MultiChoice Group (MCG) H1 2025 earnings summary

Executive summary

• Interim results were significantly impacted by severe currency depreciation, weak subscriber growth, and increased investment in Showmax, but strong cost efficiencies and new business growth, including KingMakers and Moment, provided some offset.

• Showmax paying subscribers grew 50% year-on-year (excluding discontinued products), with expanded content and partnerships, while linear pay-TV subscribers declined 11% to 14.9m.

• Cost savings initiatives delivered ZAR 1.3 billion in permanent savings in 1H FY25, with a full-year target of ZAR 2.5 billion.

• The group maintains over ZAR 10 billion in liquidity and expects to resolve its negative equity position by November 2024.

• Strategic focus remains on cost savings, digital migration, and scaling new revenue streams such as insurance, internet, and gaming.

Financial highlights

• Group revenue reached ZAR 25.4 billion, up 4% organically but down 10% on a reported basis due to currency weakness.

• Trading profit before investments and FX rose 32% year-on-year, but reported trading profit fell 46% to ZAR 2.7 billion due to a ZAR 2.3 billion FX hit and Showmax investment.

• Adjusted core headline earnings dropped from ZAR 1.5 billion to ZAR 7 million, with headline loss attributable to shareholders at ZAR 1.8 billion.

• Free cash flow was ZAR 600 million, down 48% year-on-year, with a cash balance of ZAR 5.7 billion and access to ZAR 4.4 billion in undrawn facilities.

• Subscription revenue increased 1% organically to ZAR 20.3 billion, with Rest of Africa up 5% and Showmax up 18% organically; active subscribers declined to 16.7 million.

Outlook and guidance

• Focus remains on optimizing the cost base, protecting South African profitability (targeting mid-20s% trading margin), and returning Rest of Africa to profitability.

• Showmax investment expected to peak this year, with cash burn to be reduced in the next financial year.

• Mandatory offer for shares at ZAR 125/share underway, with regulatory filings submitted and long-stop date of April 2025.

• Transponder lease renewals and further cost savings expected, with most benefits realized from FY 2026 onward.

• Rest of Africa to minimize USD funding needs; YoY trend expected to improve in 2H FY25 due to weaker prior period comparatives.