Blue Label Telecoms on Wednesday reported a 22% increase in headline earnings to R668 million for the year ended May 2016.
Operating profit climbed to R1.14 billion, from R986 billion, with the company reporting that its performance was primarily attributable to organic growth, underpinned by an expanding multitude of distribution channels and in turn a growth in market share.
Blue Label’s core business is the virtual distribution of secure electronic tokens of value across a global footprint of touch points. The company distributes prepaid airtime, starter packs, data and electricity tokens, as well as transactional services such as ticketing and financial services.
Ir reported last week that plans to acquire 35% of Cell C for R4 billion as part of a recapitalisation plan are still “on track”.
In December last year, the boards of Cell C and its holding company 3C Telecommunications accepted an offer from Blue Label Telecoms for the deal.
The deal is expected to involve Cell C management and staff holding about 30% of the mobile network’s shares, with 3C Telecommunications holding about 35%.
On the international front, Blue Label said on Wednesday that its share of losses in Blue Label Mexico (BLM) declined by 28%, from R89 million to R63 million.
A negative contribution of R27.7 million from Oxigen services India (OSI) was congruent with significant expenditure incurred on the expansion of its mobile wallet subscriber base.
The above losses incurred impacted negatively on group headline earnings per share by 9.50 cents and 4.16 cents respectively, it said.
- Increase in headline earnings per share of 22% to 100.35 cents
- Increase in core headline earnings per share of 21% to 102.85 cents
- Increase in dividend per share of 16% to 36 cents
- Increase in revenue of 19% to R26.2 billion
- Increase in gross profit of 11% to R1.8 billion
- Increase in EBITDA of 15% to R1.2 billion
Looking ahead, Blue Label said that the participation in the recapitalisation of Cell C is progressing positively. “Management are of the opinion that the transaction is compelling both from an investment and commercial perspective.”
The group said it is well positioned to meet the increased demand for low cost smart phones and tablets, through its extensive distribution network in South Africa and beyond its borders.
“The distribution of prepaid electricity will continue to grow, through enhanced government initiatives to roll out additional prepaid electricity meters throughout South Africa, Blue Label said.