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Manufacturing Indaba 2018

Times Media spending on digital and radio

Times Media sells Nu Metro business; proceeds to boost digital, broadcasting units.
Times Media Group, owner of Business Day and the Financial Mail, is likely to use the R75m proceeds from the sale of its cinema business to prop up its growing digital and broadcasting unit. The media company, which was among the strongest performers on the local bourse last year, is building up its broadcast platform and has been on the prowl for radio stations locally and in the rest of the continent.

"We want to keep a bit of a war chest to develop the business," says Times Media Group CEO Andrew Bonamour.

"We will be investing in our broadcasting division, perhaps some further acquisitions here, as well as Times Media Mobile, which we launched recently with a well-known telecom entrepreneur."

Times Media Mobile will look to supply content to a telecom partner.

Towards the end of last year, the company announced the purchase of a 65% stake in MPower FM, a commercial radio broadcaster based in Nelspruit, Mpumalanga. The transaction followed a sojourn into West Africa, where the company bought a 32,26% interest in Ghana radio and television group Multimedia, for R144m.

The proceeds from the sale of the Nu Metro businesses could also be used to pay down the media company's debt, which is estimated at R300m. Times Media previously had close to R700m in debt, but received R400m from the sale of Exclusive Books and Van Schaik towards the end of last year.

The sale of the loss-making Nu Metro Cinemas should bring the disposals of non-core assets to a close.

One of the challenges with the cinema business is property leasing costs, which have to be paid regardless of the number of bums on seats.

"With the advent of new technologies, there is a lot of competition for eyeballs. There's been a decline in viewership and advertisers will shy away from the cinemas in that sense," Afena Capital research head Khulekani Dlamini told Business Day.

Last year, Times Media sold its other cinema interests to Tsogo Sun, White Horse Investments and Avalon Three Groups.

Nu Metro is the second-largest cinema operator in Southern Africa and operates 17 cinema complexes with 162 screens in SA. The Primedia-owned Ster Kinekor is the largest and has 54 complexes, with more than 400 screens.

Bonamour says the sale of Nu Metro Cinemas did not include Nu Metro Films, which has a big film archive.

"We are keeping the films business. We are using that content, our big film catalogue, on other platforms. That content remains," Bonamour says.

He adds that Nu Metro Films owns a big library of films that it supplies to other broadcasters and theatrical distributors.

Similarly, Times Media has opted to keep the music catalogue at Gallo Records. However, the company will not be signing on new artists.

On the potential sale of more assets, Bonamour says there are a few ends to tie up.

However, whatever needs to be tied up will not affect the media division, which looks after the group's newspapers, which include the Sunday Times and Sowetan
The sale of Nu Metro Cinemas comes as investment firm Blackstar, a majority shareholder of Times Media Group, upped its stake in the media company to 25,05% late last year. "We have always wanted to be a 25% shareholder. We are now happy with where our shareholding is," Bonamour says.

Blackstar has increased its holding in Times Media Group by about 13% in less than a year.

Over that time, the company's shares have gained 53%, outperforming the JSE all share index, which rallied 18%.

Africa's biggest media company, Naspers' shares more than doubled last year, while the tightly held Caxton CTP Publishers rose 4%.

Bonamour says the increase in the shareholding of Times Media Group should finally shut down any talk that Blackstar is looking to sell Times Media in a quick fire sale.
"This shows that we are committed for the long term. It shows we are going to be there for some time."

Asked how Blackstar managed to increase its stake to the 25% mark in recent weeks, Bonamour said the shares were bought on the open market.

Source: Financial Mail, via I-Net Bridge


I-Net Bridge
For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.

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