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Profit for the year rose to R4.044bn from R623m before.
In light of the restructuring of the company and extensive distributions to shareholders, no dividend was declared at this stage.
During the year, ElementOne undertook two major corporate restructurings to unlock shareholder value. The company's interests in M-Net and SuperSport International Holdings were sold to Naspers for 20.9 million Naspers N shares and R250m cash. In December 2007, the Naspers shares were all unbundled to shareholders in a distribution with a market value of R3.5bn.
In March, the company in a general meeting approved the listing on the JSE - and subsequent unbundling to shareholders - of Avusa, a company comprising ElementOne's operating media and entertainment assets. This distribution in specie had a value of R3.2bn.
The disposal by ElementOne of its interests in M-Net/SuperSport and of its operating media and entertainment assets are accounted for in these financial results as discontinued operations.
These actions meant that at year-end the company consisted of a 33.6% direct and indirect investment in Caxton and CTP Publishers and Printers, 1.093 million MTN Group shares and cash on hand of R166m against which are taxation and other liabilities of R319m.
ElementOne's investment in Caxton has been accounted for, effective 1 April 2007, as a financial asset at fair value through profit or loss, and no longer as an associate.
Accordingly, an exceptional profit of R1.129bn and a deferred capital gains tax charge of R122m have been recognised in profit and loss.
Digital initiatives The group said its traditional businesses continued to grow, and digital initiatives comprised 15% of the operating profit generated by the media and entertainment assets.
The media business unit included the group's interests in newspapers, magazines, Career Junction and I-Net Bridge. Revenue grew 11% with the development of new revenue streams, while operating profit increased by 8%, excluding the development costs of The Times and The Weekender.
During the year majority stakes in Amorphous New Media and Amorphous Corporate were acquired. The businesses serviced the demand for digital marketing and communications solutions, with both businesses having performed well in their respective markets.
A 60% stake in Airport Media, a specialist airport advertising business with a strong reputation for innovation in the competitive outdoor market, was acquired at the end of March 2008 as part of a strategy to enter the expanding out-of- home market.
Retail comprised Exclusive Books, Van Schaik Bookstore and the Africa business. Exclusive Books opened six new stores during the year, while two shops were moved within their respective shopping centres and fully refurbished. Revenue grew by 15%, with same-store revenue up by 13%.
Delivered above expectation
Van Schaik Bookstore delivered above the expectation benchmarked for the investment proposal.
In Nigeria, operating losses were incurred by the media stores, cinemas, and compact disc plant, while the Business Day Nigeria newspaper operated profitably.
The political turmoil in Kenya subsequent to the December 2007 elections materially affected the business, it said.
Revenues from the Africa business grew by 35% to R159m from R118m, while the loss from operations narrowed to R54m from R70m in the prior year.
The Nu Metro businesses (Film Distribution, Home Entertainment, Interactive, Cinemas and Popcorn Cinema Advertising), combined with Music and Compact Disc Technologies formed the entertainment business unit.
Books and Maps incorporated Struik, Struik Christian Books, New Holland, Map Studio, MapIT, Booksite Afrika and Entertainment Logistics Services. The Books and Maps results included a foreign exchange gain of R1m compared to R6m in the prior year, as well as R5m in mobile development costs.
As reflected by its name, the company is now a single asset investment holding company with a 33.6% direct and indirect stake in Caxton. The company is not represented on the boards of directors of Caxton, Afmed or Caxton Ltd and is not by agreement entitled to such representation.
The JSE has notified the company that, in terms of the JSE Listings Requirements, the company will, as a non-controlling investment holding company, only be allowed to maintain its listing for a period of 12 months from 1 April 2008.
"The board is therefore committed to actively seeking ways of ensuring that shareholders receive value and are not prejudiced through the JSE's possible termination of the company's listing.
As soon as this is possible, details of the board's proposed actions in this regard will be announced," the group said.
- I-Net Bridge
