MultiChoice Group (MCG) H2 2025 earnings summary

Executive summary

• FY2025 was marked by significant macroeconomic headwinds, including currency devaluation and weak consumer spending, leading to an 8% year-on-year decline in the customer base to 14.5 million active subscribers.

• New revenue lines such as DStv Internet, DStv Stream, KingMakers, and Showmax showed strong growth, with Showmax's paying base up 44% year-on-year.

• The business delivered ZAR 3.7 billion in cost savings, well above the revised target, offsetting topline pressure.

• The proposed acquisition by CANAL+ is progressing, with regulatory milestones achieved, a mandatory offer extended to October 2025, and Competition Commission approval recommended.

Financial highlights

• Trading profit before investments and FX was up 20% year-on-year, but reported trading profit fell 49% to ZAR 4 billion due to ZAR 3 billion in FX pressure and increased Showmax investment.

• Group revenue reached ZAR 50.8 billion, up 1% organically but down 9% on a reported basis due to currency weakness.

• Adjusted core headline earnings decreased by ZAR 2.1 billion to a loss of ZAR 800 million, down 19% year-on-year.

• Free cash flow swung to a ZAR 516 million outflow, with year-end cash at ZAR 5.1 billion and a leverage ratio of 2.26x.

• Subscription income fell 8% year-on-year, with both South Africa and Rest of Africa experiencing subscriber losses.

Outlook and guidance

• Strategic focus remains on profitability, cash flow, and cost savings, with a ZAR 2 billion cost-saving target for FY2026.

• Priorities include maintaining South Africa trading margins in the mid-20s, returning rest-of-Africa to profitability, and reducing Showmax trading losses.

• Focus on closing the Canal+ deal before the 8 Oct 2025 long-stop date and fulfilling regulatory conditions.

• Expanding partnerships, executing product and pricing initiatives, and driving growth in ancillary businesses.