Ad boom far from over

Chief Executive Connie Molusi told Reuters in an interview South Africa's advertising market had shown no sign of flagging since the company posted first-half earnings in November and he said there was no slowdown in sight.

Johncom publishes the Sunday Times and Sowetan newspapers and a host of magazines.

"We expect trading to be in line in the second half as the first half," Molusi said in an interview late on Wednesday.

Johncom posted a 14% rise in sales in the six months to the end of September and a 156% leap in headline earnings per share.

"The economy is much more resilient than people give it credit for. I would expect next year to follow the same kind of trends ... and trading."

Johncom, which also runs a cinema and book store chain, and main rival Naspers have posted bumper profits thanks to soaring sales and advertising revenues as South Africa enjoys its longest period of economic expansion on record.

Analysts say Johncom has been vulnerable to a takeover since it was spun off from parent firm Johnnic Holdings last year but Molusi said it had received no approaches from possible bidders.

He declined comment on talk that Johncom could fall prey to a takeover by local publisher Caxton, or that the two firms could merge part of their businesses, but said Johncom was keen to increase its 36.2% stake in the firm.

Molusi said Johncom was "making progress" on a deal to bring on board black investors, in line with the government's affirmative action drive, and expected to announce a deal "within a reasonable timeframe".

Media reports have said that South Africa's three best known black tycoons, Cyril Ramaphosa, Patrice Motsepe and Tokyo Sexwale, are hoping to secure a slice of Johncom and are in talks with management. Molusi declined to comment on the reports.

Asked if the company was planning to sell 25% of its capital to black investors he said it was "within that ballpark".

TV ambitions

Johncom, which already part owns pay-TV channel M-Net, may apply for a licence to run a wider pay-TV network, Molusi said. It would also consider tying up with a phone or internet company to launch a TV service via broadband if changes to broadcast and telecom laws allowed for that.

"It will depend on the regulatory framework. We will take a look at the opportunity and if it is attractive," he said.

South Africa's communication regulator wants to licence more pay-TV broadcasters to challenge the monopoly in Africa of Naspers's DStv, but has not detailed its plans.

Like scores of other South African firms keen to conquer untapped markets further north, Johncom is pushing into the rest of the continent and Molusi said it hopes to launch its first two cinema and media store sites in Nigeria by the end of May.

The company expects to launch a Kenyan version of its Business Day newspaper in the third quarter and was testing the waters for several new magazine titles in Nigeria.

At home, Molusi said it had called a truce on a price war which hit its cinema business in the first half and that revenues in that part of the business had recovered.

The company is in talks to launch three cinemas in Soweto township to try to tap into the lower end of the market which Molusi said was growing fast.