Naspers shifts focus from acquisitions


Africa’s biggest media firm, Naspers said that while it was always looking for good- value acquisitions, it would focus more this year on growing its businesses organically and developing new technologies.

Naspers’s two biggest earners for its financial year to March were once again its pay-TV and internet businesses. The media company has gained a reputation for growth through acquisition, spending R5,5bn in the past financial year.

Naspers financial director Steve Pacak, however, said the company would concentrate on finding companies that were a "good fit" at "a good price".

"Part of Naspers’s growth strategy is that it makes acquisitions, and this will not change, but in the current market some valuations for internet are a bit rich," Pacak said.  "Of course, we are on the lookout for companies that fit our strategy and are fairly valued."

Naspers CEO Koos Bekker said in a statement that the company would also be investing in its pay-TV division. Pacak said the cost of development would be felt in next year’s financial results.

Naspers, which largely avoided the slump experienced by the media industry because of its diversified interests, reported a 13% profit rise for its financial year to the end of March, to R6bn, or R16,12 per share, largely on the strength of its internet and pay-TV businesses. It has issued a dividend of 270c, 15% up on the previous year.
Naspers has not escaped the downturn completely, with print operations seeing a "modest" 9% revenue rise, and restructuring and further retrenchments on the cards for its Media24 division.

The increase in pay-TV subscription is attributed by Naspers to the World Cup and the cheaper Compact bouquet. Revenue increased 19% to R21bn and it added 977,000 subscribers to its base.

Naspers’s share of income from associates, including Tencent in China, Group in Russia and Abril in Brazil, increased 60% to R3,3bn, the company said.
Abdul Davids, an analyst for Kagiso Asset Management, said the results showed that the balance sheet was healthy.

"Pay-TV continues to grow, despite increased costs and development spend. Tencent continues to make a massive contribution, but the other internet businesses have proved a mixed bag." He was confident social media in developing countries would continue to grow — good news for Tencent and Russia’s

Investors were displeased with Naspers’s profit estimate in mid- June, expecting something closer to 20%, resulting in a 3% drop in the share price on June 14.