Revenue for the period rose by 52% to R1 953 million (2003: R1 284 million), while profit from continuing operations before exceptional items leapt 800% from R17 million in 2003 to R153-million.
Headline earnings per share increased by 727% from 14c in the same period last year to 119c.
The results include positive contributions from the acquisition of the Sowetan and Johncom's additional interest in M-Net/SuperSport.
Group CEO Connie Molusi said today he was delighted at the Group's record performance. "The results reflect the benefit of the restructuring, the focus by management on the core businesses, and a unified corporate structure over the past 15 months," said Molusi.
With increased consumer spending in a low interest rate environment, Johncom was looking forward to good Christmas sales and consequently a robust second half performance to end March 2005, said Molusi.
Group Finance and Operations Director Prakash Desai said it was particularly encouraging that Johncom had performed so well in the first half of the year, as the second half, which includes the Christmas holiday season, was traditionally its stronger trading period.
Desai noted that revenue, margin and financing had all showed an improvement on the same period in the prior year.
Johncom announced in April it was increasing its stake in M-Net/SuperSport from 26.03% to 38.56% at a cost of R287 million, following the delisting of M-Net/SuperSport in terms of a scheme of arrangement.
This means that M-Net/Super\Sport is now jointly controlled by Johncom and Naspers Limited. Thus, for the first time in these results, Johncom is proportionately consolidating its interest in M-Net/SuperSport.
But even excluding this accounting change, Johncom's core businesses performed powerfully, with profit from operations increasing 141%.
During the half year under review, Johncom also acquired New Africa Publications, giving it control of the Sowetan and the remaining 50% of Sunday World. The contribution from these acquisitions is not material in the reporting period.
Operational Review
A strong upturn in advertising spend benefited the group's Media titles, with all newspapers performing well, in particular the flagship Sunday Times and the group's Eastern Cape newspapers. Circulation and advertising sales of the relaunched Sowetan are growing strongly and management is confident this title will reclaim its position as one of the leading newspapers in SA.
Magazines bucked the overall trend of a static market and grew key circulations, while the digital operations turned in a strong performance, sharply up on the previous year.
In the Retail division, both Exclusive Books and Nu Metro Theatres benefited from management attention and better retail trading conditions. Nu Metro grew attendances by nearly 8%, well ahead of general market conditions and now has the top three cinemas in the country.
The Books & Maps division held its own in a soft market, with offshore operations yielding mixed performances.
The Home Entertainment division showed strong growth in sales on last year on the back of good movie titles, but piracy, which continues to erode sales of new releases, and higher-than-expected trade credits and content shifts, limited the growth in profits. A strong line-up of product for the second half, backed by energetic marketing, bodes well for the full-year results.
The Music division performed well to grow results on the previous year, largely through improved margins, effective cost control and strategic marketing. A soft product line-up, lacking major hits, impacted revenues, but management is optimistic for the second half.
Expansion by the Africa division continued, with further cinema sites and two new media stories planned in the next six months. The Business Day newspaper in Nigeria, of which Johncom owns 51%, is showing steady improvement. Further expansion in 2005 and 2006 is planned.
Johncom's platform businesses, including Nu Metro Distribution, Compact Disc Technologies (CDT) and warehousing and logistics company Entertainment Logistics Services (ELS) performed well.
The Pay television operations of M-Net/SuperSport increased subscriber revenue on a higher subscriber base, with advertising revenue also improving. However, the strong rand impacted negatively on revenue from the rest of Africa.
Associated company Caxton & CTP Publishers and Printers Limited performed strongly, and Johncom's share of profits for the period was ahead of both expectations and last year.
Note: Detailed results may be viewed on the website www.johncom.co.za.
