Kagiso Media is looking for new properties to add to its portfolio, and is working towards a time when new and traditional media converge.
The company yesterday evening published its results for the half-year to December and said revenue grew 12.4%, to R515.3 million. Earnings per share were up to 98.8c, from 72.4c, while headline earnings per share grew from 75.7c to 98.8c.
“All of our operating segments have shown solid growth in revenue, which is particularly pleasing,” says CEO Murphy Morobe. However, the star performer was new media, which more than doubled revenue.
Morobe says Kagiso is looking for new properties to add to its portfolio. He explains the company still wants to have a presence in the outdoor advertising space, and has bid for new primary licences in Cape Town and Pretoria, which should be awarded in the first half of this year.
During the half-year, Kagiso bought Knowledge Factory for R19.5 million and half of Property Dot Go for R530 461. The company then swapped a 35% share in Knowledge Factory for software, systems and customers in Mint's property division.
Morobe explains these units will boost its information offering, which includes divisions such as LexisNexis. He explains the company is diversifying its portfolio as it needs to remove the risk from declining radio advertising.
Kagiso is also working towards a time when its traditional media offerings will converge with new media, such as on-air radio stations, says Morobe. He cannot provide a timeframe for when this will finally happen, but says each unit will work at its own pace.
Digital glows
Revenue from the company's new media segment leapt from R12 million a year ago to R37.5 million. Kagiso says operating profit of the new media unit improved 62%, to R6.8 million.
The segment includes Gloo Digital Design, which continued to broaden its client base, leading to strong growth and good margins. Its MSN unit made good progress with sales, and broke even in the first few months of trading. Kagiso signed an agreement with Microsoft to manage the South African MSN portal in the last financial year.
“Both Gloo Digital Designs and Urban Brew Studios had very strong performances. MSN, our joint venture with Microsoft's MSN, has performed beyond our expectations, and is already breaking even, validating our decision to invest in the portal,” Morobe adds.
Kagiso has several media interests, including Urban Brew Studios, radio stations and LexisNexis. “LexisNexis, which had been under pressure in the previous financial year, staged a strong turnaround in the six months under review,” says Morobe.
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