11.NON-IFRS PERFORMANCE MEASURES

The group has presented certain revenue, cost and trading profit metrics in constant currency, excluding the effects of changes in the composition of the group (non-IFRS performance measures). The non-IFRS performance measures are the responsibility of the board of directors and are presented for illustrative purposes. Pro forma information presented on a non-IFRS basis has been extracted from the group’s management accounts, the quality of which the board is satisfied with.

Shareholders are advised that, due to the pro forma nature of the non-IFRS performance measures it may not fairly present the group’s financial position, changes in equity, results of operations or cash flows.

The non-IFRS performance measures have been prepared to illustrate the impact of changes in foreign exchange rates and changes in the composition of the group on its results for the year ended 31 March 2022. The following methodology was applied in calculating the non-IFRS performance measures:

1. Foreign exchange/constant currency adjustments have been calculated by adjusting the current year’s results to the prior year’s average foreign exchange rates, determined as the average of the monthly exchange rates for that year. The constant currency results, arrived at using the methodology outlined above, are compared to the prior period’s actual IFRS results. The relevant average exchange rates (relative to the South African Rand) used for the group’s most significant functional currencies, were US dollar (FY22: 14.93; FY21: 16.30); Nigerian Naira (FY22: 27.66; FY21: 24.17); Angolan Kwanza (FY22: 39.60; FY21: 38.22); Kenyan Shilling (FY22: 7.44; FY21: 6.70) and Zambian Kwacha (FY22: 1.26; FY21: 1.24).
2. Adjustments made for changes in the composition of the group (or mergers and acquisitions) relate to acquisitions and disposals of subsidiaries. For mergers, the group composition adjustments include a portion of the prior year results of the entity with which the merger took place. There were no changes in the composition of the group during the respective reporting periods.
3. Excluding the impact of non-recurring and/or non-operational items from the group’s sustainable operational performance.

An assurance report issued in respect of the non-IFRS performance measures, by the group’s external auditor, can be found in the Assurance engagement report.

The adjustments to the amounts reported in terms of IFRS that have been made in arriving at the non-IFRS performance measures are presented in the tables below:

11.1Key performance indicators
As at 31 March 2021 
Reported		 2022 
Currency 
impact		 2022 
Organic 
growth		 2022 
Reported		 YoY 
% 
change		 YoY  
organic  
%  
change 
90-day active subscribers (’000)1 20 862 n/a  942  21 804  5 5 
South Africa 8 931 n/a  80  9 011  1 1 
Rest of Africa 11 931 n/a  862  12 793  7 7 
90-day active ARPU (ZAR)2      
Blended 185 (6) (2) 177  (4) (1)
South Africa 277 –  (8) 269  (3) (3)
Rest of Africa 115 (11) 6  110  (4) 5 
Subscribers (’000)3 16 356 n/a  284  16 640  2 2 
South Africa 8 177 n/a  (17) 8 160  – – 
Rest of Africa 8 179 n/a  301  8 480  4 4 
ARPU (ZAR)2      
Blended 232 (8) 5  229  (1) 2 
South Africa 299 –  (4) 295  (1) (1)
Rest of Africa 165 (16) 14  163  (1) 8 
1 Defined as all subscribers that have an active primary/principal subscription within the 90-day period on or before reporting date.
2 ARPU represents a non-IFRS unaudited operating measure of the average revenue per subscriber (or user) in the business on a monthly basis. The group calculates ARPU by dividing average monthly subscription fee revenue for the period (total subscription fee revenue during the period divided by the number of months in the period) by the average number of subscribers during the period (the number of subscribers at the beginning of the period plus the number of subscribers at the end of the period, divided by two). Subscription fee revenue includes BoxOffice rental income but excludes decoder insurance premiums and reconnection fees which are disclosed as other revenue in terms of IFRS.
3 Subscriber numbers are a non-IFRS unaudited operating measure of the actual number of paying subscribers at the end of the respective period, regardless of the type of programming package to which they subscribe.
11.2Group financials including segmental analysis

