Blue Label talks up cash resources

Brett Levy, joint CEO of Blue Label Telecoms (BLU), has underlined the group’s “very positive” cash position for 2012.

The group announced on Wednesday (February 22, 2011) a 44% rise in headline earnings per share to 36.74 cents – for the half year ended November 2011 – from 25.45 cents before.

Revenue improved to R9.25 billion, from R8.64 billion – with operating profit up to R392.3 million, from R251.81 million.

The group announced a dividend per share of 14 cents, from 12 cents in 2010.

Levy said that the R72 million net increase of cash on-hand, boosted accumulated cash resources to R2.3 billion at November 30, 2011. “This cash generated puts us in a very strong position,” he said.

Cash flow of R795 million, generated from operating activities, was applied to the funding for the additional shareholding in Oxigen; the acquisition of starter pack bases; the pre-payment of Microsoft’s 12% shareholding in the group; and a dividend payment of R107 million, the group said.

Profitability was enhanced by a once-off other income receipt of R79.4 million. “The disclosure of the source and circumstance of the payment are prohibited by a confidentiality agreement,” the group said.

Levy noted that Blue Label spent R14 million on the acquisition of Multiserve in January 2012, with the objective of utilising its 169 stores, located nationally, as a platform for Blue Label’s strategy of marketing its products and services on a retail basis.

The group also said, regarding its arbitration with MultiLinks in Nigeria, that a date is set for November. Blue Label decided to terminate its business in Nigeria in June last year, following the cancellation of a contract with MultiLinks contract.

Blue Label has a 36,7% stake in African Prepaid Services Nigeria (APSN) through a 72% shareholding in Africa Prepaid Services.

In 2010, however, MultiLinks terminated its 10-year contract with APSN for the exclusive distribution of its wireless products to the Nigerian market.

Blue Label has laid a claim for $481 million, but MultiLinks had laid a counter claim.

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Blue Label talks up cash resources