Multichoice Group Navigates Economic Challenges, Reports Positive Trading Performance Amid Showmax Investment

Despite economic headwinds, Multichoice posts encouraging results; expects 7-12% higher trading profit organically.

Multichoice Group has announced that it is in the final stages of consolidating its interim financial results for the six months ending on September 30, 2023. Despite facing adverse economic and exchange rate conditions, the company managed to deliver positive trading results organically, attributing this success to effective management strategies.

The management’s focus on pricing, cost discipline, subscriber retention, and a better customer mix contributed to the favorable trading performance on an organic basis. However, the increased investment in Showmax ahead of its anticipated relaunch in the second half of FY24 impacted the reported results negatively.

The board considers trading profit and core headline earnings per share as key indicators of the group’s operating performance. Despite additional Showmax costs and a 16% increase in local content investment, organic trading profit is expected to be 7% to 12% higher than the prior period. However, on a reported basis, taking into account weaker currencies, trading profit is expected to be 16% to 21% lower than the previous period.

Multichoice Group expects core headline earnings per share for the current period to be 3% to 8% lower than the prior period, considering realized foreign exchange gains and losses. The introduction of adjusted core headline earnings, including losses on cash remittances from Nigeria, is aimed at addressing the ongoing disconnect between official and unofficial exchange rates. Adjusted core headline earnings per share is expected to be 22% to 27% higher than the prior period.

It’s important to note that the pro-forma financial information provided is for illustrative purposes, and organic trading profit, core headline earnings per share, and adjusted core headline earnings per share are calculated based on specific criteria outlined by the JSE Limited Listings Requirements. The company emphasizes the responsibility of the directors in preparing this information, highlighting its pro-forma nature that may not fully represent the group’s financial position, changes in equity, cash flows, or results of operations.

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