Blue Label Telecoms saw full-year headline earnings per share grow 21% to 82.26c, despite a disappointing performance from the company's Mexican business.
Headline earnings per share could have been almost 13c higher, if not for the impact of losses of R89 million for Blue Label Mexico.
Joint-CEOs Brett Levy and Mark Levy say the strong results were driven by expanded offerings, additional distribution channels, as well as growth from acquisitions.
Revenue grew 14% to R22 billion in the year ended 31 May and gross profit was up 22% to R1.64 billion. The company declared a dividend of 31c per share, up 15% year-on-year.
The company's South African distribution revenue rose 13% to R21.7 billion, while gross profit was up 22% to R1.4 billion.
Blue Label Telecoms says the period saw an increase in the number of products and services in its prepaid airtime, data and starter packs division, with a particular growth area being data.
"We also are opening 46 Edgars Connect standalone stores, with 100 stores planned by the end of the year and 400 over the next 24 months," says Brett Levy. Twenty-two of these stores are already operational.
The company says the prepaid electricity sector was a star performer, with increasing distributor contracts, installations of prepaid residential meters, advancements in technology, and electrification of government housing developments. Net commissions from the distribution of prepaid electricity increased by 23% to R165 million.
The company also sees potential in the prepaid water market, saying the introduction of prepaid water tokens is garnering interest from municipalities, water boards, equipment suppliers, township developers and closed communities. The company is already testing e-tokens in select municipalities and is busy with a market awareness campaign.
Brett Levy says the focus for the period was on gaining brand recognition and growing market share for Ticketpro, the second largest ticketing engine in South Africa. As a result, ticket sales volumes were up 26%.
Blue Label also today announced Yusuf Mahomed has been appointed as an independent non-executive director to the Blue Label board with effect from yesterday. Mahomed was a founding member of 3C Telecommunications, the holding company of Cell C, and was a director of Cell C up until June.
International business
In spite of revenue increasing by 23% for Blue Label Mexico, the business still saw losses increasing from R131 million last year to an equivalent of R186 million this year, of which the group's share equated to R89 million. The company says the main reason for the losses was the initial impact of a strategic decision to become a multi-carrier for all the networks in the territory, as well as increased overheads. The company hopes distribution of digital food vouchers and SIM cards will drive more profitability in the Mexican business going forward.
The group disposed of its interest in UK business Ukash at the end of March. This profit on disposal increased EBITDA by R37 million.
The company saw its Oxigen Services India business swing from a loss of R3.3 million last year, to a profit of R2.6 million this year. This positive turnaround was attributable to increases in revenue by 15% and gross profit by 21%, reported in their local currency.
"The benefits of Oxigen Services India's defined strategy of becoming India's first non-banked mobile wallet that empowers the unbanked masses to instantly transfer and receive cash across the entire country continue to gain momentum," says Mark Levy.
"This has been primarily due to the focus on money transfer services without detracting from its traditional airtime sales."
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