CFO performance review
Restoring the Rest of Africa business to profitability was a highlight.
“However, the South African consumer environment weakened significantly in the second half impacted by permanent high stages of loadshedding. This had a significant impact on group margins and cash flows.”
Tim Jacobs
Group CFO


growth of 1.7m (8%) to
and SA margin pressure
profitability delivering
with inflation at
growth of 2% to
(ZAR7.5bn in cash combined with ZAR9.0bn in available facilities)
in February 2023
on 4 April 2023
on the unclear economic outlook
and Showmax investment cycle
90-day active subscribers (m)

Operational performance review
The group added 1.7m 90-day active subscribers, which was primarily supported by a strong performance in the Rest of Africa.
The group grew its 90-day active subscriber base by 8% YoY (or 1.7m) and now reaches 23.5m households across the continent.
This was mainly due to the strong performance in the Rest of Africa, which added 1.4m subscribers, underpinned by the investment in decoder subsidy and marketing for the FIFA World Cup. These investments will be paid back in the first half of FY24 through the ongoing margin generated from this cohort of customers.
In contrast, South African 90-day subscribers grew by 0.3m YoY due to a challenging consumer environment. Permanent high stages of loadshedding, interest rate hikes and elevated inflation levels have left a large portion of the group’s customer base unable to watch or afford video entertainment services consistently.
The 90-day subscriber base is split between 14.2m households (60%) in the Rest of Africa and 9.3m households (40%) in South Africa.
Users of the group's DStv app and Showmax services continue to grow as online consumption increases. The overall online user base increased by 12% YoY, with the growth rate for paying Showmax subscribers at a strong 26%.

Review of financial performance
"Overall, group trading profit decreased 3% to ZAR10.0bn (up 5% organic), due to an adverse ZAR0.9bn foreign exchange impact and weaker SA earnings. This resulted in group trading profit margins decreasing from 19% to 17%."
FY21 (ZAR'bn) |
FY22 (ZAR'bn) |
FY23 (ZAR'bn) |
Organic growth FY22 % |
Organic growth FY23 (%) |
Notes | |
Revenue | 53.4 | 55.1 | 59.1 | 7 | 4 | 1 |
---|---|---|---|---|---|---|
Costs | (43.1) | (44.7) | (49.1) | 8 | 3 | 2 |
Trading profit | 10.3 | 10.3 | 10.0 | 1 | 5 | 3 |
Net interest paid | (0.7) | (1.0) | (1.0) | |||
Taxation | (4.8) | (4.2) | (3.8) | 4 | ||
Non-controlling interest | (1.9) | (1.5) | (0.6) | 5 | ||
Other gains/losses | 0.4 | (0.2) | (1.0) | 6 | ||
Core headline earnings | 3.3 | 3.5 | 3.5 | 6 | 2 | 7 |
Core headline earnings per share | 767 | 814 | 828 | 6 | 2 | 7 |
TP margin | 19 | 19 | 17 | 3 | ||
Effective tax rate | 54 | 59 | 417 | 4 |
Note: FY23 revenue includes ZAR76m loss (FY22: ZAR163m losses, FY21: ZAR72m gains) related to fair-value movements on Nigeria futures contracts. |
Revenue
Group organic revenue growth reduced from 7% to 4% (ZAR59.1bn) mainly on the back of a 2% decline in SA revenue due to lower levels of subscriber activity. Rest of Africa delivered a 16% organic YoY increase and now contributes 38% of group revenue from 33% in the prior year. Advertising revenues were up a solid 7% (6% organic) supported by the FIFA World Cup and local content properties. Irdeto’s revenues declined 4% (17% organic) as ongoing global supply constraints and the decision to exit all Russian based operations impacted negatively on performance. Insurance premiums grew a strong 22% YoY, with new products such as funeral cover gaining traction.
