Prepaid specialist Blue Label Telecoms says it is likely to report a more than 40% increase in earnings for the year to May 2021, driven in part by the sale of its Mexican unit and closure of a retail operation.
Blue Label — which specialises in selling prepaid airtime, electricity and ticketing — said it expects to report earnings per share (EPS) of between 94.27c and 94.83c, up from 13.89c previously, translating to an increase of up to 583%.
The company says the increase in earnings is primarily attributable to the disposal of its 47.56% interest in Blue Label Mexico. In 2020, Blue Label Telecoms sold its stake in the Mexico-based company for $11.5m (about R188m at the time) to focus on its SA businesses.
Blue Label’s earnings performance was also helped by the partial recovery of losses from its recently closed retail unit WiConnect. In the previous financial year, the group shut down WiConnect, which sold smartphones, tablets, gadgets, accessories, airtime, data, event tickets and bus tickets, after months of inactivity brought on by Covid-19.
The group, which is seeking a deal with lenders to recapitalise stricken mobile operator Cell C, said it strengthened its cash position, generating R1.5bn in the current period from its operations.
Core headline earnings for the period amounted to R788m, equating to 89.65c per share, of which R763m related to continuing operations and R25m to discontinued operations.
Core headline earnings in the prior year amounted to R562m, or 62.71c per share.
“In spite of 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,” the group said on Friday.
“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 — headed by brothers Brett and Mark Levy — is expected to release it earnings report for the period on August 26.
In afternoon trade, shares in Blue Label — up about 43% so far in 2021 — were 1.41% weaker at R5.60.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.