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Broadcast TV powerhouse Multichoice was out with results for the six month period up to the end of September yesterday. This is a stock that we recommend to clients with Rand-based accounts here on the JSE. You will recall that it was spun off from Naspers and listed in its own right in February 2019.
The core business is the DStv operation in South Africa, and a string of 50 other African countries to the north of us. Their overall subscriber base is 18.9 million households, and that grew by 1.2 million in the period. Of those, 10.7 million are in South Africa. I am always struck by how many satellite dishes you see in urban areas all around this country, including some pretty scruffy neighbourhoods.
Revenue for the period was up 4% to R25.7 billion. The price of Premium packages was held constant and that part of the customer base was stable. No loss of customers to Netflix, please note. Core headline earnings rose 24% on the prior period to R1.9 billion, despite a once off charge related to the Phuthuma Nathi empowerment scheme.
As expected, no interim dividend was declared, but Multichoice plans to pay out a dividend of R2.5 billion in the 2020 financial year.
The content offering on DStv is excellent, in my view. Live sport is the cornerstone of the various bouquets, and the breadth of their coverage of local and international events is second to none. Trust me, there is nothing like Supersport anywhere in the world, at that price.
Multichoice is probably a small holding in your local portfolio. You can certainly add to this one, at current prices.
More on the results in this excellent summary by Duncan McLeod at Techcentral:DStv rakes in subscribers, but they're spending less on average.
