Chief executive's report

Esmaré Weideman

Esmaré Weideman
Over the past year we have worked hard at rightsizing operations to unlock efficiencies and cut costs in our print media businesses to ready Media24 for the future. We also stepped up investment in new growth areas – ecommerce, online job classifieds and digital media – and I am pleased to report that these largely met or exceeded our expectations.

However, the sluggish economy, together with a rapidly changing advertising landscape, increasing pressure on consumer spend and accelerated transition from print to digital and mobile platforms, made for a rather choppy trading environment. Eskom’s load shedding and the rolling post office strikes added to our difficulties.

Like our international peers, Media24’s print media operations continued to face industry headwinds. Lower advertising and circulation revenues – still our biggest sources of revenue – and increased investment in our new business areas hampered our trading performance. Revenue grew marginally to R8,3bn, but trading profit ended the year 52% lower than the previous year, on R247m.

On the operational front, however, there were many noteworthy highlights in the year that we proudly celebrated our 100th birthday. We retained our leading print and digital market shares across the board and successfully established the Afrikaans digital destination Netwerk24 – already the biggest paid-for news site in South Africa.

Careers24 grew exponentially, our online fashion business, Spree, gained market share and News24 Nigeria gained momentum. We reorganised our media operations to drive a unified digital strategy – our combined reach now exceeds 2m unique visitors a day, more than 70% via mobile devices. Our News, Lifestyle and Books divisions again scooped all the major industry prizes for journalistic and publishing excellence, while our digital and ecommerce teams also brought home many prestigious awards. Our printing operation, Paarl Media Group, listed on the JSE Limited’s stock exchange (JSE) as Novus Holdings Limited (“Novus Holdings”) to unlock growth and drive its diversification strategy.

Sustainable development

As a leading media company, we continuously strive to enrich the lives of our customers through our innovative print, digital and ecommerce products and services and to provide an acceptable return to our investors. However, we clearly understand our role as a responsible corporate citizen and the importance of making a broader contribution beyond what is delivered through our core operations every day. We regularly review our progress in building a balanced, sustainable organisation and identifying areas for improvement.

Managing sustainability

The Media24 board determines the business strategy and is ultimately responsible for overseeing the group’s performance. Our management team provides leadership and implements agreed-upon strategies, as guided by our code of business ethics and conduct.

Our sustainable development framework is built upon our core competencies and values of courage, integrity, accountability and respect and a clear understanding of the key issues and concerns affecting our material stakeholders. These tie in with our risk management processes, which integrate financial and non-financial risk identification, management and monitoring.

The board is also responsible for the integrity of integrated reporting. The audit committee oversees sustainability issues and assists the board in its review by ensuring the information in the integrated annual report is accurate and reliable when compared to the financial results. In line with our previous integrated annual reports, Media24 will continue to record the group’s social, environmental and economic impact on the communities in which we operate.

Significant divestitures and acquisitions

The following transactions were concluded during the year:

  • Effective 1 June 2014, Novus Holdings purchased the business of Correll Tissue, enabling us to convert waste paper generated by printing operations into tissue paper.
  • On 31 March 2015 Novus Holdings listed on the JSE. Media24 retained an effective shareholding of 66,5% in Novus Holdings.

Our people

We continuously aim to attract, develop and retain the best talent to maintain our competitive advantage. Our business success is underpinned by the passion, hard work, innovative thinking and excellence of our people – our single most important asset. Working in the exciting world of media requires the ability and willingness to adapt.

I truly believe that our staff doesn’t just go with the flow – our first-mover approach to investing in digital is now bearing fruit, we have always, and will continue to set the news agenda in the country, and we are forever willing to experiment and venture into new frontiers, such as ecommerce, that are aligned to our core expertise.

Investing for growth

Several initiatives are under way to save further costs and unlock efficiencies in our traditional businesses. The growth businesses in digital media, ecommerce and job classifieds that we are building show great promise, but require sizeable investments to keep growing. Of course, being “mobile-first” is a prime focus across all our business areas.

As a management team, we believe we are doing the right things to build a sustainable business. Our aim is to grow our business to deliver long-term value to our shareholders and to make positive contributions to the communities in which we operate.

We will also continue to work tirelessly to protect the very heart of Media24: our print and digital media assets. Now, perhaps even more so than over the past 100 years, South Africa deserves a strong, vibrant and an independent media.

Esmaré Weideman
Chief executive

19 June 2015