Blue Label eyes further growth with Cell C partnership

Blue Label Group on Thursday reported a marginal rise in revenue of 2% to R13.5 billion for the interim financial period ended November 2017.

The group, which in August 2017, acquired 45% of  Cell C and 47.37% of 3G Mobile for R5.5 billion and R900 million respectively, reported a rise in operating profit to R717.8 million, from R660 million before, while net profit increased to R1.4 billion, from R564 million in 2016.

Additional reporting highlights were as follows:

  • Increase in ebitda of 9% to R778 million
  • Increase in earnings per share of 110% to 167.43 cents
  • Increase in headline earnings per share of 109% to 166.68 cents
  • Increase in cash generated from operating activities to R3.1 billion

Blue Label said that core headline earnings for the six months ended November 2017 amounted to R1.36 billion, resulting in an increase  of R804 million (146%).

Post-dilution resulting from the issue of 200 million shares at R15 per share, core headline earnings per share increased by 108% to 168.42 cents per share.

These earnings comprised the group’s share of profits in Cell C of R928 million, which included the recognition of  an increase in a deferred tax asset of R1.92 billion, of which the group’s 45% share amounted to R865 million and its  share of profits in 3G Mobile of R36 million.

Blue Label said its share of losses in Blue Label Mexico continued to decline from R22.1 million to R10.5 million (52%) over the period.

Looking ahead, Blue Label  said it will focus on further penetration into the informal market through the provision of point of sale devices to the multitude of independent traders.

“Blue Label is one of the primary distribution channels for Cell C products and services. Our investment in Cell C provides a compelling value proposition to the group, to Cell C and its customers, through vertical integration  that will afford both companies the opportunity to realise synergies in product distribution.

“Cell C now has a  sustainable capital structure to deliver on their strategic objectives,” it said.

Read: Cell C reports 12% revenue growth as it gains subscribers

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Blue Label eyes further growth with Cell C partnership