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) in the following tables. The non-IFRS performance measures are the responsibility of the board of directors and is presented for illustrative purposes. 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 nature of the non-IFRS performance measures and the fact that it has been extracted from the group’s management accounts, 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 period ended 31 March 2019. 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 period’s results to the prior period’s average foreign exchange rates, determined as the average of the monthly exchange rates for that period. 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 (2019: 13.82; 2018: 12.91); Nigerian naira (2019:  26.28; 2018: 27.87); Angolan kwanza (2019: 20.54; 2018: 13.86); Kenyan shilling (2019: 7.33; 2018: 7.99) and Zambian kwacha (2019: 0.81; 2018: 0.74).
  2. Adjustments made for changes in the composition of the group (or M&A) 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. The following significant changes in the composition of the group during the respective reporting periods have been adjusted for in arriving at the
    non-IFRS performance measures:
Period   Transaction   Basis of
accounting		   Reportable
segment		   Acquisition/
disposal		  
Year ended 31 March  2018   Disposal of the group’s interest in MWEB   Subsidiary   South Africa   Disposal  
Year ended 31 March  2018   Acquisition of the group’s interest in Denuvo   Subsidiary   Technology   Acquisition  

The net adjustment made for all acquisitions and disposals that took place during the year ended 31 March 2019 amounted to a negative adjustment of R117m on revenue and a positive adjustment of R11m on trading profit.

An assurance report issued in respect of the non-IFRS performance measures, by the group’s external auditor, is available at the registered office of the company.

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:
11.1 Key performance indicators
 
  2018
Reported		   2019 
Currency 
impact 		   2019 
Organic 
growth 		   2019
Reported		   2019 
versus 
2018 
Reported 
% 		   2019 
versus 
2018 
Organic 
growth 
% 		  
Subscribers (’000s)*   13 476   n/a    1 621    15 097   12    12 
South Africa   6 921   n/a    526    7 447   8    8   
Rest of Africa   6 555   n/a    1 095    7 650   17    17   
ARPU (R)**                          
Blended   252   –    (11)   241   (4)   (4)  
South Africa   335   –    (13)   322   (4)   (4)  
Rest of Africa   160   (1)   –    159   (1)   –   
90-day-active subscribers (’000s)***   16 376   n/a    2 203    18 579   13    13   
South Africa   7 332   n/a    617    7 949   8    8   
Rest of Africa   9 044   n/a    1 586    10 630   18    18   
90-day-active ARPU (R)**                          
Blended   206   –    (9)   197   (4)   (4)  
South Africa   317   –    (15)   302   (5)   (5)  
Rest of Africa   115   (1)   –    114   (1)   –   
* Subscriber numbers are a non-IFRS unaudited operating measure of the actual number of paying subscribers at 31 March of the respective year, regardless of the type of programming package to which they subscribe.
** 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 2). 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.
*** All subscribers that have been active in the previous 90 days.
11.2 Group financials including segmental analysis
 

11.2.1 Segmental results

   2018 
IFRS 
R知 		    2019 
M&A-related 
R知 		    2019 
Currency 
impact 
R知 		    2019 
Organic 
growth 
R知 		    2019 
IFRS 
R知 		    2019 
versus 
2018 
IFRS 
% 		 2019 
versus 
2018 
Organic 
growth 
% 		   
                               
   Revenue     47 452     (117)    111     2 649     50 095     6  6    
   South Africa     32 702     (178)    –     1 172     33 696     3  4    
   Rest of Africa     13 106     –     (10)    1 740     14 836     13  13    
   Technology     1 644     61     121     (263)    1 563     (5) (16)   
   Trading profit     6 321     11     (1 053)    1 735     7 014     11  27    
   South Africa     10 446     (12)    –     (235)    10 199     (2) (2)   
   Rest of Africa     (4 591)    –     (1 018)    1 874     (3 735)    19  41    
   Technology     466     23     (35)    96     550     18  21    

 

11.2.2 Revenue and costs by nature

  2018 
IFRS 
R知 		   2019 
M&Arelated 
R知 		   2019 
Currency 
impact 
R知 		   2019 
Organic 
growth 
R知 		   2019 
IFRS 
R知% 		   2019 
versus 
2018 
IFRS 
% 		 2019 
versus 
2018 
Organic 
growth 
% 		  
                               
  Revenue    47 452    (117)   111    2 649     50 095    6  6   
  Subscription fees   38 547    (178)   (45)   2 924    41 248    7  8   
  Advertising    3 092    –     16    72     3 180    3  2   
  Set-top boxes    1 847    –     6    189     2 042    11  10   
  Technology contracts and licensing    1 639    61     119    (255)   1 564    (5) (16)  
  Other revenue    2 327    –     15    (281)   2 061    (11) (12)  
  Operating expenses    41 131    (128)   1 164    914     43 081    5  2   
  Content    16 793    –     471    451     17 715    5  3   
  Set-top box purchases    5 435    –     142    479     6 056    11  9   
  Staff costs    5 454    7     120    (40)   5 541    2  (1)  
  Sales and marketing    1 944    (6)   45    484     2 467    27  25   
  Transponder costs    2 626    –     76    (95)   2 607    (1) (4)  
  Other    8 879    (129)   310    (365)   8 695    (2) (4)  
11.3 Reconciliation of headline earnings to core headline
 

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.

   2019 
R知 		    2018 
R知 		    % 
change 		   
Basic and diluted headline (loss)/earnings attributable to shareholders (IFRS)    (1 550)    1 797          
Adjusted for (after tax effects and non-controlling interests):                      
– equity-settled share-based payment expenses     265     68          
– empowerment transaction     1 923     –          
– amortisation of other intangible assets     55     45          
– foreign currency losses and fair-value adjustments     1 434     409          
– realised losses on foreign exchange contracts     (564)    (691)         
– non-recurring current and deferred taxation impacts     –     8          
–  acquisition-related costs     237     5          
Core headline earnings     1 800     1 641     10    
Core headline earnings per ordinary share (SA cents)    410     374     10    
11.4 Reconciliation of cash generated from operating activities to free cash flow
 
   2019 
R知 		    2018 
R知 		    % 
change 		   
Cash generated from operating activities     9 449     7 243     31    
Adjusted for:                      
– capitalised finance lease repayments (including interest)    (1 529)    (1 424)         
– net capital expenditure     (978)    (759)         
– interest received     –     250          
– investment income     19     18          
– taxation paid     (3 694)    (3 664)         
Free cash flow     3 267     1 664     96