by Thinus Ferreira
Three MultiChoice directors - chairman Imtiaz Patel, MultiChoice Africa director Byron du Plessis and non-executive director Jim Volkwyn - last week sold R9.6 million of their MultiChoice shares, luckily before the pay-TV company's share price tanked yesterday after it announced this week that its revenue expectations are now lower.
On 7 March MultiChoice announced that on 6 March Imtiaz Patel had sold R7.63 million of his MultiChoice shares, while Jim Volkwyn sold R725 000 in shares, and Byron du Plessis R1.28 million of MultiChoice shares - collectively R9.6 million of MultiChoice shares.
On Monday evening, in a voluntary trading update issued after the markets had closed, MultiChoice announced that its 2023 revenue expectations are now lower.
MultiChoice warned that its revenue is dragged lower because of the debilitating and increasing Eskom electricity blackout crisis, having a "significant impact" on its DStv subscriber base's activity levels.
MultiChoice also warned that contributing to the lower revenue forecast is that MultiChoice is having to spend more money in increased costs for its planned new Showmax streaming service relaunch after partnering with NBCUniversal, and that operating conditions in South Africa has worsened.
On Tuesday morning MultiChoice shares tanked - dropping almost 15% in the morning and wiping out close to R8 billion in shareholder value, before recovering somewhat during the course of Tuesday, and closing down around 14% lower.
In its trading update, MultiChoice said that "Sustained high levels of loadshedding are having a significant impact on the activity levels of the customer base."
While not specifying it directly, investors and analysts are taking MultiChoice's trading warning to mean that its top-end DStv premium subscriber segment - its most valuable and biggest contributor to ARPU (average revenue per user) - is very likely falling again, as the number and overall percentage of DStv Premium and DStv Compact Plus subscribers are possibly continuing to decline.
MultiChoice warned in its trading statement that its trading margin has been lowered to between 23% to 28% instead of earlier market guidance of between 28% to 30% for its 2023 financial year.