Costs
Operating leverage (on an organic basis) for the year remained positive at +1 percentage points despite the investment in the FIFA World Cup and some once-off cost benefits in the prior year. Overall costs increased 3% YoY on an organic basis, largely due to the group’s established cost optimisation programme that delivered a further ZAR1.3bn in cost savings, well ahead of the ZAR0.8bn target.
Trading profit
Group trading profit decreased 3% to ZAR10.0bn (up 5% organic), due to an adverse ZAR0.9bn foreign exchange impact and weaker SA earnings. The group trading margin declined from 19% to 17%. The Rest of Africa business returned to profitability, generating a positive trading profit of ZAR0.9bn, representing a 4% trading profit margin. The impact of South African macro challenges, together with the group’s increased investment in Showmax, caused SA margins to contract from 30.9% in the prior year to 24.2% (within the 23% – 28% guided range).
Taxation
The group’s effective tax rate increased from 59% in FY22 to 417% in FY23, due to increased foreign exchange losses (which resulted in a lower profit before taxation), ZAR2.0bn impairment of the investment in KingMakers (detailed in the review of financial position below), an increase in uncertain tax positions recognised and withholding taxes incurred in the Rest of Africa segment.
Non-controlling interest
The decrease in non-controlling interests predominantly relates to increased Nigerian cash extraction losses (FY23: ZAR2.4bn versus FY22: ZAR1.1bn) and decreased profitability in the South African business.
Other gains/losses
Other losses increased in FY23 due to the group’s share in KingMakers increased losses and the impact of non-controlling interest on foreign currency movements and taxation.
Core headline earnings
Core headline earnings, the board’s measure of sustainable business performance, increased 2% YoY to ZAR3.5bn. This was mainly attributable to the improved contribution from the Rest of Africa and positive realised foreign exchange movements, tempered by the lower profits in SA.

Review of cash generation
"Free cash flow of ZAR2.9bn was down 48% YoY, mainly due to negative working capital movements. The group traditionally has a working capital cycle that fluctuates materially from year to year depending largely on events and content right payments."
FY21 (ZAR'bn) |
FY22 (ZAR'bn) |
FY23 (ZAR'bn) |
FY22 growth (%) |
FY23 growth (%) |
Notes | |
Trading profit | 10.3 | 10.3 | 10.0 | |||
---|---|---|---|---|---|---|
Non-cash adjustments | 4.2 | 3.4 | 3.1 | 1 | ||
Working capital investment | (0.6) | (1.0) | (3.1) | 2 | ||
Cash from operations | 13.9 | 12.7 | 10.0 | (9) | (22) | |
Capital expenditure | (1.6) | (1.1) | (1.2) | 3 | ||
Lease repayments | (2.5) | (2.5) | (2.5) | |||
Taxation paid | (4.1) | (3.6) | (3.4) | 4 | ||
Free cash flow | 5.7 | 5.5 | 2.9 | (3) | (48) | |
Less: Net interest paid | 0.2 | 0.0 | (0.2) | 5 | ||
Less: Dividends paid by holding company | (2.4) | (2.4) | (2.4) | 6 | ||
Less: PN and other NCI dividends | (1.5) | (1.5) | (1.5) | 6 | ||
Less: Share buy-backs | – | (0.3) | – | |||
Less: Settlement of share-based compensation awards | (0.5) | (0.1) | (0.2) | |||
Add: Proceeds/(Repayment) from long and short-term loans raised | 1.4 | 2.6 | 4.4 | 7 | ||
Less: Investments in associates | (1.4) | (4.2) | (0.2) | 8 | ||
Less: Settlement of contingent consideration | – | (0.5) | – | 9 | ||
Less: Other cash movements | (0.1) | (0.2) | (0.1) | |||
Retained free cash flow | 1.4 | (1.0) | 2.7 | |||
Add: Decrease/(Increase) in restricted cash | (0.1) | 0.2 | 0.2 | 10 | ||
Foreign exchange translation of foreign cash balances | (1.9) | (1.6) | (1.5) | 11 | ||
(Decrease)/lncrease in cash and cash equivalents | (0.6) | (2.4) | 1.4 |
Non-cash adjustments
Non-cash adjustments include depreciation, amortisation, net realisable value adjustments on inventory and non-cash hedge accounting movements.
