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MULTICHOICE GROUP LTD

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Our opinion on the current state of MC-GROUP(MCG)MultiChoice (MCG) is a leading entertainment company in Africa and one of the fastest-growing pay-TV broadcast providers in the world with 21.1 million subscribers in 50 countries. The company's 90-day subscriber base is split 42% (8.9 million) in South Africa and 58% (12.2 million) in the rest of Africa. The share was spun out of Naspers and separately listed on the JSE on 27th February 2019. This company is probably close to an ideal company for the private investor because its income is mostly annuity income, in the form of debit orders, with a very diverse client group. It has virtually no working capital because it is essentially a service company and does not need to carry large stocks. It also does not have a large unskilled or semi-skilled workforce, although it has had union problems in the past. The potential for pay-TV in Africa appears to be substantial but may be eroded by 5G internet access in the future and the existence of free online access through platforms. Icasa (Independent Communications Authority of SA), in its efforts to boost competition, is looking at changing the rules for dominance in the pay-TV market, which may impact on MultiChoice. This may include changing the rules for dominance in sports coverage which has been MultiChoice’s strongest appeal. This would impact on MultiChoice’s ability to negotiate exclusive sports contracts. Obviously, this company is in the home entertainment business which received a boost from the COVID-19 lockdowns. On 2nd March 2023, the company announced that it had entered into an agreement with Sky News and NBC Universal to enhance the Showmax service and make it dominant in Africa. In its results for the year to 31st March 2024, the company reported revenue down 5% and a headline loss per share of 715c compared with a loss of 301c in the previous year. Core headline earnings per share (HEPS) was down 38%. The company said, "The group's 9% decline in active subscribers was mainly due to a 13% decline in the Rest of Africa business as mass-market customers in countries like Nigeria had to prioritize basic necessities over entertainment, while the South African business showed more resilience with a 5% decline." In our view, this is a solid blue-chip share which faces some problems with the alternative products available to its subscribers. On 5th February 2024, MCG reported that Canal+ had increased its stake in MCG to 35.01% triggering a mandatory offer at R105 per share to the remaining shareholders. The company rejected the offer as too low. On 28th February 2024, the company announced that the Takeover Regulation Panel (TRP) had ruled that since Canal+'s ownership of MCG had exceeded 35%, it was required to make a mandatory offer to buy out the remaining shareholders in terms of section 123 of the Companies Act (71 of 2008). On 6th March 2024, the company announced that Canal+ had increased its offer to R125 per share. On 7th April 2024, the company announced that it had reached a cooperation agreement with Canal+ in terms of which it would work with Canal+ to implement the takeover. On 24th April 2024, the company announced that Canal+ had acquired 41.6% of its issued shares and it had filed the required notices with the Takeover Regulation Panel (TRP) and the Companies and Intellectual Property Commission (CIPC). On 16th May 2024, Business Day reported that Canal+ had increased its stake to 45.2%. On 4th June 2024, Canal+ made an offer of R125 per share for all the remaining shares in MC Group which it did not own. Technically, the share had been falling since 6th March 2023 and we recommended waiting for a break up through the 65-day exponential moving average before buying. That happened on 19th December 2023 at a price of 7440c. After that, the share rose to just over R120 on 30th April 2024. Since then, it has been drifting down and has broken down through its 65-day exponential moving average. In a joint announcement on 18th June 2024, Sanlam agreed to buy 60% of MultiChoice's insurance business. This move is expected to strengthen MultiChoice's position and offer new growth opportunities in the insurance sector.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MC-GROUP(MCG)MultiChoice (MCG) is a leading entertainment company in Africa and one of the fastest-growing pay-TV broadcast providers in the world with 21.1 million subscribers in 50 countries. The company's 90-day subscriber base is split 42% (8.9 million) in South Africa and 58% (12.2 million) in the rest of Africa. The share was spun out of Naspers and separately listed on the JSE on 27th February 2019. This company is probably close to an ideal company for the private investor because its income is mostly annuity income, in the form of debit orders, with a very diverse client group. It has virtually no working capital because it is essentially a service company and does not need to carry large stocks. It also does not have a large unskilled or semi-skilled workforce, although it has had union problems in the past. The potential for pay-TV in Africa appears to be substantial but may be eroded by 5G internet access in the future and the existence of free online access through platforms. Icasa (Independent Communications Authority of SA), in its efforts to boost competition, is looking at changing the rules for dominance in the pay-TV market, which may impact on MultiChoice. This may include changing the rules for dominance in sports coverage which has been MultiChoice’s strongest appeal. This would impact on MultiChoice’s ability to negotiate exclusive sports contracts. Obviously, this company is in the home entertainment business which received a boost from the COVID-19 lockdowns. On 2nd March 2023, the company announced that it had entered into an agreement with Sky News and NBC Universal to enhance the Showmax service and make it dominant in Africa. In its results for the year to 31st March 2024, the company reported revenue down 5% and a headline loss per share of 715c compared with a loss of 301c in the previous year. Core headline