Blue Label FY results preview
Shares in JSE-listed Blue Label Telecoms declined 1.83%, or 11 cents, to R5.90 in afternoon trade on the JSE on Monday (20 August), ahead its full-year results release.
The group expects its headline earnings per share for the year ended May 2012, to be between 35% and 45% higher than 46.20 cents, previously.
Blue Label listed in the telecommunications sector on the main board of the JSE in November 2007, at a price of R9.00. It reached a best of R9.35 on its first day of trade, but has since steadily lost ground, with a low of R3.25 recorded in October 2008.
In the year to date, Blue Label has traded at a high of R6.95, in March, and a low of R5.17 at the end of July. The group has a market cap of R3.98 billion.
Blue Label Telecoms’ core business is the virtual distribution of secure electronic tokens of value (predominantly prepaid airtime, at present) and transactional services across its global footprint of touch points. It has recently made a big push in the Indian and Mexican markets.
For the year ended May 2011, its revenue improved to R18.06 billion, from R 15.94 billion in 2010, while operating profit lifted to R451.75 million from R454.54 million in 2010.
Earnings before interest, taxes, depreciation, and amortisation (ebitda) increased by 5% to R598 million.
Last month, the group highlighted non-recurring income arising from an “extraneous transaction”, although additional details remain confidential.
For the half-year ended November 2011, Blue Label highlighted a rise in operating profit up to R392.3 million, from R251.81 million, “enhanced by a once-off other income receipt of R79.4 million”.
The secrecy surrounding the once-off payment generated much speculation and theory.
Blue Label said in its trading update earlier this month, that the expected growth results from a hybrid of the non-recurring extraneous income received; the share buy-back and subsequent cancellation of 91,851,852 million Blue Label shares – resulting in the weighted average number of shares in issue reducing to approximately 708 million as at 31 May 2012; as well as the trading performance of the group.
Basic and Core earnings per share are expected to exceed the comparative period by between 5% and 10%, it said.
For the year ended May 2011, Blue Label’s board approved a dividend of 14 cents per ordinary share.
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