Canal+ SA on Friday said it has reached a tax agreement with authorities in France and expects a ‘material’ one-off cash flow improvement in 2025.
In response, shares in Canal+ rose 5.7% to 212.20 pence each in London on Friday.
In addition, the Paris-based subscription television and video streaming business confirmed its 2025 earnings before interest, tax and amortisation and revenue outlook.
The firm said it is on track to deliver organic growth in 2025 and expects annual Ebita to reach €515 million, in line with expectations, and growth of 2.4% from €503 million in 2024.
Canal+ is the result of a four-way split of media conglomerate Vivendi SA into Canal+, publisher Louis Hachette, and advertising firm Havas. Hachette is now listed in Paris, while Havas is listed in Amsterdam. Vivendi itself continues as a holding group and remains listed in Paris.
Canal+ said it has focused on strengthening its balance sheet, ahead of the acquisition of MultiChoice Group.
The company said it has ‘optimised’ the phasing of payment terms on various contracts, resulting in an exceptional one-off improvement in working capital, which is expected to ‘meaningfully’ increase cash flow from operations in 2025.
In addition, the company now anticipates lower-than-expected restructuring disbursements in 2025, leading to an additional positive net effect on 2025 CFFO.
As a result, the group now expects its 2025 CFFO to exceed €500 million.
Canal+ does not expect its one-off contract phasing update to structurally impact CFFO beyond 2025, but is confident that the positive cash effects of other initiatives will start ‘ramping up’ in 2026.
These include the renewed French cinema financing agreement, the decrease in costs in France and the profitability improvement of new assets - GVA & Dailymotion.
Once the tender offer for Multichoice is completed, Canal+ said it will consider its capital allocation policy.
‘The group is looking to provide return to shareholders through a progressive dividend policy, while potentially considering share buyback opportunities in due time,’ it added.
In addition, Canal+ said it has reached an agreement with the Centre national du Cinema et de l’Image animee regarding the rules applicable to determining the tax basis of the French tax on television services.
The CNC is an agency of the French Ministry of Culture and is responsible for the production and promotion of cinematic and audiovisual arts in France.
This ‘settles the disputes relating to past fiscal years and removes uncertainty regarding the possibility of a material additional disbursement,’ Canal+ said.
As a result, the company expects no impact on cash, with a one-off impact on its income statement in the first half of 2025 in the form of exceptional charges.
First half results are scheduled to be released on July 29.
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