertising market share, and enjoying strong circulation revenue growth.
“Whilst all titles benefited from an upswing in the advertising market, the Sunday Times had an exceptional year, following a successful redesign
which included the addition of Travel and Food and New York Times sections to the package.
“The Eastern Cape titles, Daily Dispatch and The Herald, continued to benefit from extensive restructuring in the previous financial year and enjoyed strong growth under the direction of new editors and restructured
sales teams.
“The Sowetan and Sunday World titles were successfully integrated into the Johncom media division with the Sowetan enjoying a robust circulation increase and contributing positively to profits. Sunday World continued to entrench itself in the challenging Sunday market and can look forward to improved results under the new management team. The digital businesses enjoyed phenomenal growth enabling them to contribute to profit from operations.
“BDFM had a good year with Business Day and Financial Mail showing increased advertising volume year on year.”
The group’s retail operations enjoyed improved retail trading conditions and a stronger operational focus on quality of earnings, in addition to an R8-million benefit in respect of a reduced post- retirement medical aid liability. Exclusive Books delivered growth in sales on last year, despite what the group referred to as a deflationary book environment locally and a flat book market worldwide.
Attendances at Nu-Metro Theatres also increased — in large part due to the Bollywood initiative.
M-Net/SuperSport’s pay television business, proportionately consolidated for the first time, made a solid contribution to the overall results.
The Gallo Music Group had a good year with a turnaround in the local business and continued growth from international labels.
“Although the music industry is going through major changes in the digital environment, the group is well placed to take advantage of new technology formats.”
The Africa division continued its roll-out of projects in Nigeria, Ghana and Kenya during the year under review amid challenging conditions. A two-screen Nu Metro cinema was opened and is trading successfully in Nairobi, Kenya. Two more cinema sites are planned to open in Nigeria.
Looking ahead, Johncom said the sale of non-performing businesses has been addressed and the corporate restructuring has been completed. “The organisation is now positioned with a platform to deliver sustainable earnings into the future.
“The board is currently working with professional advisors to ensure that an appropriate black economic empowerment shareholding is achieved in the short term,” it added. – I-Net Bridge