Blue Label Telecoms eyeing M&As in 2012
Mark Levy, joint CEO of listed telecommunications group Blue Label Telecoms (BLU) says the group will look at potential M&A activity in 2012.
Blue Label is expecting headline earnings per share (HEPS) in the six months to November 2011 to be 38% and 48% higher – from 25.45 cents in the previous corresponding period, when it publishes its results on February 22.
The telecoms group attributes the growth in earnings to the non-recurring income received from extraneous transactions in December – the details of which, it said, are confidential.
Its core earnings per share are expected to rise between 31% and 41% from 27.27 cents a year ago, while basic earnings per share growth are expected to be between 36% and 46% higher from 25.45 cents.
“We have built a robust infrastructure (AEON), which is capable of a lot more throughput by way of additional products and services. We are always looking at opportunities, projects, M&A work – as we always strive to deliver more,” Levy said in an interview with BusinessTech.
In November 2011, the group announced a strategic acquisition and partnership with mobile marketing and loyalty reward group , Mobilitrix, to accelerate growth in loyalty and mobile couponing services and strengthen its customer retention and incentivisation capabilities.
Mark Levy said at the time: “the mobile coupon segment is experiencing as much as eight-fold growth with redemption values expected to exceed $43 billion globally by 2016.”
In August, Blue Label announced a 13% increase in revenue to a record R18 billion for for the year ended May 2011, along with an 18% increase in net profit after tax to R431 million.
The group pointed to R566 million cash generated from operations, with cash on hand at year end at R2.2 billion, and a dividend of 14 cents per share was declared.
The group lead has outlined a capex spend of approximately R100 million for the financial year, “but most of our capex directly correlates to our production of income – and of course each project has to meet our internal ROI and other hurdles,” Levy said.
Looking ahead, towards potential industry growth, Levy believes that the widespread use of the ‘feature phone’ with an almost endless capability for handling transactions of goods and services, “will, as we say, bring the product to the customer rather than force the customer to the product”.
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