Wednesday, March 10, 2010

Morobe's foresight helps Kagiso Media weather the storm

Companies like Gloo bring invaluable possibilities, he said, but with the Internet, the question is whether you can make money. "Gloo is one step to prove that you can."

Morobe said Kagiso was being proactive and creating those diversification markets and attracting advertising to those mediums.

He said investment in new media was not easy, as it was imperative that one found acquisitions which would deliver results rather than burn cash. "It is a tough call for us as a company as we must bring our board along."

SHOOT: What do you mean you haven't heard of GLOO Digital, it's just South Africa's most creatively awarded digital agency and Digital Design Agency of the year in 2007, 2008 and 2009.
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Company fares better than peers, writes Marcia Klein. Kagiso Media chief executive Murphy Morobe can justifiably claim to have shown strategic foresight ahead of the downturn.

The media company, whose investments include East Coast Radio, Jacaranda and Urban Brew, reported a 5% decrease in earnings on a 4% rise in revenue in the six months to December. While the results were, in isolation, pretty pedestrian, Kagiso has fared better than many other media companies. And it was still able to continue to generate cash and maintain its dividend.

While revenue from broadcasting dropped marginally, a new acquisition - digital design company Gloo Digital - added R10.2-million, while revenue from another acquisition, Urban Brew Studios, was R83.1-million.

Morobe said Kagiso's "overall strategy is in the media conversion space and to find businesses to complement the core radio assets - not just to bring in revenue, but what they can do. The Internet is a major part of our strategy", he said.

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