MultiChoice Group Limited

MultiChoice reported group revenue of ZAR 50.8 billion, up 1% organically, but down 9% reported due to currency weakness. Reported trading profit was ZAR 4 billion, versus ZAR 7.9 billion last year, while organic trading profit was ZAR 7.2 billion, down 9% year over year. South Africa trading profit was ZAR 9.4 billion, up ZAR 647 million, with a 28.6% margin; Rest of Africa organic trading profit increased to ZAR 2.3 billion, but reported trading loss was ZAR 800 million because of FX. Free cash flow was a ZAR 516 million outflow, cash balance was ZAR 5.1 billion, debt was ZAR 11.1 billion, and leverage was 2.2x including satellite leases. For FY26, management guided to trading margins in the mid-20s in South Africa, a return of Rest of Africa to profitability, lower Showmax losses, and at least ZAR 2 billion of cost savings.

Calvo Mawela said FY25 was a challenging year shaped by cost-of-living pressure, a weaker naira, and a peak Showmax investment cycle, but stressed the business responded decisively with cost efficiencies and new revenue lines. He highlighted growth momentum in DSTv Internet, DSTv Stream, KingMakers and Showmax, and said the business is proactively adapting to industry shifts toward streaming, aggregation and sports rights. On strategy, he emphasized local content, sports, and broader platform offerings, while sounding constructive on the CANAL+ transaction and its potential to strengthen scale, resilience and long-term competitiveness.

Tim Jacobs said earnings were hit by weak subscriber growth, full-year naira depreciation, and Showmax spending expensed through the income statement. He said the core business improved by ZAR 1.6 billion, trading profit before investments and FX rose 20%, and sustainable cost savings of ZAR 3.7 billion represented 7.9% of the cost base; decoder subsidies were cut by another ZAR 400 million. He also noted organic operating leverage would have been positive 3.2% excluding Showmax, cash ended at ZAR 5.1 billion with ZAR 3 billion of undrawn facilities, and the dividend was lowered to ZAR 1.65 billion because of balance-sheet and covenant caution.

Analysts focused on pricing, decoder subsidies, Showmax costs, and whether Showmax price increases would be recurring. Management said pricing should generally track inflation, though it may be staggered and still affect subscribers, and that South Africa and Rest of Africa require different subsidy strategies because of different market conditions. On Showmax, management said the cost base includes some startup and platform-development expense but is still not sustainable, and that they are working on material cost reductions and structural changes; they also said the recent price increase did not materially change subscriber trends. Questions also addressed subscriber attrition, the CANAL+ process, and the dividend cut; management said attrition has improved year over year, regulatory approvals are progressing, and the dividend reduction was driven by capital preservation, negative FX impacts, and covenant protection rather than intercompany loans.