Working capital investment
Working capital investment increased predominantly due to a ZAR1.0bn negative cash movement in payables. This mainly relates to the timing of payments brought forward due to a major financial system upgrade which went live on 1 April 2023. Programme and film rights outflows also contributed ZAR0.9bn due to sports rights prepayments and an increase in local content investment carried on the balance sheet (including the production of Shaka Ilembe that will air in June 2023).
Capital expenditure
Capital expenditure of ZAR1.2bn was higher than the prior year, although remained within the normal range for the group of between ZAR1bn and ZAR1.5bn.
Taxation paid
As one of the largest taxpayers in Africa, the group paid direct cash taxes of ZAR3.4bn, marginally down from the prior year (FY22: ZAR3.6bn) primarily due to lower taxable profits generated in South Africa.
Net Interest paid
Net interest paid increased due to rising SA interest rates and the group’s higher average debt position over the year. This included a new term loan raised in February 2023, which contributed an additional ZAR351m in interest costs.
Dividends
The third MCG dividend was paid in FY23 at ZAR2.5bn (net outflow of ZAR2.4bn due to the impact of treasury shares held) while dividends to Phuthuma Nathi were the same as the prior year at ZAR1.5bn.
Proceeds/(Repayment) from long and short-term loans raised
Net proceeds from short- and long-term loans predominantly relate to the ZAR8bn drawdown on the new ZAR12bn term loan facility to be used for working capital purposes. This is net of the early settlement (ZAR2.3bn) of the KingMakers term loan. Additionally, the group settled ZAR1.3bn in quarterly instalments of existing working capital term loan facilities. During FY23, the group utilised short-term banking facilities of ZAR4.9bn, which were fully repaid as at 31 March 2023.
Investments in associates
Investment in associates relates to investments made in Bidstack Group PLC (ZAR110m), AURA B.V. (ZAR30m), Africa Cricket Development Proprietary Limited – SA20 (ZAR23m) and Moment Holdings Limited (ZAR59m). FY22 relates to the additional investment of USD282m R4.1bn in KingMakers which took the group’s ownership from 20% to 49.23%.
Settlement of contingent consideration
In the prior year, USD31m (ZAR0.5bn) was paid to KingMakers after the second share investment triggered earn-out targets.
Decrease/(Increase) in restricted cash
Restricted cash relates to initial margin deposits on Nigerian futures which were used to hedge Naira currency depreciation. All outstanding futures contracts have now matured at 31 March 2023.
Foreign exchange translation of foreign cash balances
The translation of foreign cash reserves includes losses of ZAR2.4bn (FY22: ZAR1.1bn) incurred in Nigeria, within the Rest of Africa segment, due to differences between the I&E rate used by the group for translation and the parallel rate at which cash has been extracted. This has been partially offset by an increase in the ZAR equivalent of cash held in USD.
Review of financial position
“The strength of the balance sheet remains a core focus in supporting the group’s future growth ambitions. The strong financial position is after ZAR4.0bn was utilised to settle the MCG and Phuthuma Nathi (PN) dividends in September and an early ZAR2.3bn settlement of the KingMakers term loan in March 2023.”
