Blue Label Telecoms acquires local SMS firm
Blue Label Telecoms, a distributor of pre-paid vouchers, has acquired a 51% stake in Panacea Mobile, a bulk SMS solutions provider based in Cape Town.
The terms and conditions of the deal were not disclosed, but the deal concluded late last year, Blue Label said.
“We can confirm acquiring a 51% stake late last year in Panacea Mobile in order to support our bulk SMS distribution strategy,” the group said in a statement to BusinessTech.
Panacea Mobile specialises in the entire mobile value chain, from the development of software through to the delivery of bulk SMS via its SMS Gateway.
Blue Label Telecoms is expected to publish its interim results for the half year ended November 2012, on 20 February.
Looking ahead at the groups’ half earnings report, expected out on February 20, investment analyst at Investment Solutions, Chris Hart noted a spike in the group’s share price to an all time high, surpassing R9.00 on the JSE.
Speaking on CNBC Africa’s Hot Stoxx show, he said: “That spike might be a little too much at this stage. In other words, a bit on the coat tails of MTN and Vodacom. But I think it’s in a good space. It’s a good link to very strong businesses,” he said.
However, Paul Theron, equities asset manager and CEO of Vestact, highlighted potential problems for Blue Label Telecoms. He said that, while airtime has been a good seller in the past, there has been a lot of movement in mobile payments.
Theron said that, while many people still used cash to purchase airtime, in the future that could change as people go online and buy airtime directly from their bank account.
“This is a company that has done really well, its trading at an all-time high,” Theron said, adding that Blue Label was unlikely to stand still in terms of its technology evolution.
“This is a company that is in danger of being disintermediated, it’s a simple as that,” opined Hart, before quickly adding that in an emerging market context, there would always be a need for the pre-paid services provided by Blue Label.
“Its not under immediate threat, but the question is do you start seeing stinted growth, where the industry itself still is experiencing continued growth?” Hart questioned.
In August Blue Label reported a modest rise in revenue to to R18.72 billion for the year ending May 2012, from R18.06 billion previously.
Operating profit improved to R658.92 million, from R451.75 million in 2011, while headline earnings per share increased by 40% from 46.20 cents to 64.65 cents.
Shares in the group have climbed steadily over the past year from an opening of R61.5 at the start of February 2012, and a low of R5.17, to a current trading price of R8.84 by lunch on Thursday (7 February).
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