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Equity transaction to knock MultiChoice earnings

Jun 10 2019 21:15
Lameez Omarjee, Fin24

Entertainment company MultiChoice Group [JSE:MCG] is bullish about its trading profit for the financial year ended March 31, 2019 but the same cannot be said for its net earnings.

The group on Monday issued a trade statement indicating that core headline earnings per share for the period is expected to be between 8% (30c) and 12% (45c) higher than the previous year's earnings of 374c per share.

"Trading profit is expected to be between 9% (R0.6bn) and 13% (R0.8bn) higher than the prior year´s reported R6.3bn," the statement read. The group attributes the improved financial performance on its subscriber growth and reduced losses in its "rest of Africa" business segment.

The group, however, expects losses per share of between 673c and 739c, compared to earnings of 332c per share reported in the previous year.

"Headline loss per share for the current period is expected to be between 724cents and 800 cents lower than the prior year´s reported headline earnings per share of 410 cents," the statement read.

The group attributes this to having to account for allocating a 5% stake in Multichoice SA Holdings to Phuthuma Nathi Investments as part of the unbundling process. MultiChoice had unbundled from internet group Naspers and listed on the JSE in February this year.

"As a result, loss per share and headline loss per share were impacted significantly by the once-off equity-settled share-based compensation charge recognised on what was an effective disposal of 5% of the group´s interest in MultiChoice South Africa Holdings.

"While the impact of this transaction is removed from core headline earnings per share and trading profit, it is included in both loss per share and headline loss per share. This is expected to reduce earnings per share and headline earnings per share by 438 cents," the statement read.

The depreciation of the rand against the dollar also led to foreign exchange losses, which has reduced earnings per share and headline earnings per share by 263 cents.

The group will release its annual results on June 18, 2019.

jse  |  multichoice  |  results  |  trading
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