MultiChoice Group: Unprecedented headwinds countered with focused management interventions

The past two financial years have been a period of significant financial disruption for economies, corporates and consumers across sub-Saharan Africa due to challenging macro-economic factors. Combined with the impact of structural industry changes in video entertainment such as the rise of piracy, streaming services and social media, this has materially affected the overall performance of the MultiChoice Group.

The group’s FY25 performance was mixed, as the effects of a severely stretched consumer environment, combined with foreign currency and other macro headwinds, were countered by accelerated cost savings and cash management initiatives:

• Linear subscribers were down 1.2m or 8% YoY to 14.5m active subscribers, with the loss evenly split between South African (0.6m) and Rest of Africa (0.6m). Although reflecting an improvement on FY24 trends, this indicates ongoing broad-based pressure across the group’s entire customer base.
• Active paying Showmax subscribers were up 44% YoY, reflecting healthy growth and gaining regional market share.
• Group revenue declined by ZAR5.2bn or 9% YoY to ZAR50.8bn, mainly due to an 11% decline in subscription revenues (-1% organic) caused by foreign currency and subscriber volume headwinds and the deconsolidation of the NMSIS insurance business from December 2024. This was partially offset by inflationary pricing and new product growth (DStv Internet, DStv Stream and Extra Stream).
• Trading profit, which declined by ZAR3.8bn or 49% YoY to ZAR4.0bn, was materially affected by the ZAR2.3bn organic increase in trading losses in Showmax and the ZAR5.2bn in foreign currency revenue losses, partially offset by a significant outperformance in delivering total cost savings of ZAR3.7bn.
• Adjusted core headline earnings, the board’s revised measure of the underlying performance of the business, shifted to a loss of ZAR0.8bn (FY24: earnings of ZAR1.3bn) due to lower trading profit and hedging losses reported in FY25 (compared to gains in FY24), partially offset by smaller losses on cash remittances from Nigeria.
• The group incurred a free cash outflow of ZAR0.5bn in FY25 (FY24: inflow of ZAR0.6bn), impacted by lower profitability, higher lease repayments due to timing and partially offset by improved working capital management as well as a 29% YoY decline in capex.
• The group’s share of equity-accounted losses reduced by 16% YoY to ZAR0.5bn. This amount includes four months of equity accounted profits from NMSIS and
  a narrowing of KingMakers’ losses in ZAR, partially offset by an increase in losses from Moment as it expanded its operations.
• At year-end the group held ZAR5.1bn in cash and cash equivalents and retains access to ZAR3.0bn in undrawn general borrowing facilities. A part of the ZAR12.0bn term loan was repaid early by using the ZAR0.9bn upfront proceeds from the NMSIS transaction (i.e. ZAR1.2bn, net of tax).