Blue Label Telecoms says it expects basic earnings per share to increase by between 41% and 45% for the six-months ended November 2020, as it continues to divest in loss-making businesses.
The increase in basic earnings per share, Blue Label said in a trading statement on Wednesday (17 February), is primarily attributable to the disposal of its 47.56% interest in Blue Label Mexico “as well as a positive movement from a negative contribution by the retail division of the WiConnect stores in the comparative period to a partial recoupment of losses in the current period”.
A decision was made to cease the operations of the WiConnect retail stores in the prior financial year.
Headline earnings per share are expected to be between 40.16 cents per share, and 41.76 cents per share, representing a marginal increase of up to 4% from the prior year.
Blue Label, specialists in the sale of prepaid airtime, electricity and ticketing, has seen its fortunes improve following the write-off of its investment in mobile operator Cell C, of which it is the largest shareholder.
“The performance of the Blue Label Group remains resilient in an adverse economic environment. In spite of the Covid-19 pandemic, the Group has continued to deliver essential services, including electricity, airtime, data and other digital services, as well as providing financial transactional services, which have not been negatively impacted.
“Cash flow generated by the group strengthened, with cash generated from operating activities amounting to R970 million in the current period,” it said.
Core headline earnings for the current period amounted to R376 million, of which R351 million related to continuing operations and R25 million to discontinued operations, it said.
On exclusion of non-recurring income pertaining to foreign exchange gains of R22 million, core headline earnings from continued operations amounted to R329 million, equating to core headline earnings of 37.35 cents per share,” Blue Label Telecoms said.