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Cannes Lions Special Section

Johncom's strategy

The board of Johnnic Communications has confirmed its strategy to weld the media, digital and entertainment operations of the Group into a tightly integrated operation focused on growth in SA and Africa. Johnnic Publishing head Connie Molusi (40) has been appointed CEO of Johnnic Communications to drive this process.

The Board has confirmed it has no plans to break up the Group, despite recent media speculation. This is supported by Johnnic Holdings, which owns 62.5% of Johncom.

Molusi, who joined Johnnic Communications in November 2000 to run the Publishing operations, will remain in charge of Publishing for the moment, in addition to taking on the Group role. Further management restructuring would follow soon.

Johncom chairman Mashudu Ramano said the Group's integration strategy had two goals: "To drive increased sales across the group products through enhanced cooperation between the business units; and to cut costs by centralizing support and administrative functions."

First step in the integration process will be the move of Johnnic Entertainment from its current separate premises in Johannesburg into the Johnnic Publishing Building in Biermann Avenue, Rosebank, Johannesburg. This building also houses the small Johncom head office, and will become Johnnic Communications House.

This move, to be completed by May 2003, will result in savings to the group of several million rand a year, and will unlock new synergies between the business units, said Ramano.

Johnnic's Digital operations will remain in Sturdee Avenue in Rosebank, as the Biermann Avenue building will now be fully occupied. But work has already started which will result in a sharing of Group services to cut costs.

"From a product perspective, the Group will be focusing on innovation to grow local market share.

"Johncom is a focused knowledge management company in Entertainment and Media; both business and consumer. We manage content - from production of news and financial data to licensing and distribution of film and music; and we manage multimedia channels to market, ranging from print to online to television and video, right through to retail outlets."

The process of re-aligning the Group's many businesses had been ongoing for some time and Johncom would soon be ideally positioned to derive the maximum benefit from its combined and rationalised platforms comprising finance, human resources, IT, production and distribution.

The Group controlled some very powerful South African brands, including the Sunday Times to Gallo Music, Nu Metro, Exclusive Books and I-Net Bridge. The goal was to now leverage these brands to drive group sales.

"Two principles underpin our strategy; to improve profitability and continue to drive transformation," said Ramano.

Johnnic Holdings confirmed that plans to sell its Johncom stake were off the table and that they were a long-term shareholder in Johncom.

In demonstration of this commitment Christine Ramon of Johnnic Holdings has been appointed as a non-executive director to the Board of Johncom.

Johncom, which will report full-year results in June 2003, showed good growth at the half-year to September 2002. Group revenue for the six months grew 21% to R1.5-billion, with Ebitda improving 68% and headline earnings by 29%.

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