Profits at AME hit by new assets

African Media Entertainment (AME), which owns Algoa FM and other media assets, says acquisitions dragged down profits for the year ended March.

African Media Entertainment (AME), which owns Algoa FM and other media assets, says acquisitions dragged down profits for the year ended March.

Net income shrank 2% to R47.7m even as revenues rose 10% to R262.5m.

“Low business confidence and the restructuring process of our acquisitions resulted in demanding trading conditions, placing further strain on our resources,” AME said.

The fall in profits was mainly because of losses at radio station Classic 1027 and online business news platform Moneyweb, as well as acquisition costs.

In August 2017, AME bought Moneyweb, using R9.4m in cash and new shares. In December, it bought a stake in Classic 1027 for R7m.

The group said it was in the process of “turning the lossmaking station [Classic 1027] around, partly by re-establishing the collaboration between Classic 1027 and Moneyweb”.

AME said it expected trading conditions for the 2019 financial year “to remain challenging while turning our two acquisitions around”.

The group said it would focus on innovation and cost controls.

It said Algoa FM had “another successful year” to March, with revenues up marginally.