earnings per share (HEPS) was down 38%. The company said, "The group's 9% decline in active subscribers was mainly due to a 13% decline in the Rest of Africa business as mass-market customers in countries like Nigeria had to prioritise basic necessities over entertainment, while the South African business showed more resilience with a 5% decline." In our view, this is a solid blue-chip share which faces some problems with the alternative products available to its subscribers. On 5th February 2024, MCG reported that Canal+ had increased its stake in MCG to 35.01% triggering a mandatory offer at R105 per share to the remaining shareholders. The company rejected the offer as too low. On 28th February 2024, the company announced that the Takeover Regulation Panel (TRP) had ruled that since Canal+'s ownership of MCG had exceeded 35%, it was required to make a mandatory offer to buy out the remaining shareholders in terms of section 123 of the Companies Act (71 of 2008). On 6th March 2024, the company announced that Canal+ had increased its offer to R125 per share. On 7th April 2024, the company announced that it had reached a cooperation agreement with Canal+ in terms of which it would work with Canal+ to implement the takeover. On 24th April 2024, the company announced that Canal+ had acquired 41.6% of its issued shares and it had filed the required notices with the Takeover Regulation Panel (TRP) and the Companies and Intellectual Property Commission (CIPC). On 16th May 2024, Business Day reported that Canal+ had increased its stake to 45.2%. On 4th June 2024, Canal+ made an offer of R125 per share for all the remaining shares in MC Group which it did not own. Technically, the share had been falling since 6th March 2023 and we recommended waiting for a break up through the 65-day exponential moving average before buying. That happened on 19th December 2023 at a price of 7440c. After that, the share rose to just over R120 on 30th April 2024. Since then it has been drifting down and has broken down through its 65-day exponential moving average.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MC-GROUP(MCG)MultiChoice (MCG) is a leading entertainment company in Africa and one of the fastest-growing pay-TV broadcast providers in the world with 21.1 million subscribers in 50 countries. The company's 90-day subscriber base is split 42% (8.9 million) in South Africa and 58% (12.2 million) in the rest of Africa. The share was spun out of Naspers and separately listed on the JSE on 27th February 2019. This company is close to an ideal investment for private investors because its income is mostly annuity income, in the form of debit orders, with a very diverse client group. It has virtually no working capital because it is essentially a service company and does not need to carry large stocks. It also does not have a large unskilled or semi-skilled workforce, although it has had union problems in the past. The potential for pay-TV in Africa appears substantial but may be eroded by 5G internet access in the future and the existence of free online access through platforms. Icasa (Independent Communications Authority of SA), in its efforts to boost competition, is looking at changing the rules for dominance in the pay-TV market, which may impact MultiChoice. This may include changing the rules for dominance in sports coverage, which has been MultiChoice’s strongest appeal. This would impact MultiChoice’s ability to negotiate exclusive sports contracts. Obviously, this company is in the home entertainment business, which received a boost from the COVID-19 lockdowns. On 2nd March 2023, the company announced that it had entered into an agreement with Sky News and NBC Universal to enhance the Showmax service and make it dominant in Africa. In its results for the six months to 30th September 2023, the company reported revenue down 1% and headline earnings per share (HEPS) down 5%. The company said, "...the group's overall 90-day active subscriber base contracted by 2% (0.4m) to 21.7m. The Rest of Africa base, accounting for 60% of linear customers, grew by 1% to 13.0m. The South African business had to contend with the effects of ongoing high levels of load shedding as 43% of the days in the reporting period were impacted by stage 4 - 6 load shedding." In a trading statement for the year to 31st March 2024, the company estimated that it would make a headline loss of between 409c and 421c compared with a loss of 301c in the previous year. The company said, "The group expects losses and headline losses per share to increase due to the negative impact of a weak macro-economic and consumer environment, increased investment in Showmax, and the impact of the sharp depreciation in the Nigerian naira (NGN) against the US dollar." In our view, this is a solid blue-chip share which faces some problems with the alternative products available to its subscribers. On 5th February 2024, MCG reported that Canal+ had increased its stake in MCG to 35.01%, triggering a mandatory offer at R105 per share to the remaining shareholders. The company rejected the offer as too low. On 28th February 2024, the company announced that the Takeover Regulation Panel (TRP) had ruled that since Canal+'s ownership of MCG had exceeded 35%, it was required to make a mandatory offer to buy out the remaining shareholders in terms of section 123 of the Companies Act (71 of 2008). On 6th March 2024, the company announced that Canal+ had increased its offer to R125 per share. On 7th April 2024, the company announced that it had reached a cooperation agreement with Canal+ to implement the takeover. On 24th April 2024, the company announced that Canal+ had acquired 41.6% of its issued shares and had filed the required notices with the Takeover Regulation Panel (TRP) and the Companies and Intellectual Property Commission (CIPC). On 16th May 2024, Business Day reported that Canal+ had increased its stake to 45.2%. On 4th June 2024, Canal+ made an offer of R125 per share for all the remaining shares in MC Group which it did not own. Technically, the share had been falling since 6th March 2023, and we recommended waiting for a break up through the 65-day exponential moving average before buying. That happened on 19th December 2023 at a price of 7440c. Since then, the share has risen to 11235c.