Blue Label Telecoms shares jumped more than 7% on the JSE on Thursday after it said it expected to report sharply higher annual earnings and as engagements on its proposed restructuring continue.
Earlier on Thursday the Competition Tribunal approved Cell C’s move to acquire Comm Equipment Company (CEC), which specialises in services for contract customers, from Blue Label.
At 9.30am, Blue Label share were up 7.25% to R17.75, after briefly touching R18. But by market close the stock had pared a lot of those gains to close 2.96% higher at R17.04, their biggest one-day gain in a month.
The company’s shares are among the best performers on the JSE so far this year, with a gain of about 192%.
The group, which is Cell C’s largest shareholder, said in a trading update it expected headline earnings per share (HEPS) for the year to end-May to be 517%-521% higher in a range of 454.49c-457.44c.
Earnings per share are expected to be 279%-283% higher, it said. It gave no details for the higher earnings.
The group’s update on Thursday follows its report earlier in August that earnings would be more than 20% higher.
The prepaid specialist group, which sells prepaid vouchers for cellphone data, airtime and electricity, is preparing to change its name to Blu Label Unlimited Group.
In May, Blue Label — valued at R15.5bn 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 being listed on the local bourse.
Earlier in August, Blue Label renewed its cautionary announcement saying the terms and conditions of the proposed restructure were still being developed in consultation with the group’s financial advisers. They remained subject to ongoing engagement and approvals by the boards of Blue Label and Cell C, as well as shareholder and regulatory consents.
As part of the move to list SA’s fourth-largest mobile carrier, Cell C has pushed to internalise all customer operations, from marketing and supply chain to billing and collections. Thus the move to acquire CEC, which the tribunal approved on Thursday without conditions, takes it one step closer to being more self-sufficient.
Cell C has long harboured ambitions of going public — a plan first floated by former CEO Jose Dos Santos in 2018. However, that plan came to nothing as the company struggled to make a profit, making its initial public offering 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 write-down, 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.
Blue Label’s shares are up more than 200% for the year to date on the JSE, driven in part by excitement about the restructuring of Cell C and signs of the group’s turnaround.
Update: August 21 2025
This article has been updated with closing share price details.
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