The good times continue to roll for Cell C’s largest shareholder, Blue Label Telecoms, with the prepaid specialist forecasting higher earnings for year to end-May 2025.
Headline earnings per share (HEPS) — which strip out the effect of one-off financial events — are expected to increase by at least 14.73c, or more than 20%, compared with the year-earlier period.
Core HEPS are also expected to increase by more than 20%.
This comes as the prepaid specialist group prepares to change its name to Blu Label Unlimited Group.
In May, Blue Label — valued at R15bn on the JSE — said it was considering spinning off Cell C as part of the group’s restructuring in a move that would result in all four of SA’s big telecom companies listed on the local bourse.
Blue Label founder brothers Mark and Brett Levy hope the group will now be judged on its performance as a prepaid platform rather than as a proxy for Cell C.
Cell C has long harboured ambitions of going public — a plan first floated by former CEO Jose Dos Santos in 2018. However, this plan came to nothing as the company struggled to make a profit, making its initial public offering (IPO) a challenging prospect for investors.
Cell C has struggled to make a profit since it opened in 2001. It had been laden with long-term debt of R8.7bn, prompting Blue Label and Lesaka Technologies (formerly Net1), which previously had a 15% stake, to write down their combined R7.5bn investment to nil.
Four years after this writedown, Blue Label said in February 2023 it had revalued the Cell C investment on its books to R962.5m, showing evidence of some positive momentum in the mobile business.
At Friday’s of R16.54 on the JSE, Blue Label shares have almost tripled in value so far this year, driven in part by excitement about the restructure of Cell C and signs of the group’s turnaround.
Loyiso Mpeta, an analyst at Mshindi Bingwa Group, said the positive momentum since the stock hit a low of R2.35 in September 2023 has been “nothing short of amazing.”
“If you’re not already in the stock, I wouldn’t chase it, unless you have a long-term view because there is still upside potential from the five-wave [technical] outlook.
“Looking at the fundamental picture, it looks much more positive now than it did two years ago,” Mpeta said during an interview on Business Day TV this week.
Blue Label reported modest growth in HEPS at the halfway stage of its financial year as revenue declined 4% to R7.24bn.
The group, which sells prepaid vouchers for cellphone data, airtime and electricity, reported HEPS of 46.01c for the six months to end-November from 45.91c a year earlier.
A further trading statement will be issued once “there is reasonable certainty regarding the specific ranges by which earnings, headline, and core headline earnings per share have increased”, it added.
Update: August 10 2025
This story contains the latest Blue Label share price
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