JSE-listed Kagiso Media's new media unit saw operating profit drop 14%, because of last year's court ruling that bans online gambling and advertising.
In the six months to December, the company's overall revenue grew 15%, to R455.3 million, while pre-tax income gained 13%, to R165.7 million. However, Kagiso's new media unit only grew revenue 2%, to R38.1 million, and its operating profit dropped 14%, to R5.9 million.
Kagiso says the decline in the unit's performance was because of a ban on online gambling and advertising. Last September, a Supreme Court of Appeal ruling upheld a decision declaring online gambling and advertising of the service illegal.
Kagiso Media CEO Murphy Morobe says new media lost between R7 million and R9 million because of the ban. “Fortunately, in the next six months, the new media pipeline suggests a rebound on the back of new contracts.”
Morobe says the digital unit, like the rest of the company, is actively looking for possible acquisitions, which will give the company scale and further its objective of aggregating significant audiences.
“Our ambitions in digital definitely extend beyond our borders. Through our partnership with MSN, we will, this year, be deliberately focusing on East and West Africa.”
Kagiso has also bought a controlling stake in USP Designs, which is an IT business that specialises in the real estate industry. It owns CyberAgent, which provides office management applications to its real estate clients, and CyberProp, an online property listing database with more than 155 000 entries.
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