Johnnic e-Ventures turns the corner

By Iain Scott, ITWeb group consulting editor

Johannesburg, 25 Jun 2003

Johnnic Communications` (Johncom`s) digital interests, held mainly through Johnnic e-Ventures, has achieved a 35% increase in full-year revenue and a 111% rise in earnings before interest, tax, depreciation and amortisation (EBITDA).

Johncom CEO Connie Malusi says the division had an "excellent year".

"Management`s decision to focus on the business-to-business and learning markets has paid dividends," he says.

"The division met its target of achieving positive EBITDA, with revenue up 35% and EBITDA improved by 111%. All signs are that the division has turned the corner."

Johncom`s digital business recorded revenue of R128 million for the year to 31 March, up from R95 million the previous year. This accounted for 4.9% of Johncom`s revenue of R2.6 billion (2002: R2.2 billion) on an ongoing operations basis.

The division`s EBITDA of R2 million compares with a prior-year loss of R19 million.

"Johnnic Digital is ideally positioned to capitalise on the growing use of Internet-based business solutions," Malusi says.

"Equally, the Internet has become entrenched as a powerful and effective delivery mechanism in education."

Johncom`s largest business in terms of revenue is newspaper and magazine publishing. It also has significant interests in filmed entertainment, music, book retailing, entertainment services and book and map publishing.

Johncom`s audited results show a fall in attributable earnings from R2.72 billion to R90 million, although it has also published pro forma results that exclude the unbundled telecommunications division.

Malusi says pro forma results were published in addition to the audited figures because the unbundling of 34.1% of Johncom`s shareholding in cellular network operator MTN took place at the end of the first quarter of the previous year. This meant a direct comparison was not meaningful.

The pro forma results also exclude the profit included in the prior year under exceptional items of R2.52 billion comprising of the surplus on the revaluation of MTN shares to market value on unbundling.

On a pro forma basis, attributable earnings declined by 30% from R129 million to R90 million.

Headline earnings for ongoing operations rose by 25% from 143c to 179c, while attributable earnings for ongoing operations increased by 25% from R149 million to R186 million.