Tiso Blackstar feels advertising pinch


Tiso Blackstar feels advertising pinch

Published Date: 2018-03-28 | Source: Stephen Gunnion | Author: Stephen Gunnion

Tiso Blackstar feels advertising pinch

The private equity investor has delayed a R40 million special dividend and says it will reconsider paying it after it's sold its Kagiso Tiso stake

Political instability and a flat economy last year led to a drop in advertising - bad news for the media companies that rely on marketing spend for their bread and butter. Private equity group Tiso Blackstar, owner of titles including the Sunday Times, Financial Mail, Business Day, Sowetan and Sunday World, felt the impact of that. Media assets also include television and radio stations and it has interests in the retail marketing and steel industries as well.

The group says its core businesses delivered a good performance in the six months ended December despite tough trading conditions, revenue rising 2.4% and combined earnings before interest, tax, depreciation and amortisation (EBITDA) up 6.2%. Earnings per share rose 8.7% to 19.02c and headline earnings per share are up 570% 20.44c. It's not paying an interim dividend and says a R40 million special dividend will be reconsidered after it's sold its interest in investment holding company Kagiso Tiso Holdings (KTH).

Revenue and EBITDA at its media segment were 5.9% and 4.6% lower respectively due to softer advertising but it managed to cut costs through restructuring and says new revenues from digital media and hosting of events are showing promising growth. The successful launch of its BusinessLive premium paywall product has created a new revenue stream from digital subscribers. The loss-making Times newspaper was closed and replaced with the digital Times Select offering.

Retail marketing business Hirt & Carter grew revenue and EBITDA by double digits, with growth across most units. It says the integration of Uniprint is expected to also yield positive results going forward. Non-core results form its steel interests, Robor and Consolidated Steel Industries, as well as KTH detracted from a good performance from its core businesses.

Tiso Blackstar says it's seen improved trading so far in the second half of its financial year, with improved business confidence driving growth in marketing spend. It plans to reduce or sold its non-core steel holdings by the end of the year so it can reconsolidate them from its results. Earlier this month, it announced it was cancelling its listing on London's Alternative Investment Market (AIM) due to low trading volumes.

Its shares sank 12% to R5.90 yesterday.

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