MultiChoice Group warned on Friday that shareholders in its Phuthuma Nathi black economic empowerment scheme should expect a big cut to their dividend as the broadcaster struggles to retain customers in a difficult economy.

In a voluntary operational update published on Friday, MultiChoice – which is the subject of a takeover bid from France’s Groupe Canal+ – warned shareholders that market conditions have not improved since it reported disappointing interim results last November.

It said its financial results for the year ended 31 March 2025, which it will publish in the coming months, will show a group under severe pressure as “household spending remains constrained by the ongoing cost-of-living crisis, compounded by elevated inflation and interest rates” in many of the markets in which it operates.

“This is likely to impact negatively on performance in the 2025 financial year,” it said in a statement to investors. “The group has returned to a positive equity position, but capital preservation remains a key consideration in the current environment.”

It said that MultiChoice South Africa is operating in a “challenging consumer environment” that has resulted in “negative subscriber growth and limited revenue growth”. Also, due to “very high levels of personal indebtedness”, it will “take time for positive developments, such as lower interest rates and a stable rand against the dollar, to result in materially higher disposable income for South African consumers”.

‘External adversities’

Outside South Africa, the group — which owns DStv, SuperSport and Showmax, among other assets — is facing what it called “unprecedented external adversities, including macroeconomic headwinds as well as disrupted power supply and severe currency depreciation in some of its key markets in the rest of Africa”.

It warned that although it hasn’t yet determined the MultiChoice South Africa dividend for the 2025 financial year – this will be discussed by its South African board in June – Phuthuma Nathi shareholders “should be aware that any MultiChoice South Africa FY25 dividend is likely to be significantly lower than prior years”.

Read: Canal+ buyout: Sipho Maseko to invest in MultiChoice entity

MultiChoice shares closed about 1% lower on Friday at R110.60 each. The share price is, however, being supported by Canal+’s mandatory offer to shareholders of R125/share in cash.

MultiChoice and Canal+ recently agreed to extend the so-called long stop date for the transaction by five months to give them more time to convince regulators to allow the deal to proceed. The new long stop date is 8 October 2025, but this may be extended again if circumstances warrant it. – © 2025 NewsCentral Media

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