Nicola Mawson
JSE-listed Blue Label Telecoms’ bid to increase its shareholding in mobile operator Cell C is moving closer to the finish line, with regulatory hearings set to be completed by the end of the year.
Blue Label, which distributes prepaid products as well as virtual merchandise and value-added services, yesterday reported revenue of R89.3 billion in the year to May when PIN-less top-ups – a recent line of offerings – are included. This compares with R76.8bn reported last year. Excluding PIN-less top-ups, revenue would have been R14.6bn.
Headline earnings per share came in at 76.08 cents, a year-on-year gain of 40%.
However, excluding a positive contribution of R66 million in the current year and a negative amount of R523m in the prior year, mostly because of Cell C’s recapitalisation, core headline earnings per share declined by 34% to 68.66 cents per share compared to 104.83 cents per share in the prior year.
Shares in the company dropped 4.06% in afternoon trade to R5.20 per share though the stock is up 103% over five years.
The company continues to seek bolt-on offerings to take advantage of its current infrastructure, co-founder and CEO Brett Levy told Business Report. It continues to make investments in digital distribution infrastructure and fintech innovation.
Levy said that the Independent Communications Authority of South Africa will hold public hearings on the proposed bid to have Cell C’s spectrum licences transferred to it on September 17, with public hearings at the Competition Commission to follow in October so it can take its stake to a controlling 53.37%.
Levy said that until regulatory approval for its bid for a majority stake in Cell C was approved, it would be “business as usual”. He explained that being able to account for Cell C as a subsidiary would make it easier to report than having to include it as an associate as is currently the case.
Cell C CEO Jorge Mendes told Business Report that the mobile operator, which launched in 2001 and unveiled a refreshed brand in the middle of this month, was now looking to enter the enterprise market and was in discussions with companies to lease items such as servers and cloud offerings.
Mendes said the operator did not aim to take on the likes of Vodacom and MTN, which already had substantial enterprise segments, but felt there was enough space for it to enter this market as well.
“We certainly don’t intend to be building a whole product stack. We want to resell,” said Mendes.
Mendes adds that Cell C’s brand refresh was gaining traction as it had brought with it more energy. “It’s really a new positioning for the brand.”
During the launch of its brand refresh, Mendes told Business Report the operator had been focusing on liquidity and cash as it sought to increase revenue. He said the company would be cash positive in the next few months as operational indicators improved.
Mendes said the operator had resized the organisation, changed the funding strategy, and altered management.
“It’s a very proud moment for me to say we have officially begun the turnaround process … We want to own the history.”
The cellular operator has also recently opened a flagship store in the Mall of Africa, in central Gauteng, which offers a range of devices from all the original equipment manufacturers, he said during an interview yesterday.
“We really want to make sure that we stay true to switch and see. What we’re focusing on is changing the perception. We were known as a poor network,” he said.
BUSINESS REPORT