Caxton's earnings up 11.7% to 122.6c

Earnings per share rose 10.9% from 104.8 cents per share to 116.2 cents per share‚ which the company said it had done well to achieve bearing in mind the difficult economic conditions and a fundamental shift to digital products.

Turnover grew from R4.819bn to R5.157bn‚ an improvement of 7%. Total increases in operating expenses were contained to 6.2% despite large increases in power and fuel costs and the negative consequences of the fall in the South African currency bearing in mind that the majority of the company's raw material‚ equipment and spares are imported.

Profit from operating activities was up by 12.2% and depreciation increased from R226.5m to R241.6m. Impairment of plant and goodwill amounted to R37m.

Net profit from operating activities rose to R558.9m - an improvement of 12.9%. Net finance income decreased slightly to R104.6m from R111.7m‚ predominantly as a result of the additional investments.

Difficult trading conditions

"Print media throughout the world has to contend not only with difficult economic conditions but the migration of printed products to digital products, which is gathering momentum at pace. Advertising spend on printed products continues to fall and digital devices such as tablets and telephones are far cheaper than they were‚ allowing a greater percentage of the population to become users. This in turn will undoubtedly create further demand for the conversion of published products to digital‚" Caxton said.

It added that the company remained in a very strong financial position with cash and cash equivalents at the year-end amounting to R1.418bn notwithstanding an active year in terms of the acquisition of a number of investments and capital expenditure amounting to R356m.

Income from associates reduced from R26m to R22.4m. This resulted in profit before tax increasing from R632.8m to R685.8m - up by 8.4%.

Profit for the year was R502.8m, an increase of 13.7% on the previous year's profit of R442.1m.

During the year new printing presses‚ and ancillary equipment‚ were installed in the Johannesburg newspaper factory and at SA Litho in Cape Town. A gravure printing press and associated pre- and post-press equipment is currently being installed for CTP Gravure in Durban and will be in production towards the end of the year.

Several substantial investments were made during the year. Additional shares were acquired in Element One Limited and the shareholding in that company is now 18.7%. The investment held in Times Media Group increased to a 11.6%.

In line with the digital strategy which has been adopted and is in the process of implementation‚ investments were made in FoneWorx Holdings‚ 32.7% of whose equity was purchased‚ and a 25% investment in RSA Web was also made.