The financial year to June 2000 was a difficult year for the group.Under-performance in some of the group ’s divisions together with higher than expected development losses from Metropolis*and Ster Century Europe resulted in a drop in headline earnings to 49 cents per combined unit (1999:82 cents).

While some of the difficulties encountered were a result of a weak trading environment in the industries concerned,others resulted from operational and strategic weaknesses.I am pleased to report that these have been fully addressed by management and a more focused strategy and efficient operating plan approved by the Board.This is expected to result in a sound base for consistent earnings growth in the years ahead.

PERFORMANCE

The results for the year ended 30 June 2000 were slightly ahead of market expectations,due to strong performances from Specialist Marketing,Primecom and Home Entertainment.The continued good growth in our advertising-based businesses once again emphasised the quality and resilience of our brands.

Group revenue increased by 19%to R1,7 billion,with EBITDA increasing by 6%to R281,2 million.

Cash flow from operations remained solid at R277,2 million and our balance sheet remains strong with net borrowings of only R165,5 million at year end.

When we announced our year-end results,we informed shareholders of our decision to refocus our internet strategy on iafrica.com ’s pre- eminent business-to-consumer position in South Africa and the subsequent closure of Metropolis*business-to-business operations to reduce developmental costs.

We also announced a number of proposed actions specifically designed to unlock shareholder value,and I cover these in more detail in The Future section of this commentary.

Over the last year,Primedia ’s senior management team agreed on the group ’s new mission statement.A facelift to our previous mission statement was deemed necessary by all,having regard to both the internal and external factors impacting on our group today and into the future.

This new statement of Primedia ’s vision and mission is set out on page 1 of this report and its achievement will result in the group having the most effective media to reach and “own ” the “eyes and ears ” of the consumer.

PRIMEDIA TODAY

Today,where does Primedia South Africa find itself when measured against the key imperatives set out in the new mission statement?My view is that throughout the group most – if not all of the imperatives are being met – although there is no doubt that there is more to do.

Critically,the group owns a portfolio of high quality media assets that are either number one or a close second in their markets.Ster-Kinekor Theatres reaches 16 million cinema goers,our radio stations reach over one million listeners,Kaizer Chiefs enjoys the support of six million football fans.There are very few places in South Africa,in-and out-of-home where Primedia does not have a major presence.

The group also has massive cross-promotional opportunities within its portfolio,which it continues to exploit and maximise.Through its Specialist Marketing division,it has established good initial exposure to the emerging consumers and is very well positioned,through iafrica.com,for the growth of the Internet which is rapidly becoming an established medium.

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