Broadcasting group MultiChoice has issued an ordinary dividend payout to its empowerment companies, Phuthuma Nathi 1 & 2, of R240 million - a 33% leap from last year's R180 million payout.
The company will also pay a special dividend of R300 million to the empowerment companies, which will be used to reduce the balance on the share loan account.
MultiChoice points to good year-end results as the reason for the high payout, citing a group revenue increase of 18% in the last financial year ending March 2010, to R14.5 billion. Group net profit was R2.9 billion for the same year, states the company.
Phuthuma Nathi 1 & 2 have 120 000 black shareholders that collectively own 20% of MultiChoice SA. When launched, Phuthuma Nathi was one of the largest empowerment transactions in the listed media sector.
BEE honey pot
Ernst Kaplan, MD of Kaplan Equity Analysts, explains that, while previously, black equity empowerment (BEE) was seen as a competitive advantage, it has today evolved into a “need to have” that may hinder business if ignored.
He explains that, while it is an integral element of the country's future, the need for skills development underpins the success of the BEE investment. Kaplan believes that in many BEE deals, the financial performance of the parent company is the main driver for success.
MultiChoice says its revenue growth can be attributed to growth in subscriber numbers - from 2.4 million in March 2009 to 2.85 million in March 2010.
Most of the growth is attributed to the DStv Compact bouquet, which saw uptake by 716 000 households as at year-end, up from 470 000 in March 2009, claims the company.
“The DStv Compact bouquet helped our growth - we gained 246 000 new Compact bouquet subscribers. Investment in local content and subsidies of decoders helped us to grow our subscriber base,” says Nolo Letele, group CEO of MultiChoice SA.
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