Times Media back in the black
TIMES Media Group, previously Avusa, has made progress in diversifying its revenue stream in the latest financial year, but says this will only start benefiting the group over the next two years.
DIVERSIFIED media company Times Media Group, previously Avusa, has made progress in diversifying its revenue stream in the latest financial year but says this will only start benefiting the group over the next two years.
The group reported on Tuesday it had swung back into profit in the year ended June after a loss in the previous year as the group cut personnel and costs, with expenses during retrenchments coming to R20m.
The media group, owners of titles such as Business Day and Sunday Times, lifted diluted head-
The hard work done on changing the culture of the group to be more entrepreneurial has had a positive effect
line earnings per share for the year ended June 2014 to 187c from a 15c loss in the previous year.
A final gross dividend of 35c a share was declared.
An analyst, not wishing to be named, said the results looked quite complicated at first glance due to the extent of discontinued operations. “It is difficult to judge, with management indicating there is still some time to go before the real benefits of the restructuring process will be reflected in the results.”
The media division, now the largest English-language daily newspaper publisher in SA, lifted earnings before interest, taxes, depreciation, and amortisation (Ebitda) by 8% to R182m with retail solutions increasing 11% to R191m. The group’s investments in radio stations have started to make a greater profit contribution of R42m from a previous R7m, but is still clearly a smaller contributor compared to the media division.
The group repaid a further R406m of acquisition finance incurred after the Blackstar group obtained effective operational control in August 2012, leading to an extensive reorganisation and sell-off programme. This means that long-term debt has now been reduced to R292m from about R1bn earlier.
CEO Andrew Bonamour said the group had completely turned around the home entertainment, Gallo Music and CD manufacturing businesses, which were all showing profits after many years of losses. Entertainment Logistics Services and Associated Music Distributors were closed down, with working capital consequently released.
“Our philosophy is based on a focus on return on capital employed, rational allocation of capital and a tightly controlled costs base,” he said.
The past year has seen a significant expansion of Times Media’s broadcasting interests in Africa. The acquisition of a 32.3% stake in Ghana’s Multimedia in September 2013 was followed this year by the purchase of a 49% stake in Kenya’s Radio Africa Group on June 30.
The group has made some improvement in the cost basis but the overall cost in sales still came
Our philosophy is based on return on capital employed, rational allocation of capital and a controlled costs base
in higher at R2.9bn from R2.7bn. But operating costs were slashed from R766m to R644m.
Discontinued operations included the selling of property, I-Net Bridge, Map Studio and Van Schaik Bookstores, delivering a profit of R172m.
Mr Bonamour said the group would continue to work hard on African investments. Several new initiatives have been launched to benefit the group in terms of longterm growth and sustainability.
“The hard work done on changing the philosophy and culture of the group to be more entrepreneurial has had a positive overall effect on the group,” Mr Bonamour said.
The Times Media Group share has been climbing steadily from a low of R12 in 2013. It has since traded at about R20 and was up 1.20% at R21 on small volumes in the late afternoon on Tuesday. It is trading at a price:earnings ratio of 15 and a market cap of R2.6bn.