Media and entertainment group Primedia reported a 421% leap in headline earnings per share from 14 cents to 73 cents per share for the six months ended December.
It said this was due largely to a one-off black economic empowerment (BEE) charge of 49 cents per share expensed in the prior year.
”The group has performed relatively well,” said chief executive William Kirsh.
Brands owned by Primedia include Ster Kinekor, Forecourt media, 94.7 Highveld Stereo and Kaizer Chiefs.
Normalised headline earnings per share were up 16% from 63 cents to 73 cents.
Group revenue increased by 10% from R1,3-billion to R1,4-billion. Primedia said that, given the operating leverage inherent in the group, earnings before interest, tax, depreciation and software amortisation (Ebitda) growth almost doubled that of the growth in revenue, rising 19% to R329-million with Ebitda margins rising from 21,6% to 23,3%.
PBIT before share-option expenses was up 18% to R285,8-million (2005: R243-million), with PBIT margins increasing from 19% to 20,3%.
Operating profit increased by 106% to R276-million (2005: R133,7-million) due to the increase in PBIT as well as the IFRS 2 charge in 2005 of R108,4-million relating to the group’s BEE transaction.
Due to the group’s continued strong cash flow, net interest expense of R22,1-million was marginally lower than the prior year’s figure of R24-million.
Interest cover remained a very high 12,9 times (2005: 10,1 times).
Profit before tax increased by 131% to R253,8-million (2005: R109,7-million).
Profit from continuing operations increased by 255% to R177,2-million (2005: R49,9-million) due to the aforementioned, offset in part by a higher tax rate and tax charge in the current year.
The group said that in light of the anticipated offer from the MIC/Kirsh consortium, an interim cash distribution for the six months ended December 31 last year will be made only in the event that the MIC/Kirsh consortium does not submit a firm intention to make an offer.
”Consequently, should Primedia be notified by the MIC/Kirsh consortium that it does not intend to submit a firm intention to make an offer, it is anticipated that an interim cash distribution out of share premium for the six months ended December 31 2006 of 50 cents per share (2005: 40 cents per share), in lieu of dividends, will be awarded to ordinary and N ordinary shareholders,” it added.
But the group announced that a preference dividend of 459 cents for the period ending April 2 this year (2006: nil) had been declared and would be payable to holders of non-redeemable, cumulative, non-participating preference shares recorded in the books of the company on Friday March 30 this year.
Looking ahead, Primedia said that consistent with prior reporting periods, the group is likely to generate a lower level of earnings in the second six months relative to the first six months, although real earnings growth is anticipated for the full year. — I-Net Bridge, Sapa