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MC-GROUP(MCG)MultiChoice (MCG) is a leading entertainment company in Africa and one of the fastest-growing pay-TV broadcast providers in the world with 21.1 million subscribers in 50 countries. The company's 90-day subscriber base is split 42% (8.9 million) in South Africa and 58% (12.2 million) in the rest of Africa. The share was spun out of Naspers and separately listed on the JSE on 27th February 2019. This company is likely close to an ideal investment for private investors because its income is mostly annuity income, in the form of debit orders, with a very diverse client group. It has virtually no working capital requirements because it is essentially a service company and does not need to carry large stocks. It also does not have a large unskilled or semi-skilled workforce, although it has had union problems in the past. The potential for pay-TV in Africa appears substantial but may be eroded by 5G internet access in the future and the existence of free online access through platforms. Icasa (Independent Communications Authority of SA), in its efforts to boost competition, is looking at changing the rules for dominance in the pay-TV market, which may impact MultiChoice. This may include changing the rules for dominance in sports coverage, which has been MultiChoice’s strongest appeal. This would impact MultiChoice’s ability to negotiate exclusive sports contracts. The company is in the home entertainment business, which received a boost from the COVID-19 lockdowns. On 2nd March 2023, the company announced that it had entered into an agreement with Sky News and NBC Universal to enhance the Showmax service and make it dominant in Africa. In its results for the six months to 30th September 2023, the company reported revenue down 1% and headline earnings per share (HEPS) down 5%. The company said, "...the group's overall 90-day active subscriber base contracted by 2% (0.4m) to 21.7m. The Rest of Africa base, accounting for 60% of linear customers, grew by 1% to 13.0m. The South African business had to contend with the effects of ongoing high levels of loadshedding as 43% of the days in the reporting period were impacted by stage 4 - 6 loadshedding." In our view, this is a solid blue-chip share which faces some challenges due to alternative products available to its subscribers. On 5th February 2024, MCG reported that Canal+ had increased its stake in MCG to 35.01%, triggering a mandatory offer at R105 per share to the remaining shareholders. The company rejected the offer as too low. On 28th February 2024, the company announced that the Takeover Regulation Panel (TRP) had ruled that since Canal+'s ownership of MCG had exceeded 35%, it was required to make a mandatory offer to buy out the remaining shareholders in terms of section 123 of the Companies Act (71 of 2008). On 6th March 2024, the company announced that Canal+ had increased its offer to R125 per share. On 7th April 2024, the company announced that it had reached a cooperation agreement with Canal+ to implement the takeover. On 24th April 2024, the company announced that Canal+ had acquired 41.6% of its issued shares and it had filed the required notices with the Takeover Regulation Panel (TRP) and the Companies and Intellectual Property Commission (CIPC). On 16th May 2024, Business Day reported that Canal+ had increased its stake to 45.2%. On 4th June 2024, Canal+ made an offer of R125 per share for all the remaining shares in MC Group which it did not own. Technically, the share had been falling since 6th March 2023 and we recommended waiting for a break up through the 65-day exponential moving average before buying. That happened on 19th December 2023 at a price of 7440c. Since then, the share has risen to 11235c.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MC-GROUP(MCG)MultiChoice (MCG) is one of Africa's leading entertainment companies and one of the world's fastest-growing pay-TV broadcasters, with a subscriber base of 21.1 million across 50 countries. The 90-day active subscriber base is split between 8.9 million (42%) in South Africa and 12.2 million (58%) in the rest of Africa. MultiChoice was spun out of Naspers and listed on the JSE on February 27, 2019. This company is close to an ideal investment due to its diversified client base and annuity income primarily generated via debit orders. As a service provider with minimal inventory requirements and a lean workforce, MultiChoice operates with minimal working capital needs. However, it faces competition from 5G internet access and free online streaming platforms. Icasa's (Independent Communications Authority of South Africa) regulatory changes to promote competition in the pay-TV market may affect MultiChoice's exclusive sports contracts, which have been a key differentiator. In partnership with Sky News and NBC Universal, the company aims to expand the Showmax service to strengthen its market position in Africa. The home entertainment sector received a significant boost from COVID-19 lockdowns, but the company’s results for the six months ending September 30, 2023, showed revenue down by 1% and headline earnings per share (HEPS) down by 5%. MultiChoice attributed this decline to high levels of loadshedding that impacted the South African business. On February 5, 2024, Canal+ increased its stake in MultiChoice to 35.01%, triggering a mandatory offer to buy out the remaining shareholders at R105 per share. MultiChoice rejected this offer as too low. The Takeover Regulation Panel (TRP) confirmed Canal+ was required to make an offer, which was subsequently raised to R125 per share. By April 24, 2024, Canal+ had acquired 41.6% of MultiChoice's issued shares. As of May 8, 2024, Canal+ increased its stake to 43.54%. Technically, MultiChoice shares had been declining since March 6, 2023. A recommendation was made to wait for a break above the 65-day exponential moving average before purchasing. This happened on December 19, 2023, at 7,440 cents, and since then, the share price has risen to 11,950 cents.