MultiChoice Group (MCG) H1 2025 earnings summary

Executive summary

• Severe foreign exchange headwinds, especially in Nigeria, and weak macroeconomic conditions led to disappointing year-on-year subscriber growth and pressured financial results, but strong cost efficiencies and growth in new businesses were achieved.

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

• Accelerated cost savings delivered ZAR 1.3 billion in permanent savings, with a target of at least ZAR 2.5 billion for FY25.

• Maintains over ZAR 10 billion in liquidity and expects to resolve the negative equity position by November 2024.

• Strategic focus on right-sizing the business, growing new revenue streams, digital migration, and investing in streaming via Showmax.

Financial highlights

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

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

• Free cash flow down 48% year-on-year to ZAR 600 million, reflecting lower EBITDA and higher Showmax investment.

• Adjusted core headline earnings dropped from ZAR 1.5 billion to ZAR 7 million.

• Debt remains at ZAR 12 billion, with a leverage ratio of 1.9x, well within the 2.5x covenant.

Outlook and guidance

• Cost savings target increased to ZAR 2.5 billion for FY25, with further savings expected from content renegotiations and operational efficiencies.

• Showmax investment expected to peak this year, with cash burn to be reduced in FY26.

• South African trading margin guidance remains in the mid-20s% despite insurance business sale.

• Currency impact expected to ease in H2 FY25 as comparatives normalize.

• Group expects to return to a positive net equity position by November 2024.