11.2.1Segmental results

As at 31 March 2021 
IFRS 
ZAR’m 		 2022 
Currency 
impact 
ZAR’m 		 20212 
Organic  
growth  
ZAR’m  		 2022 
IFRS 
ZAR’m 		 YoY 
% 
change		 YoY 
organic 
% 
change
Revenue1 53 410  (1 923) 3 590   55 077  3  7 
South Africa 34 327  –  1 288   35 615  4  4 
Rest of Africa1 17 234  (1 779) 2 463   17 918  4  14 
Technology 1 849  (144) (161)  1 544  (16) (9)
Trading profit 10 290  (58) 102   10 334  –  1 
South Africa 11 132  –  (100)  11 032  (1) (1)
Rest of Africa (1 408) (144) 339   (1 213) 14  24 
Technology 566  86  (137)  515  (9) (24)
1 Total group revenue and Rest of Africa revenue presented above includes losses of ZAR163m (FY21: gains of ZAR72m) related to fair-value movements on Nigeria futures contracts.

11.2.2Revenue and costs by nature

As at 31 March 2021 
IFRS 
ZAR’m		 2022 
Currency 
impact 
ZAR’m 		 20212 
Organic  
growth  
ZAR’m  		 2022 
IFRS 
ZAR’m 		 YoY 
% 
change		 YoY 
organic 
% 
change
Revenue 53 410 (1 923) 3 590   55 077  3  7 
Subscription fees1 44 683 (1 596) 2 174   45 261  1  5 
Advertising 2 848 (88) 1 149   3 909  37  40 
Set-top boxes 1 789 (83) 164   1 870  5  9 
Technology contracts and licensing 1 849 (144) (161)  1 544  (16) (9)
Other revenue 2 241 (12) 264   2 493  11  12 
Operating expenses 43 120 (1 865) 3 488   44 743  4  8 
Content 17 951 (749) 2 275   19 477  9  13 
Set-top box purchases 5 165 (224) 809   5 750  11  16 
Staff costs2 5 911 (278) 126   5 759  (3) 2 
Sales and marketing 2 351 (82) 366   2 635  12  16 
Transponder costs 2 623 (114) (113)  2 396  (9) (4)
Other 9 119 (418) 25   8 726  (4) – 
1 Subscription fees presented above includes losses of ZAR163m (FY21: gains of ZAR72m) related to fair-value movements on Nigeria futures contracts.
2 Excludes equity-settled share-based payment expense and in FY21, cash-settled share-based payments on closure of schemes.
11.3Reconciliation of headline earnings to core headline earnings

Core headline earnings excludes non-recurring and non-operating items – we believe this is a useful measure of the group’s sustainable operating performance. However, core headline earnings is not a defined term under IFRS and may not be comparable with similarly titled measures reported by other companies.

  2022
ZAR’m		 2021
ZAR’m		 %
change
Headline earnings attributable to shareholders (IFRS) 1 629 2 118  
Adjusted for (after tax effects and non-controlling interests):      
– Amortisation of other intangible assets1 87 54  
– Acquisition-related costs – 25  
– Equity-settled share-based payment expense 338 358  
– Foreign currency losses and fair value adjustments 1 305 508  
– Realised gains on foreign exchange contracts 91 114  
– Cash settled share-based payments on closure of SAR scheme – 98  
– Impact of SA tax rate reduction on deferred taxation 24 –  
Core headline earnings (ZAR’m) 3 474 3 275 6
Core headline earnings per ordinary share issued (SA cents) 814 767 6
Diluted core headline earnings per ordinary share issued (SA cents) 791 753 5
1 Includes ZAR55m (FY21: ZAR10m) related to the amortisation of intangible assets identified based on the final purchase price allocation fair-values on acquisition of KingMakers in FY22 and FY21.
11.4Reconciliation of cash generated from operating activities to free cash flow
  2022
ZAR’m		 2021
ZAR’m		 %
change
Cash generated from operating activities 12 723  13 909  (9)
Adjusted for:      
– Lease repayments1 (2 544) (2 543)  
– Net capital expenditure (1 058) (1 550)  
– Taxation paid (3 572) (4 095)  
Free cash flow 5 549  5 721  (3)
1 Includes the capital portion of all lease repayments and only interest on leased transponders.