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MC-GROUP(MCG)MultiChoice (MCG) is a premier entertainment company in Africa and one of the fastest-growing pay-TV broadcast providers globally, boasting 21.1 million subscribers across 50 countries. The share, originally spun off from Naspers, began trading independently on the JSE on February 27, 2019. Its revenue model, primarily based on recurring debit orders, makes it an attractive investment, particularly due to its diverse customer base and minimal working capital requirements, as it operates primarily as a service company without the need for large inventory stocks. While the potential for pay-TV growth in Africa is significant, it faces potential disruption from the rise of 5G internet access and free online content platforms. Regulatory changes proposed by the Independent Communications Authority of South Africa (Icasa) to foster competition, particularly in sports broadcasting—a key area of strength for MultiChoice—could affect the company's ability to secure exclusive sports contracts. The COVID-19 pandemic provided a temporary boost to the home entertainment industry, benefiting MultiChoice. On March 2, 2023, the company enhanced its Showmax service through a partnership with Sky News and NBC Universal, aiming to dominate the African market. However, financial results for the six months ending September 30, 2023, showed a slight decline in revenue by 1% and a 5% decrease in HEPS. During this period, the company’s 90-day active subscriber base slightly contracted by 2% to 21.7 million, although the Rest of Africa segment saw a 1% increase to 13.0 million subscribers. A notable development in 2024 involved Canal+, which increased its stake in MultiChoice to 35.01%, triggering a mandatory offer of R105 per share, which MultiChoice deemed too low. Subsequent offers saw Canal+'s stake increase to 42.47% by May 3, 2024. The share price, which had been declining since March 6, 2023, rebounded significantly after December 19, 2023, when it crossed the 65-day exponential moving average at 7440c, eventually climbing to 11973c. Given these dynamics, MultiChoice stands as a robust blue-chip stock, albeit facing competitive pressures and potential regulatory changes that could impact its market dominance and pricing strategies.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MC-GROUP(MCG)MultiChoice Group (MCG) is a prominent player in the African entertainment industry and stands out as one of the world's fastest-growing pay-TV broadcast providers. With a subscriber base of 21.1 million across 50 countries, the company's operations are split between South Africa, where it holds 42% of its subscribers, and the rest of Africa, accounting for the remaining 58%. Originally spun out of Naspers, MultiChoice was listed on the Johannesburg Stock Exchange (JSE) on 27th February 2019. The structure of MultiChoice’s business is particularly attractive to private investors. The company’s revenue primarily comes from annuity income generated through debit orders from a diverse clientele, which provides a stable financial inflow. Furthermore, as a service company, MultiChoice does not require significant working capital nor does it need to maintain large inventory stocks, enhancing its operational efficiency. However, MultiChoice faces potential challenges from regulatory changes and technological advancements. The Independent Communications Authority of South Africa (Icasa) is contemplating regulatory changes that could affect MultiChoice's dominance in the pay-TV market, particularly concerning its ability to secure exclusive sports broadcasting rights. Additionally, the widespread adoption of 5G and the availability of free online content could dilute the market share of traditional pay-TV services. Despite these challenges, MultiChoice has shown resilience and adaptability. The COVID-19 pandemic, for instance, temporarily boosted demand for home entertainment, benefiting MultiChoice. Moreover, the company's strategic partnerships, such as those with Sky News and NBC Universal to enhance its Showmax service, demonstrate its commitment to staying competitive in a rapidly evolving media landscape. For the six months ending on 30th September 2023, MultiChoice reported a slight decline in revenue and headline earnings per share (HEPS), which the company attributed to a contraction in its subscriber base and operational disruptions caused by load shedding in South Africa. Despite these setbacks, the company's robust base in the Rest of Africa continues to grow. The corporate dynamics at MultiChoice have been further complicated by Canal+'s increased stake in the company, leading to a mandatory takeover bid. After initially rejecting Canal+'s offer as too low, MultiChoice eventually entered into a cooperation agreement to facilitate the takeover, reflecting the evolving corporate governance landscape within which the company operates. In conclusion, while MultiChoice faces certain challenges from regulatory pressures and market competition, its strong subscriber base, strategic initiatives, and recent corporate developments suggest it remains a valuable investment. However, investors should remain cautious and consider the potential impacts of regulatory changes and market competition on the company’s future performance.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MC-GROUP(MCG)MultiChoice Group (MCG) is a major player in the African entertainment landscape and ranks among the world’s fastest-growing pay-TV providers, boasting 21.1 million subscribers across 50 countries. The subscriber demographics split with 42% (8.9 million) located in South Africa and the remaining 58% (12.2 million) spread across the rest of Africa. Since its spin-off from Naspers and subsequent listing on the Johannesburg Stock Exchange on 27th February 2019, MultiChoice has positioned itself as an attractive investment, particularly due to its reliable annuity income derived from debit orders across a diverse customer base. The company operates with minimal working capital, typical of service companies, which negates the need for large stock inventories. Despite its streamlined operations, MultiChoice has faced union challenges historically, although it does not employ a large unskilled or semi-skilled