22 June 2018

Zimbabwe: Zimpapers Surpasses Revenue Targets

Zimbabwe's only listed and fully integrated media group, Zimpapers, surpassed revenue and profitability targets for the first five months of this year, while the performance ran ahead of prior year comparatives.

Group chief executive officer (CEO) Pikirayi Deketeke, upbeat about prospects after the group obtained a television content distribution licence, said revenue in the period January to May 2018 came in at $16,5 million against budgeted top line of $16,25 million.

Mr Deketeke made the remarks in a trading update for the first five months of this year, which he presented after the group's annual general meeting yesterday.

He said the integrated media group's revenue recorded in the period January to May 2018 represented a 9 percent jump compared to the revenue achieved during the comparative period last year.

The Zimbabwe Stock Exchange (ZSE) listed group bettered its prior year comparative revenue of $15,15 million, in the period under review, while 2018 profit came in at $1,8 million against a budget of $1,3 million.

Zimpapers profit for the first five months of the year, Mr Deketeke said, reflected a net profit margin of 11 percent. In the same period last year, the diversified group achieved profit of $1,2 million.

"So for this year we have managed to continue with our growth trajectory, as you can see from both the top line and bottom line, there is quite significant increase in terms of our operations," Mr Deketeke said.

"To drill down on the numbers, looking at group profitability in the period January to May, again, the group surpassed its profit budget by 43 percent and prior year profit by 53 percent," Mr Deketeke said.

The board of directors chairman Delma Lupepe, said they had taken the decision not to declare a dividend for the financial year to December 2018 due to the need to recapitalise the group's operations.

Looking at divisional performance, the Zimpapers CEO said all divisions had performed ahead of budget and prior year profitability levels, which was testimony to a stellar performance in the period under review.

Mr Deketeke said that in terms of revenue contribution by division, publishing and digital operations contributed 70 percent; commercial printing came second at 18 percent while radio chipped in with 12 percent.

"When you compare with 2017, publishing and digital came down from 75 percent to 70 percent, radio managed to maintain contribution at 12 percent. The biggest growth came from commercial printing, which grew from 13 percent to 18 percent this year."

Further broken down to contribution by sales, Mr Deketeke said advertising contributed 58 percent of revenue, copy sales (circulation) 22 percent, commercial printing 18 percent and digital media 1,5 percent.

New products, which include events, contributed 0,5 percent of group revenue. The segment is exhibiting huge potential going into the future, riding on the strong brand equity of the group, Mr Deketeke said.

In the outlook, Mr Deketeke said that the group was seeing new prospects in television broadcasting after Zimpapers had received a TV content distribution licence and will launch a 24 hour news channel by July 30, 2018.

The Zimpapers boss said TV broadcasting, where even telecoms giants such as Econet Wireless Zimbabwe are beginning to join, offered prospects for growth, as the new frontier where "the advertising dollar is going".

"So, for us, we have been awarded the television licence for TV content distribution, we have paid over $150 000 in licence fees. Our plan is to start with a 24 hour news channel. Studio construction is being done here (at the head office) and is about 75 percent complete," he said.

Mr Deketeke said that the media group was now in the process of sending out television test signals and "our aim is to launch the (24hr) news channel before the 2018 general elections.

"So we are on a firm foundation in terms of launching the TV side of our business."

The group is planning to penetrate the market with a "feel good" news channel, a prime channel with 75 percent local content, a local, regional and international music channel, a fully aggregated gospel music channel, a fully packaged kids channel and an all round sports channel.

Mr Deketeke said in terms of the traditional business, the listed group remained on course to achieve its target, and for prospects, the future appeared exciting after Zimpapers obtained a TV licence, enabling the group to exploit opportunities in TV advertising.

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