FY21 (ZAR'bn) |
FY22 (ZAR'bn) |
FY23 (ZAR'bn) |
FY22 growth (%) |
FY23 growth (%) |
Notes | |
Non-current assets | 23.4 | 25.6 | 24.6 | 9 | 4 | 1 |
---|---|---|---|---|---|---|
Current assets | 18.9 | 17.3 | 23.0 | (9) | 33 | 2 |
Total assets | 42.3 | 42.9 | 47.6 | 1 | 11 | |
Non-current liabilities | 14.3 | 13.9 | 19.6 | (3) | 41 | 3 |
Current liabilities | 18.6 | 20.9 | 22.7 | 12 | 9 | 4 |
Total liabilities | 32.8 | 34.8 | 42.3 | 6 | 22 | |
Equity | 9.5 | 8.1 | 5.3 | (15) | (35) | |
Key ratios | ||||||
Liquidity | 1.0 | 0.8 | 1.0 | 5 | ||
Leverage (including leases) (times) | 0.54 | 0.77 | 1.08 | 6 | ||
Return on capital employed | 40% | 45% | 43% | 7 | ||
Interest cover (times) | 25.4 | 27.5 | 17.1 | 8 |
Non-current assets
Non-current assets were mainly flat relative to the prior year, but included the ZAR2.3bn upwards revaluation of property plant and equipment, goodwill and investments in associates USD assets given the weaker ZAR and new investments in associates amounting to over ZAR0.2bn. Given the notable changes in discount rates applicable to global gaming and technology companies and Nigeria in particular, together with the sharp depreciation in parallel exchange rates in Nigeria, an impairment review was conducted on KingMakers as at 31 March 2023. Although in local currency the business remains ahead of original forecasts, the marked increase in discount rates for the Nigerian operation, a weaker currency forecast, combined with the impact of exiting some markets, resulted in the recognition of a ZAR2.0bn impairment loss. The group’s 51.23% investment in KingMakers is now valued at ZAR4.6bn (FY22: ZAR5.8bn).
Current assets
Current assets increased 33% predominantly due to a ZAR2.2bn increase in trade and other receivables. This includes ZAR0.6bn in tax security deposits made in relation to the ongoing Nigerian tax audit and a ZAR0.6bn increase in trade receivables driven by a delay in receipts which came through in early April. Cash balances increased ZAR1.3bn YoY on the back of the unused portion of the ZAR8bn drawn down on the new non-current term loan facility. Derivative financial instruments increased ZAR1.4bn YoY mainly as a result of favourable mark-to-market of forward exchange contracts due to the weakening of the ZAR.
Non-current liabilities
The material increase in non-current liabilities is primarily due to a new ZAR12bn term loan facility which was finalised in February 2023. The facility is a five-year term loan with a bullet repayment profile of 5-years from each drawdown date. The facility bears interest at JIBAR +1.44 percentage points payable quarterly in arrears. The first drawdown of ZAR8bn was made in March. The amount shown above is net of the ZAR2.3bn early settlement of the KingMakers term loan.
Current liabilities
The increase in current liabilities is due to increased programme and film rights liabilities (ZAR1.6bn) resulting from our local content strategy and increased tax liabilities (ZAR1.2bn). This is partially offset by a decrease in short-term loans due to the early settlement of the KingMakers term loan.
Liquidity
Measured as current assets divided by current liabilities. The increase from 0.8 in FY22 to 1.0 in FY23 is due to increased duration of financial liabilities following the introduction of the new term loan. Based on the group’s healthy cash generation, available facilities and low leverage ratio, management is comfortable with the group’s liquidity.
Leverage (including leases) (times)
Measured as net debt (lease liabilities plus working capital and term loans less cash) divided by earnings before interest, taxation, depreciation and amortisation (EBITDA). Leverage remains low with a net debt: EBITDA ratio of 1.08x at the end of March (FY22: 0.77x). This provides financial headroom to navigate both challenges (including the strained South African environment) and opportunities to expand the business into the future.
Return on capital employed
Measured as trading profit divided by average total assets less average current liabilities. While return on capital employed declined by 2% YoY it remains at a very healthy 43%. This decrease was as a result of a 3% YoY decrease in trading profit and an increase in the net average capital employed.
Interest cover (times)
Measured as EBITDA divided by net interest paid. Interest cover has reduced from 27.5 to 17.1 due to a decrease in profitability and ZAR0.3bn increase in net interest paid. It remains well above covenant and treasury policy limits.