workforce. The potential for pay-TV growth in Africa is significant, though future challenges may arise from advancements in 5G internet technology and the availability of free online content, which could erode traditional pay-TV’s market share. Additionally, regulatory changes by the Independent Communications Authority of South Africa (Icasa) aimed at increasing competition could impact MultiChoice’s dominance, particularly in sports coverage, which is a major draw for the service. The COVID-19 pandemic initially boosted the home entertainment sector, aiding MultiChoice’s business. On 2nd March 2023, the company enhanced its competitive edge by partnering with Sky News and NBC Universal to bolster its Showmax service, aiming to dominate the African market. However, the first half of the financial year up to 30th September 2023 saw a slight decline in revenue by 1% and headline earnings per share (HEPS) by 5%. The overall 90-day active subscriber base saw a contraction of 2%, although the Rest of Africa base experienced a modest growth of 1%. The South African operations were notably affected by extensive power outages, impacting nearly half of the days in the reporting period. On the corporate front, significant developments include Canal+'s increased stake in MultiChoice, which as of early 2024 triggered a series of mandatory takeover bids, initially deemed too low by MultiChoice but subsequently raised to a more acceptable R125 per share. By April 2024, Canal+ had acquired a 40.01% share, leading to necessary regulatory filings with the Takeover Regulation Panel and the Companies and Intellectual Property Commission. From a technical standpoint, MultiChoice’s share price has been on a downward trend since March 2023 but experienced a rebound after breaking through the 65-day exponential moving average on 19th December 2023 at a price of 7440c. The share price has since climbed to 11750c, illustrating a significant recovery. MultiChoice remains a solid blue-chip stock, albeit with some exposure to the volatile dynamics of competitive products and regulatory changes. This investment scenario suggests that while risks exist, the company's strategic initiatives and market adaptations could continue to provide substantial value to investors.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MCGMultiChoice Group (MCG) is a premier entertainment enterprise in Africa, standing out as one of the world's most rapidly expanding pay-TV broadcast providers. With a subscriber base reaching 21.1 million across 50 countries, MultiChoice boasts a significant footprint. The distribution of its 90-day subscriber base is notably divided, with 42% (8.9 million) in South Africa and the remaining 58% (12.2 million) across the rest of Africa. The company's journey to becoming an independent entity, following its spin-off from Naspers, was marked by its listing on the Johannesburg Stock Exchange (JSE) on 27th February 2019. MultiChoice represents an almost ideal investment for private investors, primarily due to its annuity-based income model, facilitated through debit orders among a highly diversified client base. As a service-centric company, it operates with minimal working capital requirements, negating the need for substantial inventory holdings. Additionally, the company's workforce is largely skilled, mitigating some of the labor-related challenges, despite previous union issues. The pay-TV market in Africa, where MultiChoice is a dominant player, shows significant potential. However, future growth may face headwinds from advancements in 5G internet technology and the availability of free online content platforms. Regulatory changes are also on the horizon, with the Independent Communications Authority of South Africa (Icasa) considering revisions to pay-TV market dominance rules. Such changes could particularly affect MultiChoice's stronghold on exclusive sports broadcasting rights, which has been a major draw for its service. The COVID-19 pandemic had a temporary positive impact on the home entertainment sector, benefiting companies like MultiChoice. In an effort to enhance its offerings, MultiChoice entered into agreements with Sky News and NBC Universal on 2nd March 2023 to bolster its Showmax service, aiming to cement its leadership in Africa's entertainment space. Despite these strategic moves, the company reported a slight dip in revenue by 1% and a 5% decrease in headline earnings per share (HEPS) for the six months ending 30th September 2023. The decline in the overall 90-day active subscriber base by 2% to 21.7 million was reported, alongside a growth in the Rest of Africa subscriber base. The South African segment of the business was particularly challenged by extensive power outages during the reporting period. Recently, the French media conglomerate Canal+ increased its stake in MultiChoice to 35.01%, triggering a mandatory takeover offer at R105 per share, which was deemed insufficient by MultiChoice. Following a ruling by the Takeover Regulation Panel (TRP) on 28th February 2024, Canal+ revised its offer to R125 per share on 6th March 2024. Subsequently, on 7th April 2024, a cooperation agreement was announced between MultiChoice and Canal+, outlining a collaborative approach to the takeover process. From a technical analysis perspective, MultiChoice's shares experienced a decline leading up to 6th March 2023. However, a notable turnaround occurred on 19th December 2023 when the share price crossed the 65-day exponential moving average at 7440c, leading to a significant increase to 11793c. This suggests a potential bullish outlook for investors, considering the recent developments and strategic partnerships, although the company continues to navigate challenges within the highly competitive and rapidly evolving pay-TV market.