Clear list­ing sig­nal?

Funds could be raised for African ex­pan­sion

Finweek English Edition - - Companies & Markets - MARC HASEN­FUSS march@fin­week.co.za

IS IT TIME – notwith­stand­ing cur­rent mar­ket con­di­tions – for Hosken Con­sol­i­dated In­vest­ments (HCI) to con­sider a sep­a­rate list­ing on the JSE for its free-to-air tele­vi­sion sub­sidiary, e.tv?

In the year to end March 2009, e.tv again per­formed solidly (un­like the shabby per­for­mance de­liv­ered by the SABC) with gains in mar­ket share in tele­vi­sion ad­spend as well as view­er­ship.

Com­men­tary on HCI’s re­sults high­lighted the fact that a key part of e.tv’s strong

While qual­ity new list­ings like BAT and Vo­da­com have re­ceived warm re­cep­tions, most mar­ket watch­ers would ar­gue that the cur­rent in­vest­ment cli­mate would not be the best time to list Sabido – es­pe­cially when per­for­mance could be im­pinged by a down­swing in the ad­spend cy­cle.

But Fin­week be­lieves there’s merit in HCI (and Ven­Fin, which holds a sig­nif­i­cant mi­nor­ity in­ter­est in Sabido) con­tem­plat­ing list­ing its me­dia as­sets.

For one thing, Sabido is a great as­set that cur­rently plays sec­ond fid­dle to HCI’s size­able gam­ing and leisure as­sets – and as such is per­haps not fully recog­nised by the mar­ket.

There’s also the ‘looking good’ fac­tor to con­sider, with e.tv shap­ing up as a slick and prof­itable me­dia ma­chine – thanks largely to what has tran­spired – both fi­nan­cially and strate­gi­cally – at the SABC of late.

In ad­di­tion, Sabido – pre­sum­ing that both HCI and Ven­Fin still want to hold mean­ing­ful stakes in the com­pany – could use a list­ing to raise fresh fund­ing. Nat­u­rally this fund­ing could come in very handy in the start-up phase for e-News, but more im­por­tant in sup­port­ing Sabido’s ex­pan­sion into African mar­kets.

Sabido has pur­sued po­ten­tial in­vest­ments in free-to-air tele­vi­sion and ra­dio broad­cast­ing in var­i­ous African coun­tries. At last count Sabido was in the process of ac­quir­ing in­ter­ests in West Africa and other parts of the con­ti­nent. show­ing was the per­for­mance of the oneyear-old e-News chan­nel.

HCI CEO Johnny Cope­lyn notes that while e.tv took some five years to be­come prof­itable, it’s ex­pected that e-News will turn pos­i­tive in the near fu­ture.

It seems, though, that start­ing up e-News did not weigh too heav­ily on the con­tin­ued growth in HCI’s me­dia busi­nesses.

In the year to end March 2009, HCI’s me­dia in­ter­ests – held in 63% held Sabido – lifted rev­enues 20% to R1,5bn with pre-tax prof­its com­ing in slightly higher at R466m (last year R459m).

Sabido’s other in­ter­ests in­clude e.sat, Vi­ame­dia, YFM, Sasani Stu­dios, a 42,5% stake in the Cape Town Film Stu­dios as well as a 49% in­ter­est in the Gaborone Broad­cast­ing Com­pany.

Dur­ing the year e.sat, a 100% sub­sidiary of Sabido, was awarded a satel­lite pay-TV li­cence.

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