JSE-listed television equipment provider Ellies wants to secure half the retail market for set-top boxes when digital television goes live in SA.
The country is set to turn on digital signal towards the end of this year and about 10 million houses will need decoders to keep watching once the outdated analogue broadcast signal is switched off within the next few years.
Cabinet has set aside R2.45 billion to subsidise up to 70% of the cost of the decoder for about five million households. Ellies, which has a distribution agreement with decoder manufacturer Altech UEC, aims to grab the lion's share of the retail market by leveraging its established market position and the manufacturing capacity of Altech UEC.
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CEO Wayne Samson says digital TV is getting closer to launch and he is confident the new signal will be on air by late this year or early next year. The South African Broadcasting Corporation is set to go live with the new signal at the end of October.
“Ellies is looking forward to being involved in this project, which will form a major part of our business activities for the coming year or two.”
Samson expects a “nice boost” from digital television in the next financial year. He points out that, in the 17 years that satellite has been on air, three million subscribers have signed up locally.
For the full year to April, Ellies reported a revenue gain of 30%, to R1.7 billion, although net profit leapt 74.5%, to R116 million. The company ended the year with R142 million in the bank, a gain on last year's R25 million, and declared a 10c a share dividend.
Samson says some of the cash will be used to pay out a dividend, and while the company never stops talking to other parties around expansion, it has grown through greenfields moves in the past few years.
“Ellies will continue to seek new opportunities, in the markets in which we operate, as well as expand on existing relationships and core business skills to ensure increased shareholder value.”
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