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MCGMultiChoice Group (MCG), a prominent entertainment company in Africa, has established itself as one of the fastest-growing pay-TV broadcast providers globally, boasting 21.1 million subscribers across 50 countries. With its subscriber base divided between South Africa (42% or 8.9 million) and the rest of Africa (58% or 12.2 million), MultiChoice's business model is uniquely positioned to capitalize on the continent's growing demand for entertainment services. The company's separation from Naspers and its subsequent listing on the Johannesburg Stock Exchange (JSE) on 27th February 2019 marked a significant milestone in its journey towards independent operations. MultiChoice's appeal to private investors is enhanced by its primarily annuity-based income, derived from a diverse and extensive subscriber base through regular debit orders. As a service company, it benefits from minimal working capital requirements, negating the need for large inventory stocks. Furthermore, its workforce composition mitigates the challenges associated with managing a large unskilled or semi-skilled labor force, although it has faced union issues in the past. The potential for pay-TV growth in Africa is significant, yet it faces potential erosion from advancements in 5G internet access and the availability of free online content platforms. Regulatory changes, especially those proposed by the Independent Communications Authority of South Africa (Icasa) aimed at fostering competition within the pay-TV market, could impact MultiChoice's dominance, particularly in sports coverage—a key aspect of its appeal. The COVID-19 pandemic underscored the resilience of the home entertainment industry, with lockdowns driving increased demand for such services. MultiChoice's strategic partnerships, including agreements with Sky News and NBC Universal to enhance its Showmax service, reflect its ambition to dominate the African market. However, the company has faced challenges, as evidenced by its latest financial results for the six months ending 30th September 2023, which showed a slight decrease in revenue and headline earnings per share (HEPS), alongside a contraction in its overall subscriber base. This was partly attributed to the effects of extensive loadshedding in South Africa. Despite these hurdles, MultiChoice remains a solid blue-chip investment, even as it navigates the competitive landscape and explores alternative products for its subscribers. The recent development involving Canal+'s increased stake in MultiChoice, triggering a mandatory offer at R105 per share—which was subsequently rejected by the company as too low—highlights the ongoing corporate dynamics. The Takeover Regulation Panel's (TRP) ruling that Canal+ is obliged to make a mandatory offer to buy out the remaining shareholders further adds to the intrigue surrounding MultiChoice's future. From a technical analysis perspective, MultiChoice's share price experienced a decline starting 6th March 2023. However, a significant turning point occurred on 19th December 2023, when the share price broke through the 65-day exponential moving average at 7440c, leading to a notable increase to 10900c. This movement suggests a positive momentum shift for MultiChoice's shares, indicating potential for continued growth and making it an attractive option for investors looking for opportunities in the entertainment and media sector.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MCGMultiChoice Group (MCG) is a preeminent player in the African entertainment sector, operating as one of the world's fastest-growing pay-TV broadcast providers. With a significant subscriber base spread across 50 countries, the company enjoys a robust presence in the market. The division of its 90-day subscriber base, with a substantial portion outside South Africa, highlights its widespread appeal and market penetration. Since being spun off from Naspers and listed on the Johannesburg Stock Exchange (JSE) in February 2019, MultiChoice has been identified as an attractive investment, particularly for private investors. Its business model, characterized by annuity income primarily from debit orders and a highly diversified client base, affords it a stable financial footing. The company's operational model, which minimizes the need for large inventories and relies on a skilled workforce, further underscores its efficiency and potential for sustained growth. The landscape of pay-TV in Africa, while promising, faces challenges from emerging technologies such as 5G internet access and the proliferation of free online content platforms. Regulatory considerations, such as those proposed by the Independent Communications Authority of South Africa (Icasa) to enhance market competition and potentially alter dominance rules in sports broadcasting, could impact MultiChoice's stronghold, particularly concerning exclusive sports content. The COVID-19 pandemic, with resultant lockdowns, temporarily boosted the home entertainment industry, benefiting companies like MultiChoice. Strategic partnerships and agreements, such as those with Sky News and NBC Universal to bolster its Showmax service, demonstrate MultiChoice's commitment to maintaining and expanding its market dominance in Africa. For the six-month period ending on 30th September 2023, MultiChoice reported a slight decline in revenue and headline earnings per share (HEPS), with a noted contraction in its overall subscriber base, partly due to the adverse effects of extensive load shedding in South Africa. Despite these challenges, the company's Rest of Africa operations exhibited growth, affirming its expansive market reach. The recent increase in Canal+'s stake in MultiChoice to over 35%, triggering a mandatory offer at R105 per share, represents a significant development. MultiChoice's rejection of the offer as undervalued and the subsequent ruling by the Takeover Regulation Panel (TRP) requiring a mandatory offer for the remaining shares highlight the ongoing corporate dynamics and the perceived value of MultiChoice. From a technical analysis standpoint, MultiChoice's share performance has shown resilience amidst market fluctuations, with a notable recovery following a break through the 65-day exponential moving average in December 2023. This recovery, along with the company's solid fundamentals and strategic initiatives to enhance its service offerings, positions MultiChoice as a compelling investment option, albeit with considerations for the evolving competitive landscape and regulatory environment.