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TV Media Research Analyst Johannesburg

Multichoice dividends up

21 Sep 2010

The ordinary dividend of R240 million being paid out this year to Phuthuma Nathi 1 & 2 is a significant increase from last year's dividend of R180 million. The ordinary dividend will amount to 71,1 cents per ordinary share, up from the 53,3 cents paid last year, which represents an increase of 33%.

A special dividend of R300 million will also be paid to Phuthuma Nathi 1 & 2, which will be used to reduce the balance on the share loan account. Phuthuma Nathi 1 & 2 have 120 000 black shareholders that collectively own 20% of MultiChoice South Africa. When launched, it was one of the largest empowerment transactions in the listed media sector.

In the financial year ending March 2010, MultiChoice group revenues increased by 18% to R14,5 billion. Group net profit was R2.9 billion for the same year. Revenue growth can be attributed to growth in subscriber numbers - from 2.4 million in March 2009 to 2.85 million in March 2010. Most of the growth is attributed to the DStv Compact bouquet.

"The DStv Compact bouquet helped our growth - we gained 246 000 new Compact bouquet subscribers. Investment in local content and subsidies of decoders helped us to grow our subscriber base," says Nolo Letele, Group CEO of MultiChoice South Africa.