Blue Label Telecoms says it expects a marked improvement in earnings for the year ended May 2021, boosted primarily by the disposal of the group’s 47.56% interest in Blue Label Mexico.
In a trading statement on Friday (20 August), the group also highlighted partial recoupment of losses by the Retail division of its WiConnect stores and the non-re-occurrence of impairments of goodwill and fair value downward adjustments in the prior year.
Blue Label, specialists in prepaid products and the electronic distribution of virtual merchandise, said that a decision was made to cease the operations of the WiConnect retail stores in the prior financial year.
It said that cash flow generated by the group strengthened, with cash generated from operating activities amounting to R1.5 billion in the current year.
Core headline earnings for the year ended May 2021 amounted to R788 million, equating to core headline earnings of 89.65 cents per share, of which R763 million related to continuing operations and R25 million to discontinued operations.
Core headline earnings for the prior year amounted to R562 million, equating to 62.71 cents per share, of which R469 million related to continuing operations and R93 million to discontinued operations.
On the exclusion of non-recurring income of R47 million in the current year and extraneous costs of R163 million in the prior year, core headline earnings from continued operations increased by R84 million from R632 million to R716 million, the group said.
Accordingly, core headline earnings per share from continuing operations increased by 16% from 70.54 cents per share in the prior year to 81.50 cents per share.
“Despite the Covid-19 pandemic impacting many of our merchants and their consumers, our performance and operating model both remain resilient, and we continue to deliver essential services, including electricity, airtime, data, and other digital and financial transactional services to the communities throughout this challenging period.
“Across all segments, we have sought to expand the merchant base while nurturing the existing base and ensuring sustainable and improved merchant profitability,” Blue Label said.
The group is eyeing a recovery from losses suffered in recent times since its acquisition of Cell C. Blue Label wrote off its investment in the mobile operator in 2019.
It decided to close its WiConnect retail stores, which sold smartphones, tablets, airtime, data, event tickets and bus tickets, in 2020.
Blue Label will publish its annual results on Thursday, 26 August 2021.