There was a time when every discourse about independent radio and TV broadcasting in Nigeria revolved around DAAR Communications Plc. Back then, the company was setting the pace and holding the ace in the country’s media industry. It owned the first independent TV and radio stations in Nigeria (Africa Independent Television (AIT) and RayPower FM). Without question, it revolutionised the broadcasting industry.
But things have changed since those glorious days. Today, DAAR Communications Plc is only but a shadow of its former self. Its problems are many, due to many factors which are mostly of its own making. For instance, its failure to keep abreast with changing trends, hence the inability to stay ahead of the competition.
On that note, welcome once again to Nairametrics’ company focus for this week. As you already know, this is a column where we profile little-known companies with shares listed on the Nigerian Stock Exchange (NSE). Today, we are looking at DAAR Communications Plc.
It is interesting that though millions of Nigerians are familiar with AIT and RayPower FM, not a lot of them know that the media outlets are owned by DAAR Communications Plc. In the same vein, not many Nigerians know that the media company is also listed on the Nigerian bourse. Well, just in case you never knew, now you do. You will also get to know more about the company’s history, its operations, services, recent financial performance and more.
DAAR Communications Plc: A corporate overview
Incorporated in 1998 as a limited liability company, DAAR Communications is the foremost private broadcasting company in Nigeria. It is specifically engaged in the production of news, current affairs and entertainment programmes for both radio and television audiences. Following years of relatively steady growth, it became quoted on the Nigerian Stock Exchange in April 2007.
DAAR Communications Plc revolutionised the broadcasting industry in Nigeria, shifting focus from state-owned media organisations such as NTA and Radio Nigeria. As part of its shakeup of the media industry, it also pioneered 24-hour broadcast service in the country.
The company’s first radio station, RayPower 100.5FM, began commercial operation earlier in 1994, shortly after the Federal Government had deregularised the sector. Soon afterwards, it started its TV broadcasting arm, Africa Independent Television, which is also simply known as AIT. This was the first satellite broadcasting service in Nigeria and a thrill to many people who, until then, were only used to the Nigeria Television Authority (NTA).
In 1999, DAAR Communications Plc launched a second radio station (RayPower FM 2), which was later followed by a third station called (Faaji 106.5 FM), launched in 2012. The company also established a multi-channel direct-to-home subscription TV known as Daarsat.
A breakdown of the company’s segments and how much they contribute to revenue
AIT ‘Sharing the African Experience’: When one thinks about DAAR Communications Plc, the first thing that comes to mind is its television arm, AIT. The TV station offers various types of news shows, talk shows, political programmes, reality shows, music programmes, etc. All of these are designed to cater to various audiences, often interspersed with loads of advertising. It is, therefore, not surprising that AIT generates about 90% of the company’s total revenue. Information available in its 2017 financial report shows that the TV arm generated about N3.1 billion out of the overall total revenue of N3.7 billion.
Radio: The company’s first radio station, RayPower FM, started out with a distinct type of radio programming that was unique and exciting to many Nigerians. But a lot of new radio stations have since caught up and even surpassed RayPower, thereby leaving nothing really desirable about it. But it continues to operate, and along with the likes of recently-established Faaji FM, generates about N430 million in annual revenue.
DAAR News: This segment of the company generates an average of N140 million in annual revenue, according to the company’s 2017 financial report.
DAAR UK Operation/AIT International: This segment is concerned with the responsibility of marketing the company’s channels in the United Kingdom. It has not been successful with this venture, generating only N21 million in full-year 2017 and then zero revenue in half-year 2018.
Daarsat: Just like DAAR Communications’ UK operation, the Pay TV segment has not been successful. It generated zero revenue in half-year 2018.
About the company’s market audience
The company makes money through the provision of media services. In this sense, it caters to the needs of TV viewers and radio listeners, airing interesting programmes of assorted kinds. Related to this is the slew of advertising services which the company provides for major brands in the country.
Some key members of the company’s Board of Directors
The most famous member of the company’s Board is Dr Raymond Aleogho Dokpesi. He founded the company and currently serves as a Non-Executive Director. Dr Dopkesi is one of Nigeria’s most popular businessmen and politicians. In 2016 he contested but failed to become the Chairman of Nigeria’s opposition party, the People’s Democratic Party (PDP).
Other notable Board members are:
- Tony A. Akiotu: Group Managing Director
- Chief Raymond Paul Dokpesi Jnr: Chairman
- Chief Stanley Sagboje: Executive Director
- (Mrs) Oluwatosin Dokpesi: Executive Director, etc.
A look at the competition
Gone are the days when it was just DAAR Communications Plc playing in the independent broadcasting space. These days, the competition in the sector is fierce. As you may well know, so many new radio and TV stations spring up every now and then, the most notable of which include: Channels TV, TVC, Ebony Live TV, The Beat FM, Cool FM, Classic FM, etc. The effect of the competition on DAAR Communications Plc is reflected in its declining revenue and profitability. Unfortunately, the company is not doing enough to curtail this.
A look at the company’s financial performance
DAAR Communications Plc has been struggling to maintain profitability in recent years. In 2017, it reported its worst financial result yet, with profit declining to N481 million from N2.1 billion in 2016. The losing streak continued this year, according to its recently released half-year 2018 result (N412 million in June 2018 compared to N1.2 billion in June 2017). However, revenue increased to N1.9 billion in half-year 2018, compared to N1.7 billion in the comparable period.
So why is the company struggling?
It is easy to say that the company’s financial trouble is due to the growing competition; after all, it is an obvious fact. But there are other factors besides the competition, one of them being that DAAR Communications has failed to maintain its leadership position. Like many other companies which were pioneers in their respective industries, its disposition to change and restructuring has been lackadaisical.
This is such that while the likes of Channels TV and TVC are improving their service delivery, AIT continues to bask in the glory of its former days. For instance, there are so many technical glitches one would experience while watching AIT, which would seldom be experienced when watching TVC. Hence, it has become imperative for the company to improve the quality of its service delivery.
The company may also consider concentrating its focus, resources and efforts only on business ventures that are profitable. In view of this, divesting from Daarsat and AIT International would not be a bad idea. Those two ventures have failed to ensure profitability, so there is no justification for continued investment in them.
In conclusion, DAAR Communications Plc still has a lot of potentials. All it needs is a slight refocusing in business strategy, some improvements in its corporate governance, and a reinvigoration of the initial drive which instigated a transformation of Nigeria’s broadcast media space in the 1990s.