Our opinion on the current state of AME

African Media Entertainment (AME) is a company which specialises in running radio stations and whose revenue comes principally from advertising on those stations. It has four divisions - (1) Algoa which broadcasts from the Garden Route to the Wild Coast, (2) OFM which broadcasts in the Free State, North-West province, Northern Cape, Southern Gauteng and Northern Natal, (3) United Stations which sells and creates advertising material for the radio stations and (4) Radio Heads which offers media planning and buying, creative strategy and copy-writing and syndicated programming. AME recently acquired Moneyweb and a share of Classic FM. The company said, "On 30 September 2019 Classic FM South Africa (Pty) Ltd was placed under voluntary business rescue." The share is extremely thinly-traded which makes it impractical for private investors. In its results for the year to 31st March 2023 the company reported revenue up 7% and headline earnings per share (HEPS) up 30%. The company said, "The group generated cash from operating activities of R49,6 million (March 2022: R47,1 million), paid tax of R11,6 million (2022: R10 million), spent R6,3 million (2022: R3,6 million) on capital expenditure and paid dividends to its equity holders and non-controlling interest holders of R28,7 million (2022: R20 million). The group also repurchased 701 775 shares (2022: 79 174 shares) during the period which resulted in a cash outflow of R22,6 million (2022: R2,4 million)". In a trading statement for the six months to 30th September 2023 the company estimated that HEPS would increase by between 30,8% and 44,2%. The share trades an average of R80 000 per day on average which makes practical for a small investment. Its portfolio of radio stations have relatively small, specialised audiences. Moneyweb has battled for years to produce significant profits.