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Blu Label has flagged a sharp drop in full-year earnings as transactions related to the listing of Cell C continue to weigh on the group’s results.
The prepaid voucher and ticketing group said it expects to report a more than 80% drop in headline earnings for the year ended May. HEPS, which strip out the impact of one-off financial events, are expected to decline 81%-83% to 79.02c to 88.14c, it said on Friday.
It expects to report a loss per share of 536.96c-542.50c compared with earnings per share of 276.52c in the previous year.
The group attributed the earnings decline to Cell C and Comm Equipment Company’s (CEC) financial results and “extraneous items” related to a set of restructuring transactions instituted at the time of Cell C’s listing, as well as losses on disposals and impairments.
Excluding these items, Blu Label would have reported revenue of R9.4bn, gross income of R2.6bn, earnings before interest, tax, depreciation and amortisation (ebitda) of R923m and net profit after tax of R677m, it said.
The group had previously told investors that the non-operational accounting effects arising from the Cell C restructuring transactions and outcome of the listing would continue to affect reported earnings for its financial year ended May 2026.
At the half-year stage, the group reported a loss comprising R6bn recognised on the disposal of The Prepaid Company’s (TPC’s) investment in Cell C and CEC. Cell C’s listing had been at a market value of R9bn, partially offset by a gain of R841m on the remeasurement of the previously held interest when TPC acquired control of Cell C.
Stock market flotation
Having taken control of Cell C in September 2025, Blu Label embarked on a series of transactions in preparation for the mobile operator’s stock market flotation. As part of this, TPC — through which Blu Label holds its stake in Cell C — sold 50.45% of its holding. In addition, the group disposed of CEC to Cell C.
The group said on Friday that core headline earnings are set to be down 80%-82% at 83.58c-92.82c.
Excluding Cell C Holdings and CEC’s financial results this measure would have totalled R681m, translating to core HEPS of 75.33c.
“As only the gross profit earned on pinless top-ups, prepaid electricity, ticketing and universal vouchers are recognised as revenue, the imputed gross revenue generated from these sources amounted to R99.9bn,” it said.
According to Blu Label, these metrics provide a more meaningful indication of its underlying operational performance and earnings base going forward.
Shares in Blu Label closed just under 1% weaker on Friday at R8.12, but year to date they are down almost 22%.
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