MultiChoice Experiences 13% Subscriber Drop in Rest of Africa, Focuses on Retention

In a year marked by economic headwinds, MultiChoice Group has reported a resilient operational performance for the financial year ending March 2024. Despite challenging macro-economic conditions, the Group maintained a robust trading profit margin of 26% in South Africa and achieved a 48% increase in trading profit across its operations in the Rest of Africa. These results underscore MultiChoice’s strategic execution and commitment to building a leading entertainment and digital services platform in Africa.

Financial Highlights and Operational Resilience

Despite a challenging consumer environment, the Group’s financial resilience was evident in several key areas:

  • Subscriber Base: Overall, active subscribers declined by 9%, reflecting a 13% drop in the Rest of Africa, most notably in Nigeria, Angola, and Zambia, while South Africa experienced a smaller decline of 5%.
  • Group Revenue: On an organic basis, revenue increased by 3%. However, weaker local currencies led to a reported decline of 5%, bringing total revenue to ZAR56.0 billion.
  • Subscription Revenues: These grew organically by 2%, though a weaker Naira caused a 7% decline on a reported basis.
  • Trading Profit: The Group saw a 24% organic increase in trading profit, despite a substantial investment in Showmax. The reported trading profit, affected by foreign exchange losses, decreased by 21% to ZAR7.9 billion.
  • Cost Management: Effective cost-saving measures, including reductions in decoder subsidies and operating expenses, helped achieve positive operating leverage of 4.3%.
  • Free Cash Flow and Liquidity: Free cash flow was ZAR589 million, with significant liquidity maintained through ZAR7.3 billion in cash and access to ZAR4.1 billion in undrawn borrowing facilities.

Strategic Growth and Diversification

During FY24, MultiChoice made significant strides in diversifying its business portfolio. The Group successfully launched several new revenue-generating ventures, including Showmax 2.0, SuperSportBet, and Moment. These platforms are integral to MultiChoice’s long-term strategy of expanding its ecosystem beyond traditional video entertainment into interactive entertainment and financial technology.

“Four years after setting out to build Africa’s entertainment platform of choice, our three core segments are now fully operational. Our focus shifts to leveraging these foundations to drive growth and enhance efficiency across our operations.”

Calvo Mawela, MultiChoice Group CEO

MultiChoice will focus on scaling its new ventures—Showmax, Moment, and SuperSportBet—while driving cost efficiencies with a target of ZAR2 billion in savings.

Segment Performance Review

South Africa Pay-TV: The South African segment demonstrated resilience, with active subscribers declining only by 5% to 7.6 million households. Strategic retention initiatives and cost-saving measures helped mitigate the impacts of economic pressure and frequent power outages.

Rest of Africa Pay-TV: Facing severe economic challenges, including high inflation and currency depreciation, the Rest of Africa segment focused on profitability over subscriber growth. Cost-cutting initiatives and reduced decoder subsidies bolstered a 48% increase in trading profit to ZAR1.3 billion.

Showmax (SVOD): FY24 was transformative for Showmax, relaunching on a new platform across 44 markets. Despite increased investment, Showmax grew revenues by 22% and continued to enhance its local content offerings across multiple African markets.

Irdeto: The technology arm of MultiChoice, Irdeto, saw a 17% revenue increase, driven by its leadership in video security services and new ventures in connected transport solutions.

KingMakers (Sports Betting): KingMakers experienced robust growth in Nigeria’s online betting market, with new product launches and strategic partnerships, including the launch of SuperSportBet in South Africa.

Moment (Fin-Tech): Launched in FY24, Moment quickly established itself in the payment processing sector, contributing significantly to the Group’s financial ecosystem by supporting Showmax and DStv transactions.

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