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MEDIA group Avusa indicated yesterday it was seeing signs of a rebound in advertising, the media and entertainment group's key revenue driver, after taking a dip during the recent period of recession.
The company's media assets, which include the Sowetan, relies heavily on advertising spend, which took a severe knock during the recession and financial crisis.
The media unit accounts for about 42percent of the group's total revenue.
Releasing financial results for the year to March 2010 yesterday, Avusa said advertising revenues slipped 17percent, resulting in the 39percent decline in operating profit to R247million from R405million.
Despite the depressed advertising sales, Avusa indicated that there were signs of recovery in advertising spend.
Prakash Desai, chief executive of Avusa, said though advertising revenues remained under pressure across the newspaper and magazine divisions, there was a pick in the last quarter of last year as marketers began returning to print.
"We expect that recruitment advertising, hard hit by the slowdown in the economy, will be the last sector to recover," Desai said, noting that the group expected improvement in the economy and positive impact from the Soccer World Cup.
Desai said the recession saw reduced support for the group's main value driver of advertising.
This, together with a reduced gross margin due to recessionary market conditions, resulted in gross profit being R167million lower than the comparative period.
Full year diluted headline earnings dropped 38percent to 149 cents a share from 242 cents previously. Revenue from continuing operations decreased 4percent from R4,9billion to R4,7billion. - I-Net Bridge