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Blue Label rallies on earnings prediction

Paula Gilbert
By Paula Gilbert, ITWeb telecoms editor.
Johannesburg, 11 Feb 2016
Joint-CEOs Brett and Mark Levy are all smiles as Blue Label predicts an interim HEPS rise of at least 23%.
Joint-CEOs Brett and Mark Levy are all smiles as Blue Label predicts an interim HEPS rise of at least 23%.

Blue Label Telecoms' share price rallied over 2% on the back of news that its interim headline earnings per share (HEPS) will likely be 23% to 27% higher.

Earnings per share for the six months ended 30 November are also expected to rise as much as 25% to between 51.78c and 53.49c per share. The company says the earnings spike is predominantly attributable to "organic growth, underpinned by a hybrid of an expanded customer base supported by an enhanced bouquet of products and services afforded to it".

Blue Label says it has also continued to confine operational costs.

The JSE-listed company, which is in the process of buying a major stake in Cell C, will release its interim results on 24 February.

In December last year, Cell C's board gave its approval for Blue Label to buy a 35% stake in the mobile operator for R4 billion.

The Blue Label investment is part of a plan for Cell C to recapitalise the company. The restructuring plan will see Cell C management and staff acquiring a 30% stake in the company and will reduce net debt to R8 billion or less when implemented.

The restructuring is still subject to regulatory approvals but is expected to come into effect in June.

Blue Label's stock meanwhile continues to grow in value and has risen over 53% in the past 12 months and almost 143% in the past five years. At yesterday's close, the shares were worth R12.23 each, putting the company's market capitalisation at R8.2 billion.

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