MultiChoice steady post-lockdowns
June 9, 2022
South African broadcaster MultiChoice Group (MCG) delivered steady margins for the year ended March 31st 2022.
“Reduced losses in the Rest of Africa (RoA), a rebound in advertising revenues and a continued focus on cost containment enabled us to absorb the R1.1bn (€70m impact of a normalisation in content costs as live sport returned and we resumed our local content production post the Covid-19 lockdowns,” said Calvo Mawela, Chief Executive Officer.
“We continued to enhance our video entertainment offering and expanded the variety of services offered to our customers as we grow our entertainment ecosystem,” he added.
The group’s linear pay-TV subscriber base (measured on a 90-day active basis) increased by 0.9 million to reach 21.8 million households, comprising 9 million in South Africa and 12.8 million in the RoA. The 5 per cent growth year-on-year (YoY) is subdued due to the tough economic environment and elevated subscriber growth during Covid-19 related lockdowns in the previous year.
• Revenue: ZAR55.1 billion (€3.35bn) up 3% (up 7% organic)
• Trading profit: stable at R10.3bn (up 1% organic, due to absorbing cost normalisation)
• Core headline earnings: R3.5bn (up 6% as Forex impact was less negative))
• Free cash flow: R5.5bn (down 3%, due to one-off prepayments)
• Dividend: R2.5bn 565 ZARc per share (±4% yield)
MCG continued to pursue its differentiation strategy through local content, stepping up its local content production by 32 per cent YoY to 6,028 hours and bringing its local content library close to 70,000 hours. Local content accounted for 47 per cent of total general entertainment content spend and the group remains on track to achieve a target of 50 per cent by 2024.
Seven major new channels launched, including two Portuguese-focused channels in Angola and Mozambique. In South Africa, the group’s co-productions such as Reyka and Recipes for Love and Murder were broadcast to critical acclaim and international interest.
SuperSport delivered world class productions given a bumper calendar of major sporting events. A record number of viewers tuned into Euro 2020, the British and Irish Lions rugby tour and the Tokyo Olympics. SuperPicks, a free-to-play predictor game and the group’s first product collaboration with KingMakers, was launched in Nigeria in August 2021 and already has 0.5 million registered users. SuperSport Schools, now 100 per cent owned by the group, continues to grow rapidly and broadcasted 5,249 live games of schools sport during FY22.
Growth in Connected Video users on the DStv app and Showmax service is outpacing the market. Paying Showmax subscribers were up 68 per cent YoY, whilst overall monthly online users of the group’s connected video services increased 28 pr cent YoY. A major driver has been the focus to localise by expanding local payment channels and enabling local billing in various markets. In addition, local content was stronger than ever with titles like DevilsDorp, the Real Housewives franchise and The Wife. Showmax Pro delivered an enhanced customer experience, which included the Tokyo Olympics, Euro 2020 and every English Premier League game.
On the product side, the announcement of DStv as official launch partner of Disney+ in South Africa is a further extension of the group’s aggregation strategy, which aims to bring customers more content, and convenient access in one central place via DStv’s connected devices.
DStv Internet, which was launched in September 2021, is growing strongly. The DStv Rewards program, which supports customer retention and has been successful in reducing dormancy, continues to gain traction with close to a million customers. Digital adoption continues to track well with around 75 per cent of customer touch-points now being managed through the group’s self-service channels. Due to the ongoing global silicon chip shortage the DStv Streama launch has been delayed and is now expected to launch in the first half of the next financial year.