Media24 notched up another hefty trading loss in financial 2018 as it continued to plough money into digital media and e-commerce operations while having to contend with the structural decline in its mature print media businesses.
Media24, the single largest media group in the country, is wholly owned by Naspers and reported a fall in turnover to R4.7bn from R4.9bn. But costs of over R5bn left an operating loss of R373m, up from R356m in the 12 months to end-March 2017. The trading loss of about $30m is in the context of Naspers’s $11.3bn profit for the year.
Vestact CEO Paul Theron said that Media24 was in danger of being just a "rounding error" for Naspers.
Media24 does not reveal the sources of the operating losses and does not provide a detailed breakdown of the "costs of providing services and sale of goods" or of the "selling, general and administration expenses".
'Strong results'
But CEO Esmare Weideman referred to "strong results" delivered by Media24’s print media division, "with our newspapers benefiting from solid retail advertising and cost efficiencies boosting profitability".
Weideman said Media24’s newspapers and magazines "maintained their leading position in circulation and advertising market share".
The print assets appear to have benefited from an uptick in sentiment after Cyril Ramaphosa’s election as president.
For Tiso Blackstar, which publishes Business Day, the media results for the six months to end-December 2017 were hit by the political uncertainty at the time. Revenues in the traditional media business were down 6% but tight cost management limited media’s operating profit decline to just 4.6%.
Despite limited returns, Media24 continued to invest heavily in digital media, online fashion and e-commerce logistics in a bid to diversify the group. "The structural decline in print media, coupled with the investment in our growth businesses, resulted in the trading loss deepening by 18% to R368m," said Weideman.
The group’s digital media brands, housed in 24.com, grew monthly pageviews by 9% and claim a 45% audience market share among South African news sites. Spree, the online fashion store, grew shoppers by 28% and orders by 49%.
On Monday Novus, which was majority held by Media24 until September 2017, when the stake was reduced to 19%, announced that it had appointed an acting chief financial officer. This is the second top executive appointment in less than a week. Last week Novus announced that Neil Birch, appointed chairman in 2017 and executive chairman in May when former CEO Keith Vroon resigned, would take over the CEO position. The board said it will appoint a permanent replacement chairman and in the interim Jan Potgieter will be acting chairman.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.