MEDIA and entertainment company Avusa's containment strategy, which included retrenchments, improved results significantly, acting CEO Mike Robertson said at its annual results presentation yesterday.
Mr Robertson announced that the group had experienced a much stronger second-half performance and as a result diluted headline earnings per share improved from a 90% decline at the interim period to a 36% year-on-year decline for the full year.
Avusa, which is the subject of a cash-and-share takeover offer by its biggest shareholder, Mvelaphanda Group, said it had reduced its head count by 6%, or 380 staff, across the group.
This had led to a cost reduction of R67m.
"The worst of the retrenchment process is over now," Mr Robertson told Business Day, which is half owned by Avusa. "I don't foresee much more over the coming financial period."
Group revenue increased 12%, from R5,3bn to R6bn, mainly as a result of the full-year inclusion of the Retail Solutions business unit, which includes Hirt & Carter and Uniprint, acquired in 2010.
"Both businesses delivered a strong performance for the year while facing tough trading conditions," said Mr Robertson.
The Retail Solutions unit contributed R1,3bn to revenue and R163m to profit.
"The improved performance is mainly as a result of our intervention strategy and cost savings drive gaining traction."
Mr Robertson said the focus would now fall on the entertainment business unit, which includes home entertainment, cinemas and music. The unit reported a R30m loss for the year.
"Our entertainment business had a very poor year. The second half of the year and this coming year is a year of transformation for that business. We will move away from being the intermediaries and become a consumer-facing entity," said Mr Robertson.
He said the roll-out of digital terrestrial television and partnerships with technology companies would allow it to offer its content directly to customers.
He said Avusa would increasingly move away from free content online as it seeks to maximise revenue from its digital operations. This would culminate in online pay-walls for both Business Day, which is rolling out a comprehensive financial information service this year, and the Sunday Times.
Mr Robertson was also buoyed by a PricewaterhouseCoopers' media outlook for SA, which indicated that traditional media would continue to dominate advertising spend up to 2017.