MultiChoice Group has reported a downturn in its financial year ending in March 2024 with a pre-tax loss of 706 million rand ($38 million).
This downturn comes as local currencies have been unstable, added to power disruptions, and a weak consumer environment heightened by rising inflation and high interest rates, ultimately affecting MultiChoice.
Despite these difficulties, the company has expanded and is currently the subject of a takeover bid by France’s Canal+.
MultiChoice’s financial performance has been impacted by adverse macroeconomic conditions. Group revenue declined by 5% to 56 billion rand, despite an organic increase of 3%.
The group’s trading profit saw a 21% decline to 7.9 billion rand, influenced by a 4.5 billion rand impact from foreign exchange weaknesses. Again, a 9% drop in overall active subscribers further compounded the financial strain, with the Rest of Africa business experiencing a sharper 13% decline, particularly in Nigeria, Angola, and Zambia.
In South Africa, where the subscriber base decreased by 5%, the company faced 275 days of rolling power cuts, discouraging potential subscribers lacking backup power solutions. The challenging economic environment also led to a 20% decrease in adjusted core headline earnings to 1.3 billion rand.
Despite the financial setbacks, MultiChoice successfully launched Showmax 2.0, SuperSportBet, and Moment, contributing to future growth prospects. Showmax, relaunched across 44 markets in sub-Saharan Africa, reported a 22% revenue growth to 1 billion rand, with an encouraging increase in the paying subscriber base.
CEO Calvo Mawela noted the group’s resilience and strategic clarity, stating, “Our three core segments—video entertainment, interactive entertainment, and fintech—are now fully operational. Our focus now shifts to building on these solid foundations to drive growth in these new areas and further enhancing business efficiency across our operations.”
MultiChoice remains Africa’s largest producer of original content, with over 6,500 hours produced in FY24, expanding its local content library to over 84,000 hours. Highlights included the premiere of “Shaka Ilembe,” which became Africa’s biggest TV series, and the continued success of SuperSport, broadcasting 34,490 live events during the year.
In April 2024, Canal+, a subsidiary of the Vivendi group led by billionaire Vincent Bollore, made an offer to acquire all MultiChoice shares it does not currently own, upping an earlier rejected bid to 125 rand per share. Canal+ already holds over 35% of MultiChoice’s shares and sees this acquisition as a strategic move to enhance its presence in English-speaking and Portuguese-speaking African markets.
Canal+ is present in 25 African countries through 16 subsidiaries and has eight million subscribers. The takeover bid is currently under review by an independent board appointed by MultiChoice, which deemed the offer “fair and reasonable.”
Moving forward, MultiChoice plans to focus on scaling its new services, including Showmax, Moment, and SuperSportBet, while continuing to develop local content and sports renewals. The company also aims to enhance its cost-saving initiatives, targeting an additional 2 billion rand in savings to mitigate the ongoing impact of currency volatility and consumer weakness.
“The strength of our team and the clarity of our strategy underpin my confidence in delivering on our potential,” said Mawela. “We will continue to adapt our platforms to cater to customers’ evolving needs, positioning us well to prosper once currencies stabilize and economies rebound.”