Showmax partnership with Comcast
The partnership with Comcast (owners of NBCUniversal, Sky and Peacock) in our Showmax business, announced in March 2023, represents a significant step-up for the group’s future OTT ambitions. The new Showmax business will bring the world’s best local and international content to Africa and will be supported by Peacock’s scalable and feature rich technology platform. The transaction successfully closed on 4 April 2023 with MCG owning 70% of the new Showmax Group and NBCUniversal owning the remaining 30%. New products and launch dates will be announced in due course, with the platform expected to go live in the second half of FY24.
Sports betting (KingMakers)
KingMakers continued its strong operational growth, generating a 51% increase in gross gaming revenues to USD198m (ZAR3.4bn). As a result, the group's share of the revenue from KingMakers now exceeds external revenues from the Technology segment. The group recorded a loss after tax amounting to USD28m (ZAR0.5bn) as increased revenues were offset by investment in people, product and technology to further scale the business, as well as cash extraction losses out of Nigeria of USD13m.
Earnings per share are impacted by the impairment of the KingMakers group discussed above.
Fin-tech (Moment)
During FY23 a partnership (Moment Holdings based in the UK) was reached between the group, General Catalyst (one of the world's largest fin-tech investors) and Rapyd (a global fin-tech company with success across 100 countries and a 2021 Series E funding round conducted at a USD9bn valuation).
The group contributed USD3.3m in an initial funding round for a 25.5% stake in Moment. During the year, Moment finalised commercial deals with MCG operating companies, obtained licences to operate in key markets and started building a strong executive team. This positions them to launch new products that specifically address the group's needs, from the second half of FY24.
New term loan facility
To improve the group's financial flexibility, fund working capital requirements and improve the group's cost of capital a new ZAR12bn term loan facility was finalised in February 2023.
The facility is a 5-year term loan with two anticipated drawdowns and a bullet repayment profile five years from each drawdown date. The facility bears interest at JIBAR +1.44 percentage points payable quarterly in arrears. The first drawdown of ZAR8bn was made in March.
Nigeria tax dispute
The group has two ongoing Nigerian tax matters, one involving MultiChoice Nigeria Limited and the second involving MultiChoice Africa Holdings BV. On 16 February 2022, an agreement was reached with the Federal Inland Revenue Service (FIRS) that legal proceedings will be stayed and that an integrated tax audit will commence for both entities.

The audit process, which covers corporate income tax, value added tax and transfer pricing is ongoing, but has been taking longer than anticipated. As part of the process, the group has made a further ZAR0.6bn in tax security deposits during FY23 on a without-prejudice and good-faith basis. The total deposit balance now amounts to ZAR1.3bn. These have been recorded as current receivables pending the outcome of the audit process.
Based on the latest facts and circumstances available, no tax provision has been made, nor has a contingent liability been disclosed in the year-end results. The group maintains its position as a law-abiding corporate citizen and continues to engages constructively with FIRS to bring the audit to a fair conclusion.
Share transactions
The group transferred 4.5m treasury shares (valued at ZAR0.5bn on the date of transfer) between two group companies, to fund the current year's awards to employees under the group's restricted stock unit (RSU) share plan. At the end of FY23, a total of 0.1m shares at an average price of ZAR120 per share remain unallocated for future use and future awards will continue to be funded by share purchases.
Dividend
In view of the challenging South African market, the uncertain currency outlook in particular relating to the ZAR and Naira, the funding of the Rest of Africa business and the investment required to accelerate growth in Showmax, no dividend has been declared.
Appreciation
I would like to thank the board for their guidance and the Group Executive Committee for their support and leadership during the year. I also wish to express my appreciation for the dedication and hard work of our finance teams across the group. I would like to thank our shareholders for their interest and investment in MultiChoice and finally to our customers without whose support these results would not be possible.
Tim Jacobs
Group CFO