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MCGMultiChoice (MCG) stands as a prominent entertainment company in Africa, recognized as one of the fastest-growing pay-TV broadcast providers globally, boasting 21.1 million subscribers across 50 countries. The subscriber base is divided into 42% (8.9 million) in South Africa and 58% (12.2 million) in the rest of Africa. Originally part of Naspers, MultiChoice was spun out and separately listed on the JSE on February 27, 2019. It presents an attractive prospect for private investors due to its primarily annuity income structure derived from debit orders and a diverse clientele. With its service-oriented nature, MultiChoice requires minimal working capital and does not rely on maintaining significant stock levels. Moreover, it maintains a relatively small unskilled or semi-skilled workforce, despite past union issues. While the potential for pay-TV in Africa appears substantial, it may face challenges from emerging technologies like 5G internet access and the availability of free online content platforms. Regulatory changes by Icasa (Independent Communications Authority of SA) aimed at increasing competition may impact MultiChoice, particularly in the area of sports coverage, which has been a significant draw for the company. Potential alterations to rules governing dominance in sports content could affect MultiChoice's ability to secure exclusive sports contracts. MultiChoice operates in the home entertainment sector, which received a boost during the COVID-19 lockdowns. On March 2, 2023, the company announced an agreement with Sky News and NBC Universal to enhance its Showmax service and strengthen its presence in Africa. In its financial results for the six months ending on September 30, 2023, MultiChoice reported a 1% decrease in revenue and a 5% decline in headline earnings per share (HEPS). Load shedding in South Africa significantly impacted the business, with 43% of the reporting period affected by stage 4 to 6 load shedding. MultiChoice remains a solid blue-chip share but faces competition from alternative entertainment products available to its subscribers. On February 5, 2024, MultiChoice reported that Canal+ had increased its stake in MCG to 35.01%, triggering a mandatory offer at R105 per share to the remaining shareholders. However, the company rejected the offer as too low. From a technical perspective, the share was in a declining trend since March 6, 2023, and we recommended waiting for a breakout above the 65-day exponential moving average before considering buying. This breakout occurred on December 19, 2023, at a price of 7440 cents, and since then, the share has risen to 9130 cents.
JSE:MCG
by PDSnetSA
Multi-Choice after its breakway gap could fly from here to R135Couple of things with Multi-choice. It moved on low liquidity to the downside before making a break-away gap and back into the uptrend. Now with gaps they close over 70% of the time and so, we're getting that retest back to close the gap, retest the uptrend and possibly heading up from there. We got the Cup and Handle, which broke up and make a fakeout. But I believe this is temporary, as there are a couple of retests to take place including 200MA. First target could head to R135.75 Fundamentals The rally in MultiChoice Group Limited (JSE:MCG) in 2024 has been influenced by several factors, including a significant acquisition move by CANAL + SA, which expressed a non-binding intention to acquire a 68.24% stake in MultiChoice Group for ZAR 30.4 billion.
JSE:MCGLong
by Timonrosso
Our opinion on the current state of MCGMultiChoice (MCG) is a leading entertainment company in Africa and one of the fastest-growing pay-TV broadcast providers in the world with 21,1m subscribers in 50 countries. The company's 90-day subscriber base is split 42% (8,9m) in South Africa and 58% (12,2m) in the rest of Africa. The share was spun out of Naspers and separately listed on the JSE on 27th February 2019. This company is probably close to an ideal company for the private investor because its income is mostly annuity income, in the form of debit orders, with a very diverse client group. It has virtually no working capital because it is essentially a service company and does not need to carry large stocks. It also does not have a large unskilled or semi-skilled workforce, although it has had union problems in the past. The potential for pay-TV in Africa appears to be substantial but may be eroded by 5G internet access in the future and the existence of free online access through platforms. Icasa (Independent Communications Authority of SA), in its efforts to boost competition, is looking at changing the rules for dominance in the pay-TV market, which may impact on MultiChoice. This may include changing the rules for dominance in sports coverage which has been MultiChoice’s strongest appeal. This would impact on MultiChoice’s ability to negotiate exclusive sports contracts. Obviously, this company is in the home entertainment business which received a boost from the COVID19 lockdowns. On 2nd March 2023 the company announced that it had entered into an agreement with Sky News and NBC Universal to enhance the Showmax service and make it dominant in Africa. In its results for the six months to 30th September 2023 the company reported revenue down 1% and headline earnings per share (HEPS) down 5%. The company said, "...the group's overall 90-day active subscriber base contracted by 2% (0.4m) to 21.7m. The Rest of Africa base, accounting for 60% of linear customers, grew by 1% to 13.0m. The South African business had to contend with the effects of ongoing high levels of loadshedding as 43% of the days in the reporting period were impacted by stage 4 - 6 loadshedding." In our view, this is a solid blue-chip share which faces some problems with the alternative products available to its subscribers. On 4th July 2023 Business Day reported that Canal+ had increased its stake in MCG to 31,7% which might indicate a takeover. MCG shares fell on the news. Technically, the share has been falling since 6th March 2023. We recommended waiting for a break up through the 65-day exponential moving average before buying. That happened on 19th December 2023 at a price of 7440c. Since then the share has risen by 16,5%.
