MEDIA group Avusa - owners of Sowetan and the Sunday Times - posted "credible" results in the current economic environment, chief executive Prakash Desai said yesterday.
Avusa said revenues from continuing operations rose 8percent to R4,875billion and profit after tax on the same businesses rose 7percent to R290million for the year ended March.
Profits were boosted by a 22percent reduction in corporate costs, and the group has ended its "perennial losses" in Africa by selling off Nigeria and Kenya for R62million.
Efforts in the digital sphere are coming to fruition for the group, which has long been criticised for taking its time to expand in this growth area.
Existing digital business of I-Net Bridge, Career Junction and MapIT now contribute 23percent of earnings before interest and tax.
Khulekani Dlamini, portfolio manager at Afena Capital, said most of the digital assets were of a good quality with high barriers to entry, robust annuity revenue, good margins and good long-term prospects.
Dlamini said management had rationalised loss-making businesses decisively but there was still room left to streamline the business further.
Desai said traditional media continues to pay the bills but migration of classifieds to digital media was happening "at an alarming speed" in the developed world.
Printing contracts in the year under review were renegotiated in the Media division. Desai said the group would consider investing in a printing press in Gauteng. This could cost between R100million and R200million.
Retail businesses did better than the market expected. Revenue rose 22percent to more than R1billion, with a particularly good performance from Van Schaik Bookstore, offsetting the 0,3percent decline in Exclusive Books revenue and a 1percent loss of margin.
The Entertainment division was knocked by the performance of cinema, which had a 9percent fall in attendances and an earnings loss of R11million at Nu-Metro Cinemas.
Desai said the group would sell cinemas for the right price. Music sustained a trading loss of R11million.
Dlamini said entertainment fell of a cliff. "This division continues to be problematic. While there are some gems within it, it has not really outperformed even in the good times."
The second half was softer for Avusa than the first half. Opportunities exist for the group, as competitors are not investing locally - they either focus globally, or are reducing investment locally.
Cash generated by operations was R445million during the year.