Headline earnings rose by 23% to R159.6 million (2007: R130.1 million) and headline earnings per share of 119.7 cents reflected an improvement of 22% (2007: 97.9 cents). The group maintained its strong cash generation trend, reporting cash from operations of R270.5 million.
“These sterling results can be attributed to strong performances of our broadcasting and information services and solution divisions,” explained CEO Murphy Morobe.
Revenue for broadcasting increased by 16% to R476.2 million as East Coast Radio and Jacaranda 94.2 maintained their ranking among the top three South African radio stations in revenue terms. The group's newer radio station investments also showed progress. In particular, iGagasi 99.5 and Kaya FM produced exceptional audience and revenue growth, signalling the growing appeal of these stations among both consumers and advertisers.
LexisNexis continued along the path of its successful evolution from publisher to information solutions provider, with reported revenue and operating profit increasing by 22%. The Africa division continued to enjoy positive growth of 51% for the period under review. In particular, the launch of the Laws and Law reports of Mauritius was well accepted and the Nigerian market delivered an excellent performance.
Kagiso Exhibitions and Events (“KEE”) posted a disappointing performance due to continuing challenging trading conditions.
Kagiso Media announced three acquisitions during the year. Acceleration Media, a leader in the local online media strategy, planning, buying and paid search environment was jointly acquired with Lagardère Active Radio International. KEE acquired a 50% interest in Mobil Alliance, which specialises in sport sponsorship and digital technology advertising. The recent acquisition of a controlling interest in Urban Brew, which is subject to approval by the Competition Commission, is intended to significantly advance the group's ambitions to develop into a multi-channel media operator.
Regarding the acquisitions, Morobe commented that “they form important building blocks in our strategy to introduce new revenue streams into our business. They provide significant diversification benefits, helping the company to mediate the cyclical fluctuations associated with our traditional dependence on advertising spend. At the same time, they extend our business model into new media channels, and more specifically visual media including online, mobile and other platforms.”
Looking forward, Kagiso Media believes itself to be well-positioned, with its broadcasting as well as its information services and solutions businesses, which are expected to continue to deliver solid growth.
The exhibitions and events business remains under review and, this notwithstanding, the group anticipates signs of recovery as cost management and the re-engineering of the business model takes hold. Coupled with the 2010 FIFA World Cup opportunities, management anticipates significant upside benefit for the exhibitions and events business.
“We will continuously evaluate our strategic delivery to ensure our ability to drive value for shareholders. While our established assets are set to maintain their strong performance, the long term potential will be unlocked by finding opportunities within new media models which will be bolted onto our traditionally resilient and reliant broadcast assets,” concluded Morobe.
