On 4 March 2019, the date of the group unbundling from Naspers Limited, the group allocated, for no consideration, an additional 5% stake in MultiChoice South Africa Holdings Proprietary Limited (MCSA) to Phuthuma Nathi Investments (RF) Limited and Phuthuma Nathi Investments 2 (RF) Limited (collectively Phuthuma Nathi). In terms of IFRS 2 Share-based payments, this transaction is treated as an equity-settled share-based payment. The value of the 5% allocated to Phuthuma Nathi shareholders has been calculated at R2.6bn which has been included in the summarised consolidated income statement and in retained earnings in the summarised consolidated statement of changes in equity.

After the allocation to the non-controlling interest, the transaction had an adverse impact on earnings and headline earnings of R1.9bn or 438 SA cents per share.

The transaction also caused the group’s effective tax rate to increase by 76%. Overall, the group’s effective tax rate increased from 59% in FY2018 to 151% in FY2019.