By Helen Phushela
In the past year Kagiso Media has managed to purchase chunks of broadcasting and marketing company shares. This was a direct cause of their entire subsidiary. The media giant has since purchased 100% voting rights in Shinake Investments, which has direct shareholding of 24.9% at Kaya FM, the fastest growing radio station in Gauteng. The transaction was effective from the 3 June 2011 and the company’s interest in Kaya FM increased from 22.59% to 47.49%.
The growth in radio advertising enabled their broadcasting division to successfully deliver revenue of R575.2 million – this is an 18.3% increase in comparison to the previous year. According to reports by the Radio Advertising Bureau (RAB), the sector has grown 14.1% highlighting great performance from Kagiso Media’s radio stations.
In 2012 Kagiso Media managed to acquire a number of shares in marketing as well as rugby companies. This included acquisition of 90% of Kaufman Levin Associates (KML), a leading marketing research company, for R25 million. Included is also an offer to acquire EXP group of companies, which included Trinergy brand connections and 100% of the shares in Blue Bulls Rugby holdings (which owns 50% of the Blue Bulls Rugby Club); this was a R335 million contract with a R10 million loan, as detailed in the SENS report published 5 September 2012. This transaction has strengthened the marketing services of KML. Meanwhile, EXP has operations in 11 African countries, making communication and information distribution a breeze. Shareholders are often advised to tread carefully while trading in company shares.
The changes brought by Kagiso Media have brought a new dawn for growth for all radio stations in its stable. After an increased economic interest of 47.4%, Kaya FM’s revenue increased to 24%. It is currently the fastest growing radio station in South Africa with a weekly listenership of 1.4 million. The station scooped two awards at the MTN radio awards. Thabo Mokwele aka T’Bose won Best Music Presenter and John Perlman won the Best News and Actuality award.
While East Coast Radio’s pressurised revenue saw the station suffer a shortfall in the first half, the second half performance passed expectation of recovering costs and backlog.
The following highlights attest to the Durban-based station’s growth:
- Overall listenership grew by 13% to over 1,9 million underpinned by a 14% growth within the target market category.
- Market share remains dominant in the lucrative LSM 7-10 with targeted age group of 25-49 at 40%.
- The station completely revamped its line-up to ensure its long term relevance. Also publishing a cook book called East Coast Tables which is an innovative concept for radio. It sold over 5500 copies.
- In effort to pull from below the line revenue, the station in association with Gordon Institute of Business Science (GIBS) launched the executive business breakfast, which has been declared an annual event.
- The station also launched Fundzani a long term campaign to re-connect with Kwazulu Natal’s people and the East Coast way of life as well as tapping into urban pride through key events, activations and stunts. The goal was to entrench East Coast FM’s position within its target market.
Another station under the Kagiso Media umbrella is Jacaranda FM which has doubled its numbers in Johannesburg as a result of increased marketing investments. Despite their slight drop in profit line as compared to the prevision year, the station remained within expected profit line. Reaching first place in Afrikaans listenership in Gauteng market, with 28.3% increase in share and 9% increase in audience as compared to the previous year; Jacaranda has gained an outstanding 2.2 million listeners. The station achieved 21% growth in Gauteng, 29% in Limpopo, 24% in North-West and 18% growth in Mpumalanga. The station has plans underway to launch a new station at the Emnotweni Casino in Nelspruit; it is strengthening plans to penetrate Mpumalanga. Like most of the stations under Kagiso Media, Jacaranda also clenched a MTN Radio Station Award for best breakfast show in 2011.
More stations in the media giant’s backyard have produced good figures. OFM delivered on expectations with 9.4% revenue growth with stable listenership.
Heart FM is a commercial radio station attracting 59500 listeners weekly. Play listing predominantly contemporary music, Heart FM has Cape-town Metropolitan residents and surrounding areas bobbing to their tunes. The station’s target market stabilised during the year after they repositioned in the previous year.
The Kagiso Media Group reduced its economic stake and shareholding in the station from 33.3% to 20%. It has also reduced its interest in Gagasi FM with the same percentages as Heart FM. Gagasi FM showed a 12.8% revenue growth for the year with a small increase in audience to 1.87million listeners.
(The figures in the article were sourced from RAMS August 2011/3 – www.saarf.co.za)
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