In the first half of the 2024/25 financial year (1H FY25), MultiChoice Group (MCG) faced a turbulent operating environment, marked by foreign exchange volatility and persistent macroeconomic challenges.
Despite these setbacks, the Group displayed resilience, executing its cost optimisation strategies and strengthening its position in the fast-growing streaming market.
Financial Performance Overview
MCG reported a 4 per cent increase in organic revenues, totalling ZAR25.4 billion, driven by disciplined inflationary pricing and growth in new products.
However, on a reported basis, revenue declined by 10 per cent, primarily due to foreign exchange pressures on the Rest of Africa business and a stronger South African Rand.
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The Group’s subscriber base faced significant challenges, with a 5 per cent decrease in the linear pay-TV subscriber base over the past six months.
On a year-on-year (YoY) basis, the decline was 11 per cent, or 1.8 million subscribers, resulting in a total of 14.9 million active subscribers. This drop reflected the broader economic strain on consumers' disposable income, directly impacting subscriber growth.
"We are making good progress in addressing the technical insolvency that resulted from non-cash accounting entries at the end of the last financial year," said Calvo Mawela, CEO of MultiChoice Group.
"We expect to return to a positive net equity position by the end of November this year, supported by a number of developments and initiatives. The Group’s liquidity position remains strong, with over ZAR10bn in total available funds."
Strategic Adjustments and Cost Management
In response to these pressures, MCG implemented an accelerated cost-saving programme, delivering ZAR1.3 billion in savings over the past six months.
The target for cost savings has been increased to ZAR2.5 billion for the full year. MCG’s proactive focus on adjusting its cost base and optimising operational efficiency is expected to ensure profitability in challenging conditions.
To further strengthen its competitive edge, MCG made a strategic investment of ZAR1.6 billion in Showmax, positioning the streaming platform for future growth.
Showmax reported a 50 per cent YoY growth in its paying customer base, as the platform capitalises on the growing shift towards streaming across Africa.
"We have successfully been implementing our strategy over the past few years, achieving key milestones such as our investment in KingMakers, returning the Rest of Africa business to profitability in FY23 and FY24, concluding the Showmax partnership with Comcast and investing in Moment. While we’ve made huge inroads to reduce our cost base, there’s still more work to be done," Mawela continued.
Revenue Growth in New Products
MCG's new products saw strong revenue growth during the period. DStv Stream grew by 71 per cent, DStv Internet by 85 per cent, and DStv Insurance by 31 per cent, reflecting the Group's successful diversification into digital services.
Additionally, KingMakers delivered a 53 per cent increase in its Naira-denominated revenue, while SuperSportBet showed early success in South Africa, reporting a tenfold increase in net gaming revenue since its launch.
Despite the challenges, MCG’s free cash flow remained positive at ZAR0.6 billion, with total cash and equivalents amounting to ZAR5.7 billion.
The Group’s financial stability is further supported by ZAR4.4 billion in undrawn facilities, ensuring it is well-positioned to navigate ongoing market volatility.
Operational Highlights and Future Outlook
The Group's commitment to delivering content that resonates with its audiences remains unwavering. Over the past six months, MCG produced 2,763 hours of local content, expanding its library to 86,215 hours.
SuperSport reinforced its leading position in sports broadcasting, delivering 21,540 hours of live coverage, a 22 per cent increase YoY.
The SuperSport Schools app, which doubled its user base to reach over one million registered users, is also a testament to MCG's continued innovation in sports content.
Looking ahead, MCG remains focused on three key priorities: improving profitability in South Africa, streamlining operations in the Rest of Africa, and scaling Showmax as the leading streaming platform on the continent.
The Group will continue to drive growth through new revenue streams, including KingMakers, Moment, and DStv Insurance.
With a strong liquidity position and a clear strategy for the future, MultiChoice Group is well-equipped to navigate the challenges of the current economic landscape, positioning itself for sustainable growth and long-term success.
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