Monumentalist

Investment Analysis: AFRICAN MEDIA ENTERTAINMENT LIMITED (JSE: AME)

Date: 9 January 2026 Analyst: [Gemini]

Reporting Periods Used:
Interim Results: For the 6 months ended 30 September 2025 (Published 27 Nov 2025).
Annual Results: For the year ended 31 March 2025 (Published 29 May 2025).
SENS Announcements Reviewed (L12M):
Unaudited Interim Results & Dividend Declaration (Nov 2025).
Results of Annual General Meeting (Aug 2025).
Reviewed Results for Year Ended 31 March 2025 (May 2025).
No major director dealings or cautionary announcements flagged outside of routine operations.

Market Cap: R312 million (Micro Cap)
Share Price: ~4,500 cents (R45.00).
Dividend Yield (L12M): 10.0%
Calculation: Interim Declared Nov 2025 (120c) + Final Declared May 2025 (330c) = 450 cents Total.
Context: This is a massive yield, covered comfortably by earnings.
Liquidity Check: HIGH RISK / ILLIQUID
Average Daily Volume: Extremely thin. Often trades fewer than 1,000 shares per day; some days see zero volume.
Flag: This is an "income stock" typically held by long-term value investors. Entering or exiting a large position without moving the price is difficult.
P/E Ratio: 5.7x
Calculation: Price (4,500c) / TTM HEPS (~790c).
Note: The stock trades at a depressed multiple typical of small-cap media stocks, despite growing earnings.
Net Asset Value (NAV): 4,854 cents per share
Price-to-NAV: 0.93x. The stock trades at a 7% discount to its Net Asset Value, which is rare for a company with such high Return on Equity (ROE).

Business Overview AME is a focused media group specializing in audio and digital platforms. Its "crown jewels" are its radio assets:

Algoa FM: Dominant commercial station in the Eastern Cape.
OFM: Dominant commercial station in Central South Africa (Free State/Northern Cape).
Kaya FM: A significant strategic minority interest (increased to ~29.9% via Mokgosi Holdings in late 2024/2025).
Digital/Services: Includes Moneyweb, MediaHeads 360, and United Stations (radio sales house).

Performance Trend (Interim Sept 2025 vs Sept 2024)

Revenue: Expanded. Up 17% to R180.4 million.
Profitability: Strong Growth. Operating profit up 10% to R26.7 million; HEPS up 15% to 283.5 cents.
Balance Sheet: Despite paying down debt (related to the Kaya FM deal) and paying hefty dividends, the group retains a solid cash pile of R60 million.

Sector Context

Macro Factor (Advertising Spend): Resilience of Radio. While print media in South Africa is collapsing, regional radio remains robust. Advertisers value the loyal, localized audiences of stations like OFM and Algoa. However, the sluggish SA economy limits "real" ad spend growth, forcing players to fight for market share rather than organic market growth.

Bull Case (The Income Machine): Yield & Quality. You are buying a highly cash-generative business at a P/E of less than 6x with a double-digit dividend yield (10%). The management team is conservative and shareholder-friendly, consistently returning cash to owners. The discount to NAV provides a margin of safety, and the increased stake in Kaya FM offers potential future upside if that station's performance improves.
Bear Case (The Liquidity Trap): Market Indifference. The market largely ignores this stock. It is too small for institutional investors, leading to a perpetual valuation discount. If you need to sell your shares in an emergency, you may have to accept a 10-20% discount to the market price to find a buyer.
Fair Value Estimate: 5,500c â 6,000c
Basis: A conservative 7x-8x P/E on TTM earnings (given the high cash conversion and yield) would justify a price well above R55.00.
Final Rating: BUY (For Income)
Caveat: Strictly for "buy and hold" investors seeking dividend income. Do not buy this for short-term capital gains or if you require immediate liquidity.