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Media and entertainment company Avusa has maintained its growth momentum despite the current challenges in the South African economy.
Since the end of March, Avusa holds the media and entertainment assets of the previous Johnnic Communications, which include The Sunday Times, Sowetan, The Times, Nu Metro, Exclusive Books and numerous other media investments. Element One now holds the Johncom stake in Caxton and CTP.
Avusa chief executive officer Prakash Desai said Avusa achieved 17percent increase in revenue (to R4,67billion) in the year to March "and, in ongoing businesses, a 25percent increase in operating profit excluding the development costs of The Times and The Weekender. If these are included, operating profit grew 10percent (to R421-million)."
He said management was pleased with the results in this economic environment, "and we delivered this off a high base as over the last five years we have produced a compound 20percent increase in operating profit".
The Avusa shareholder update, issued yesterday, showed that while its media interests increased revenue, profit in this division was lower due to a R39million loss at The Times and a R6million loss at The Weekender, both related to development costs.
Desai said The Times had attracted 38000 new subscribers and its readership now totalled 340000.
Entertainment profits were lower, largely due to Nu Metro, which suffered the effects of lower attendances and lower ticket pricing. Nu Metro remains cash positive, however, and a turnaround strategy is in place.
The group's retail operations did well. Exclusive Books and Van Schaik Bookstore grew revenue by 15percent.
While traditional businesses continue to grow, digital business across the group now accounts for 15percent of operating profit.
Avusa has been criticised for unbundling profitable businesses, including its holding in M-Net/SuperSport. Desai said the company's role in this investment was seen as passive, and shareholders wanted it to unbundle as it was creating a value trap.
An empowerment deal has been on the agenda for four years, but stalled because of the unbundling process. Desai said management has now sent the board a proposal for a 10 percent empowerment transaction.