JSE:MCG
by PDSnetSA
Our opinion on the current state of MCGMultiChoice (MCG) is a leading entertainment company in Africa and one of the fastest-growing pay-TV broadcast providers in the world with 21,1m subscribers in 50 countries. The company's 90-day subscriber base is split 42% (8,9m) in South Africa and 58% (12,2m) in the rest of Africa. The share was spun out of Naspers and separately listed on the JSE on 27th February 2019. This company is probably close to an ideal company for the private investor because its income is mostly annuity income, in the form of debit orders, with a very diverse client group. It has virtually no working capital because it is essentially a service company and does not need to carry large stocks. It also does not have a large unskilled or semi-skilled workforce, although it has had union problems in the past. The potential for pay-TV in Africa appears to be substantial but may be eroded by 5G internet access in the future and the existence of free online access through platforms. Icasa (Independent Communications Authority of SA), in its efforts to boost competition, is looking at changing the rules for dominance in the pay-TV market, which may impact on MultiChoice. This may include changing the rules for dominance in sports coverage which has been MultiChoice’s strongest appeal. This would impact on MultiChoice’s ability to negotiate exclusive sports contracts. Obviously, this company is in the home entertainment business which received a boost from the COVID19 lockdowns. On 2nd March 2023 the company announced that it had entered into an agreement with Sky News and NBC Universal to enhance the Showmax service and make it dominant in Africa. In its results for the six months to 30th September 2023 the company reported revenue down 1% and headline earnings per share (HEPS) down 5%. The company said, "...the group's overall 90-day active subscriber base contracted by 2% (0.4m) to 21.7m. The Rest of Africa base, accounting for 60% of linear customers, grew by 1% to 13.0m. The South African business had to contend with the effects of ongoing high levels of loadshedding as 43% of the days in the reporting period were impacted by stage 4 - 6 loadshedding". In our view, this is a solid blue-chip share which faces some problems with the alternative products available to its subscribers. On 4th July 2023 Business Day reported that Canal+ had increased its stake in MCG to 31,7% which might indicate a takeover. MCG shares fell on the news. Technically, the share has been falling since 6th March 2023. We recommend waiting for a break up through the 65-day exponential moving average before investigating further.
JSE:MCG
by PDSnetSA
MCG Still Seeking Weekly & Yearly LowMCG showing the battle being waged at the median line of a thin Pitchfork, still lean heavily on the idea that 5 July is potentially a Weekly/Yearly low point as we saw buyers step in around this level. The line that confirms a weekly low is the blue resistance & a close above the 10 week moving average. Should the share go lower than 5 July we would know that this cycle extends beyond day 35. The bulls can wait for a painless entry on confirmations, while longterm investors should not have a problem accumulating at current levels. The middle of the road approach would be deploying 30% of what is expected then another 30% on confirmation of a swing low should we go lower with the balance on meeting the parameters for confirming a weekly low.
JSE:MCGLong
by runyamhere
Multichoice - Retrace zonePrice has rebounded sharply off a low of R77.50 We now at the retrace zone of the major leg down. Bulls will need to push through R88.50 to keep the momentum going . R90 will also be an important level to watch intraday to see how the tape prints around there. NB High volume in last 30min of trading The 61.8% retracement level is a key Fibonacci retracement level that is used in technical analysis. It is derived from the Fibonacci sequence and is also known as the “golden ratio” or “golden mean”. The 61.8% retracement level is calculated by taking the difference between the high and low of a price movement and multiplying it by 0.618. This level is considered significant because it often acts as a support or resistance level for price movements
JSE:MCG
by Trader-Dan
$JSEMCG - Multichoice Group: A Total ResetThe last analysis on Multichoice was on 13.04.2023, link below. The stock has traded as forecasted and has surpassed the stretch target of 8447. Yesterday's sell-off seems to have been triggered by news that MCG was downgraded by J.P. Morgan as they believe MCG intends to ‘throw considerably more money at Showmax than what the market expects’. The fundamentals of MCG are dire to say the least. The stock is now hovering around its all time low of 7228. A break below this level would trigger a total reset of the wave count. It's a bit late to favour more shorts at this level so I will watch MCG from the sidelines.
JSE:MCG
by Loyiso_BlaqueSoros_Mpeta