MultiChoice Group recorded solid financial results for the year ended March 31, 2020 (FY20). Highlights include 38% growth in core headline earnings to R2.5 billion ($145 million), with consolidated free cash flow increasing by 59% to R5.2 billion ($303.6 milliom), driven mainly by an improvement in the trading results from the Rest of Africa (RoA), a focus on cost containment and a reduction in working capital.
“We are certainly facing unprecedented times but are pleased with our performance and the resilience we have demonstrated this year,” says Calvo Mawela, the MultiChoice Group CEO. “Our healthy balance sheet positions us well to weather the uncertainties in our markets going forward. We have also honoured our commitment to shareholders by declaring a maiden dividend of R2.5 billion, on top of some R1.7 billion in share buy-backs executed during the year.”
MultiChoice added about a million (900,000) new 90-day active subscribers, representing 5% growth year-on-year (YoY). This took its overall subscriber base to 19.5 million households, split between 8.4 million households in South Africa and 11.1 million households in the RoA.
Revenue was up 3% to R51.4 billion ($2.98 billion) and included R42.8 billion ($2.5 billion) in subscription revenue which increased 4% YoY. Top line momentum was affected by modest subscriber growth due to rising consumer pressure, a decision not to increase prices of its Premium package in South Africa, and the fact that last year’s growth benefitted from specific once-off events. Nonetheless, a strong focus on cost containment underpinned a 14% increase in trading profit to R8.0 billion ($464 million), with some R1.4 billion (81.2 million) in cost savings generated during the year and a R800 million ($46.4 million) reduction in losses in the RoA.
The South African unit delivered a subscriber growth of 6% YoY or 0.5 million subscribers on a 90-day active basis, mainly attributed to lockdown measures imposed to control the spread Covid-19 pandemic which lead to a rise in subscribers towards the end of March.
The RoA business grew its 90-day active subscriber base by 4% YoY or 0.4 million subscribers, pushing the Group’s overall number of customers in markets outside of South Africa to 11 million subscribers for the first time.
Revenue was up 4% to R15.5 billion ($899 million), with subscription revenue growing at a similar rate and contributing R14.3 billion ($829.4 million).
“Despite challenging conditions, the RoA business still enjoyed several operational successes. Across many markets the Festive Season campaigns achieved higher growth than in any of the preceding 8 years, and the popular #DStvStepUp campaign served well to win back customers and increase engagement. The roll out of digital products to enhance customer service is now complete in all major markets, with the MyDStv and MyGOtv apps servicing 1.3m monthly users,” noted the group in its financial results statement.
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