• MultiChoice is unable to settle its debts now after posting its worst results ever.
• The group lost R4.1 billion and over 1.6 million subscribers in the year ended March 2024.
• MultiChoice is now focusing on making money in the short term, putting aside aspirations for further growth.

The African continent’s largest entertainment group MultiChoice has announced its worst-ever financial performance on the back of a R4.1 billion loss for the year ending 31st March 2024. It also saw a headline loss per share of 715 cents.

The group says it would not declare dividends because of its ongoing negotiations with Canal+, but more likely it’s due to its terrible performance in the past year. A combination of poor subscriber growth and foreign exchange headwinds led to the group’s lacklustre performance in the year.

In the same year that it relaunched a more African-focused Showmax, and received a huge cash injection from its US partner Comcast of R687 million to do just that. MultiChoice also lost over 1.6 million subscribers across the continent, with the rest of Africa segment shrinking by 13 percent.

Particularly in South Africa, MultiChoice lost nine percent of its subscriber base, shrinking to just over 7.6 million paying customers. The company is blaming a “deteriorating macro and consumer environment” for the subscriber exodus.

“Despite the typical resilience of pay-TV in a downturn, many of our would-be customers cannot afford to consistently pay for our product or choose not to subscriber when power availability is unreliable,” it said in its latest earnings report.

The desperate economic situation in Nigeria played a large part in the subscriber loss, as the group says potential subscribers had to instead prioritise basic necessities with what little money they had.

It seems that the relaunch of Showmax, which was supremely expensive for MultiChoice and saw a R2.6 billion loss, coupled with poor currency performance across its African markets compared to international currencies, as well as rising inflation crushed the group’s profitability aspirations, with free cash flow declining by nearly 80 percent.

MultiChoice is now technically insolvent as total liabilities have risen above the company’s assets, meaning they do not have enough money to settle debts. Assets (the money it has) shrunk in the year to R43.9 billion, while the money it owes went up to R45 billion. The company is now short of over R1 billion.

Despite the grim picture, MultiChoice and its executives say they are still optimistic that they can turn things around in the next year.

“In the short term the group has prioritsed cash generation over growth,” it said, which makes sense given the insolvency issue. “The group has accelerated its multi-year cost reduction programme with the target for FY25 increased to ZAR2bn. These targets have been embedded in the group’s budgets and within the personal objectives of key executives to drive delivery,” it added.

“The group will also continue its efforts to drive growth in focused areas, notably Showmax, Moment, SuperSportBet, DStv Insurance, DStv Internet and DStv Stream, while working hard to retain its DStv and GOtv customers and support their activity rates through FY25.”