Big media groups performed well despite the tough trading environment, in which advertising revenue continued to shrink.
Primedia is the current star performer, with a net profit increase of 39,4%, followed by Caxton with 31,3% and Naspers with 21%. Johncom's Ebitda (earnings before interest, tax, depreciation and amortisation) fell by 23%.
Primedia's net operating profit was up to R132,7m and headline earnings per share up 396% to 32,1c. These results reflect a good performance from its SA operations and the positive spin-offs from the disposal of loss-making international businesses.
"We are excited about the group's growth prospects," says Primedia CEO William Kirsh. "All our businesses are market leaders and have the necessary critical mass, which places them in a strong position to benefit from the expected continued upswing in trading conditions."
Revenue from continuing group operations increased by 15,1% to R898m, while SA operations grew revenue by 16,4% to R873m.
In an effort to enhance its local media portfolio, Primedia acquired Nail's broadcasting assets, worth about R218m. These include regional radio stations, advertising company Nail Outdoor and Nail's minority stake in Gauteng-based Kaya FM.
Caxton's turnover increased by 17,3% from R2,225m to R2,6m, while net profit from operations amounted to R316m compared with R241m the previous year. The group attributed a large portion of its success to its newspaper interests, where it is active in the community and regional sectors. Net profit from operations, as a margin on turnover, has improved from 9,4% to 10,1%. Interim results in September 2003 showed diluted headline earnings per share, after taking into account the number of shares over which options still exist, up from 47c to 64c, a remarkable increase of 36,2%.
The Naspers group made progress during the six months ended September 30 2003, with revenue more or less stable at R5,6bn and operating profit before amortisation at R596m. Group chairman Ton Vosloo said headline earnings from operations amounted to R148m, compared with a R96m loss in the equivalent period last year.
The group had net consolidated cash resources of R1,6bn and interest-bearing liabilities of R900m. Its newspaper and magazine businesses grew revenues by 15% and operating profits before amortisation by 21%.
Johncom's overall performance for the first six months was mixed, with revenue from ongoing operations up by 3% to R1,26bn (2002: R1,23bn), while Ebitda from ongoing operations dropped by 23% to R64m (2002: R83m).
Johncom CEO Connie Molusi says that, traditionally, the second half of the year delivers most of the group's revenue and earnings. The decline in Ebitda, he says, was largely due to lower advertising revenues earned in the first quarter of the year at Sunday Times, Business Day and the Financial Mail, and timing of product releases through the Home Entertainment and Nu Metro Distribution units. He adds that costs have been incurred in pursuit of ventures related to the group's African strategy.
The R44m net exceptional profit accrued from the sale of MTN and Naspers shares was offset, Molusi says, by the closure costs of Hammicks Bookstores and the provision for certain nontrading Nu Metro cinema theatre complexes.
Johncom's fortunes are expected to change soon as a result of its recent acquisition of the Sowetan and 50% of the Sunday World. Johncom already owns the other 50% of Sunday World. But this transaction is still subject to the approval of the competition commission.
Molusi says the acquisition of the Sowetan and Sunday World titles is in line with Johncom's goal of growing its media assets and becoming a seven-day publishing operation.
The group's stable of major titles contains the Sunday Times, 50% of Business Day and the FM, the Daily Dispatch in East London and the Herald in Port Elizabeth.
