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Avusa year end results out

Avusa has reported 18% growth in Headline earnings per share (HEPS), 13% increase in dividend per share and an ungeared balance sheet for the financial year ending 31 March 2011.
Avusa year end results outDuring the reporting period, volumes and market shares were retained or grown across business segments. Revenue grew 13% and accompanied by an improved gross profit percentage and an operating costs margin comparable to last year. HEPS rose from 149c to 176c. The balance sheet remains strong with cash and cash equivalents at the end of the year at a healthy R529 million (2010 - R504 million).

The acquisition of UHC (Retail Solutions) in November 2010 strongly supported the group's strategy to grow new markets, diversify revenues and increase earnings. Retail Solutions' profit performance for the period November to March exceeded warranty levels. The investment is value-accretive and it reflects in the EPS and HEPS of the group.

Prakash Desai, group CEO, said, "Our strategy to diversify revenue streams and increase earnings across the group has been vindicated. We have solid cash generation as indicated by an increased EBITDA contribution of 32 and I am pleased that we can deliver a 36% increase in the dividend amount distributed."

Group results

The Media Business unit enjoyed strong profit growth, aided by the diversification of revenue streams following a refocus of the advertising team on key advertising sectors. Revenue from advertising grew by 10%.

Whilst the Books and Maps business unit's revenue was under pressure, it managed to increase EBIT by 12%. The business unit remains focused on improving quality of earnings and reducing costs. The retail business unit experienced mixed results with good growth in academic books sales; general book sales however, experienced price deflation as a result of the strong rand. The World Cup diverted discretionary spend away from books., the online store that sells DVDs, CDs, books and electronic games showed good growth in a developmental stage.

The Entertainment Business unit had a mixed year with a positive start to the year and a weaker second six months. Home entertainment was negatively impacted by poor retail support, content weakness and price deflation. Cinemas managed to increase average ticket price and confectionary sales, however weaker content in the second half of the reporting period impacted overall performance. Music delivered a negative EBIT from a material loss of market share and interactive incurred stock write-offs of R19 million. All categories of home entertainment (inclusive of music and interactive gaming) are now wholly integrated for greater efficiency.

The Digital Business unit achieved marginally higher revenue compared to last year; however profit contributions were impacted by reinvestments in new-generation products at I-Net Bridge and Career Junction.

"We will continue to make prudent investments as we pursue long term growth strategies. The group remains well positioned to capitalise on opportunities and an anticipated improvement in the economy," concludes Desai.

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