South African media and entertainment group Primedia on Tuesday reported a 39,7% increase in headline earnings per share to 95 cents for the year ended June 30 2005, from 68 cents a year ago.
In line with the policy of maintaining a cover of two times, Primedia resolved to pay a total distribution of 56 cents per share, which is 40% higher than in the previous year. This will result in shareholders receiving a final distribution of 34 cents in addition to 22 cents declared at the interim stage.
The distribution cover is in line with last year’s 1,7 times.
Turnover rose by 13% to R1,98-billion from R1,752-billion, while operating profit before depreciation rose by 29% to R418,9-million, which resulted mainly from an improvement in gross margins, organic growth, growth from innovations and acquisitions.
Operating margins increased from 15,1% to 18% mainly due to the growth in the higher-margin advertising businesses as well as the acquisitions.
Operating profit grew by 30,5% to R366,3-million, which was after foreign-exchange losses of R2,1-million and amortisation of intangibles of R4,7-million.
Net profit for the year increased by 22,8% to R215,6-million, partly as a result of the lower minority interest, following the purchase of an additional economic interest in 94.7 Highveld Stereo.
Cash generated by operations increased by 10,2% to R389,9-million.
The group said that given the strong rand against the dollar, a strategic decision was taken to prepay film rights amounting to $3-million when the exchange rate to the dollar was R6. This decision has turned out to be the correct one with the subsequent weakening of the rand, the company said.
Looking ahead, Primedia said its focus on the principles of building a world-class media group should continue to build shareholder value over the short, medium and long term.
Over the next 12 months, the group added that expected continued favourable economic conditions, the annualisation effect of the KFM acquisition and Primedia Unlimited Advertising acquisitions should help results.
Benefits from the recent earnings-enhancing acquisitions such as the Africa on Air minority interests, Altmedia and XProcure; benefits from the execution of the group’s five key strategic priorities for 2006; and its growth strategy should help confirm a good set of results for the 2006 fiscal. — I-Net Bridge