MultiChoice Group demonstrated resilient operational performance for the year ended March 2024, delivering a 26 per cent trading profit margin in South Africa, while increasing trading profit in the Rest of Africa by 48 per cent, despite very challenging macro-economic conditions.

However, the result showed that overall active subscribers declined by nine per cent because of the challenging consumer environment. This was mainly due to a 13 per cent decline in the Rest of Africa business, with Nigeria, Angola and Zambia most affected, while the South African business was more resilient, declining by only five per cent.

In the report announced yesterday, the group revenue increased by three per cent on an organic basis, however, due to weaker local currencies and consumer pressure, reported group revenue declined by five per cent. Subscription revenues grew by two per cent on an organic basis.

However, on a reported basis, subscription revenues declined by seven per cent due to a weaker Naira.

According to the report, group trading profit increased 24 per cent on an organic basis, despite the additional ZAR1.4 billion investment in Showmax to drive future growth. After factoring in the ZAR4.5 billion impact related to foreign exchange weakness, reported trading profit declined by 21 per cent to ZAR 7.9 billion.

Further, given the positive impact of the lower expenditure (including ZAR1.9 billion in cost savings and ZAR1.5 billion in reduced decoder subsidies), the group achieved positive operating leverage of 4.3 per cent (i.e. a 3.3 per cent organic revenue increase against a one per cent organic reduction in operating expenses).

In terms of adjusted core headline earnings, higher realised hedging gains and benefits from a narrower gap between official and parallel Naira rate, was more than offset by the weaker trading profitability, resulting in adjusted core headline earnings (which now includes losses on cash remittances after tax and minorities) decreasing by 20% to ZAR1.3 billion.

Commenting, MultiChoice Group CEO, Calvo Mawela, said: “Four years after setting out a clear strategy of building Africa’s entertainment platform of choice and investing in services to support a broader ecosystem, our three core segments are now fully operational: video entertainment, interactive entertainment and fintech. Our focus now shifts to building on these solid foundations to drive growth in these new areas, and on further enhancing business efficiency across our operations.

“While we are not alone in feeling the challenges of a weak consumer environment, I am proud of the speed and effectiveness of the team in implementing strategic actions to retain customers, safeguard cash generation and drive costs savings which surpassed our targets. It is the strength of this team, the quality of the underlying business and the clarity of our strategy which underpins my confidence in delivering on our potential.”