Blue Label Telecoms (BLT), specialists in prepaid products and the electronic distribution of virtual merchandise, says its ‘back-to-basics’ strategy is progressing well as it simplifies its portfolio and reverts to core business.
On Thursday (26 August), the group reported results for the year ended May 2021, showing that revenue generated by the continuing operations declined by 11% from R20.9 billion to R18.6 billion.
However, as only the gross profit earned on PIN-less top-ups, prepaid electricity, ticketing and gaming are recognised as revenue, the effective growth in revenue equated to 10% – from R59.7 billion to R65.8 billion.
BLT said it continues to increase market share and bolster its product and services mix to defend and grow its positions in the market. Gross revenue generated on PIN-less top-ups increased by R4.2 billion (28%) from R15 billion to R19.2 billion.
Net commissions earned on the distribution of prepaid electricity amounted to R282 million. Revenue generated on behalf of the utilities increased by 18% from R22.7 billion to R26.7 billion.
Core headline earnings for the year ended 31 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, the group said.
The headline earnings of 86.16 cents per share, was up from 58.16 cents per share reported in the prior reporting period, while core headline earnings of 89.65 cents per share, was up from 62.71 cents per share before.
On 2 August 2017, Blue Label, through its wholly-owned subsidiary, The Prepaid Company, acquired 45% of the issued share capital of Cell C Limited (Cell C) for a purchase consideration of R5.5 billion.
At 31 May 2019, the group’s investment in Cell C was impaired to nil. It said that it remains at nil at 31 May 2021.
Blue Label noted that Cell C reported revenue of R13.95-billion from R14.59 billion previously.
Cell C, it said, reported a significant turnaround in profitability over the reporting period – R2.4 billion in profit, from a prior loss of R10.69 billion loss.
The mobile operator has 12.3 million customers, up 4% year-on-year, and recorded a 19% growth in prepaid ARPU, with R76 overall ARPU, BLT said.