Kagiso Media said on Monday that it has recorded headline earnings per share of 78,7 cents for the 12-month period ended June this year. This represented a 13,3% increase in headline earnings per share from 69,5 cents reported last year.
The group declared a final dividend of 44 cents per share. This brings to 86 cents the dividend for the year from the previous 80 cents — or a 7,5% growth in the dividend.
The listed media company also reported that its revenue steamed ahead to R527,031-million during the period under review, from R297,503-million in 2004, while profits from operations surged 89,8% to R185,087-million.
Kagiso this year financed its acquisitions through debt and was able to maintain a strong flow of dividends to shareholders. The purchase price for an additional 17,5% in Jacaranda 94.2 radio station was R59,9-million and was settled in cash. A further 15,8% of RadMark was acquired.
The firm, whose portfolio includes advertising, exhibition and radio interests, said the increase for the year ended June brings to 20% the annually compounded growth rate in headline earnings per share over the past five years. This, Kagiso said, is a clear indicator of its consistent performance and growth.
Revenue grew by 21,5% over the comparative period if the effect of the acquisition of control of Jacaranda and RadMark is excluded from the result for the period. This performance was driven by revenue growth of 13% at East Coast Radio, 19% at LexisNexis Butterworths and 51% at Kagiso Exhibitions.
“Despite strong trading conditions during the reporting period, radio as a medium only managed to grow revenue by 11,5% over the comparative period, against the estimated growth in television advertising revenues of more than 20%. This is due in part to aggressive discounting by television, which has made the medium more affordable to many advertisers,” the company said.
More advertisers and retailers experiencing strong trading conditions are currently able to afford advertising on TV, often at the expense of radio, the firm whose other interests are P4, OFM and Kaya FM asserted.
“We believe that this trend will reverse, as the current strategy of aggressive discounting by television is not sustainable, especially since the medium is already oversold in certain time channels.”
The group said its radio stations are not as exposed as many others in the industry to the impact of the current shift of advertising spend from radio to TV.
The company is thus confident that the broadcasting assets will again outperform their peers, it said.
“Overall, Kagiso Media is thus poised for another strong showing in the 2006 financial year. The group generates strong cash flow and will be able to service its debt commitments comfortably, while sustaining a healthy dividend to shareholders,” the black-owned firm stated. — I-Net Bridge