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ZARc 10951 0.24%Investor briefcase Strategy
Investor briefcase Strategy
Our ambition is to create value for our shareholders on a sustainable basis by leveraging our existing platform to create a broader ecosystem of consumer services. We plan to do this by maintaining a leadership position in our traditional video business, and by capturing the nascent African SVOD opportunity with our global streaming partner. We also aim to support investee companies, KingMakers (sports betting) and Moment (fintech), on their development paths and will consider further targeted investments or strategic partnerships over time.
In an evolving video entertainment industry, a differentiated content strategy is key to success. Our strength lies in our local content expertise, the appeal of our sports offering, our ability to source suitable international general entertainment content and our ability to aggregate and connect our viewers to a full-service video entertainment offering.
Our significant investment in local content sets us apart from international competitors, especially as African viewers love to see content in their own languages, with local actors and stories that resonate culturally. The return on our investment in local content remains favourable at scale and is further enhanced by the fact that, unlike international content, it does not carry currency risk. As we own this content, it also allows us greater control and flexibility in how we leverage this content across our packages, services and platforms.
The quality of our sports offering is well recognised. We remain committed to providing our customers with access to the best and most exciting local and global sports events, while at the same time carefully managing the cost of acquiring sports broadcasting rights to ensure suitable returns. We are the largest funder of sport on the African continent and support the sporting ecosystem from grassroots up. Our local production capability is unmatched and is globally recognised by peers and sports bodies for its professional expertise and quality.
Growing and maintaining a vibrant subscriber base remains key to our long-term success as a group, even if short-term macro-economic headwinds negatively impact our momentum.
Our South African subscriber base reflects unique characteristics across the various packaged tiers, requiring us to cater differently for our subscribers' specific requirements and circumstances. Given South Africa’s current economic and loadshedding challenges, we are particularly focused on retention in our largest market, while some growth opportunities still remains to be explored in the mass market as and when market conditions improve.
In the Rest of Africa, scaling our customer base and implementing inflationary-linked pricing remain an essential element of the segment's path to self-sustaining cash generation. This is also critically important in driving operating leverage into a largely fixed-cost base to offsetting currency headwinds. Our Rest of Africa markets remain underpenetrated and supportive of sustained growth outside of periodic short-term macroeconomic and currency-led market challenges.
To complement our existing Video Entertainment business, we are looking to develop future revenue streams by investing in opportunities that are consumer-focused, leverage our scale and local advantages, and are underpinned by scalable technology. We are well positioned to develop and support a compelling ecosystem of consumer services in sub-Saharan Africa given: our scale and distribution capabilities; our reach of over 21m households across 50 countries; our proven track record of delivering video entertainment services over nearly 40 years; our investment in enduring relationships with customers and suppliers; our ability to manage in-country regulatory, language and cultural nuances; and our unrivalled payment collection capabilities.
Our track record reflects our ability to innovate and adopt new technologies with the aim of catering for our customers' ever-evolving needs. Although there have historically been challenges around broadband connectivity in our markets, customer behaviour is increasingly moving online and we believe that we are approaching an inflection point in terms of broadband access and affordability. This will support an acceleration in the adoption of streaming services across the continent. As such, it is critical that we position our business ahead of the growth curve and potential increase in competition.
Our aim is to deliver positive operating leverage through time — keeping the organic growth in our cost base below the organic growth in revenue, thereby supporting group margins and free cash flow generation. We continuously strive for operational excellence and optimising cost efficiencies across our business. From time to time, this may require some upfront investment as we redesign certain critical systems to support our future business requirements and customer needs. We are also scaling our analytics and AI capabilities, focusing on improving customer experience, driving revenue, enhancing content discovery and reducing costs.
