Avusa: SA newspapers to grow

Johannesburg - Media group Avusa reported an increase in headline earnings despite a challenging consumer market.

Earnings increased by 3.6%, with their retail, media and entertainment interests reporting revenue growth.

The group's book chains - Exclusive Books and Van Schaik's Bookstores - saw revenue growth of 22% for the year ending March 2009, while revenue at its media segment was up 6%, with smaller losses reported at its new daily newspaper The Times.

But BDFM - owner of Business Day and Financial Mail, and partly owned by Avusa - suffered a loss of R9m, compared to a profit of R7m in 2008.

South Africa is in the early stages of its evolution as a nation of readers, said Paul Theron, director of Vestact Asset Managers.

"[Avusa is] doing better than expected in the downturn, but the worry is that the core, traditional readers are migrating to the web."

The internet is eroding print media audiences across the globe. The same trend is expected in South Africa when internet penetration increases and broadband becomes cheaper.

According to CEO Prakash Desai, Avusa will focus on multimedia only as a long-term investment. He believes South Africa is still a developing nation and newspapers and print media will continue to grow amid poverty and low levels of digital activity.

"We are quietly confident that Avusa has a long future in print media," said Desai.

Avusa, a subsidiary of ElementOne, earlier sold its Nigerian and Kenyan interests, which contributed to a 22% reduction in costs.

"The disposal of our African interests resulted in a pleasing increase in our profitability," said Desai. "While trading conditions remain challenging, our focus will be on cash and operational efficiencies," he said in a statement.

ElementOne will be delisted by September 2009 as part of a reorganisation of the group. According to JSE regulations, a double listing cannot continue indefinitely.

- Fin24.com