MultiChoice Group, a JSE-listed company, has recently released its financial results for the year ending on March 31. The company’s CEO, Calvo Mawela, reported a significant decrease in the number of active subscribers and revenue, with an overall decrease of 9% in active subscribers. This decline was primarily attributed to a 13% decrease in the ‘rest of Africa’ business, affecting countries like Nigeria, Angola, and Zambia, while the South African business only saw a 5% decline.
Notably, French media giant Canal+ is considering a takeover of MultiChoice in a deal worth R30 billion, highlighting the shifting landscape of the entertainment industry. MultiChoice has been facing pressure from global streaming services such as Netflix, Disney+, and Amazon Prime, leading to a decline in subscriber numbers over the years.
Despite these challenges, MultiChoice reported a 26% trading profit margin in South Africa and a 48% increase in trading profit in the rest of Africa. The company achieved strategic milestones with the successful launch of Showmax 2.0, SuperSportBet, and Moment, all of which are now generating revenue and supporting future growth.
Mawela emphasized the company’s focus on building Africa’s entertainment platform of choice and expanding services to support a broader ecosystem. He praised the team for implementing strategic actions to retain customers, generate cash, and drive cost savings, showcasing confidence in the company’s potential for growth.
On a financial note, group revenue increased by 3% organically, but reported revenue declined by 5% to R56 billion due to weaker local currencies and consumer pressure. Even with a 24% increase in trading profit on an organic basis, reported trading profit declined by 21% to R7.9 billion after factoring in foreign exchange impacts.
Despite challenges, MultiChoice managed to limit the decline in active subscribers in South Africa to 5%, reaching a base of 7.6 million households. The company also highlighted the impact of power outages on potential subscribers without backup power.
In conclusion, MultiChoice remains focused on retention efforts and expanding revenue streams to navigate the challenging macroeconomic conditions in its core markets. The company’s strategic initiatives and investments in new services demonstrate a commitment to driving growth and enhancing business efficiency.
(Source: Historic Media Articles, Financial Reports)
