Blu Label Unlimited – which rebranded from Blue Label Telecoms last year – has paid its first dividend in eight years, rewarding shareholders with 40 cents a share for the year to September.
The company, having spun out of Cell C as a separate listed entity on 27 November last year, declared an interim dividend of 43.56c for the period to November, reflecting what it calls “confidence in the group’s financial position, cash generation and sustainable earnings outlook”.
The company notes it had promised to return to paying dividends, which it has now done.
Investors reacted positively to the news, with the share price up 6.22% in early trade following the release of the results. The stock is up 105.05% over the past five years to its current price of R9.76 a share.
BLU – its listed share code and condensed name – says it exited the first six months of the year with a simplified structure, stronger capital base and clearer strategic direction, positioning it to focus on scalable digital platforms, infrastructure and adjacent technology-enabled services.
“BLU today is a very different business to what it was even two years ago,” says co-CEO Brett Levy.
“We have clarity of purpose, a simplified structure and a portfolio of platforms that are relevant, scalable and defensible. Our focus now is on execution – converting capability into earnings growth and delivering sustained value for shareholders.”
It now has strong operational momentum, improved earnings visibility and a clearer pathway to medium-term value creation, its results booklet says.
‘Deliberate journey’
Cash and cash equivalents rose by R1.8 billion, largely due to the R2.7 billion earned from selling down a 30% stake in Cell C, based on an equity valuation of R9 billion.
Some of the funds will be used to reduce interest-bearing borrowings, while the balance strengthens liquidity and supports working capital, BLU said ahead of the listing.
“The successful Cell C IPO represents the culmination of a long and deliberate journey. It unlocks value, removes complexity from the group and gives investors a far clearer view of BLU as a standalone, high-quality digital enablement platform,” says Brett Levy.
“Importantly, it also gives us greater strategic and financial flexibility as we execute the next phase of growth.”
Cost consideration
The Cell C listing, however, came at a significant accounting cost. BLU took a R5.2 billion hit on its stake because the value of the investment at listing was lower than the carrying value on its books.
The impact was driven by a R6 billion drop in Cell C’s valuation, partly cushioned by an R841 million gain from remeasuring a previously held interest after The Prepaid Company took control of Cell C in September 2025.
Overall, BLU reported a headline loss per share of 555.56c, a 1 363% decline year-over-year.
Stripping out Cell C and related items, revenue came in at R5 billion, with net profit after tax of R389 million, headline earnings of 44.17c and earnings per share of 43.22c – representing a normalised headline earnings per share decline of 16% to 38.60c.
BLU cautions these figures fall outside its primary International Financial Reporting Standards statements but say they offer a clearer basis for evaluating its sustainable earnings profile.
Energy as a priority
Blu Label’s core prepaid distribution and payments operations remain resilient, with the company focused on protecting market share, strengthening client relationships, improving revenue assurance, and expanding its municipal payments offering, it says in its results booklet.
BLUEnergy is a key strategic priority going forward. Although currently a modest contributor to group earnings, it is expected to become a meaningful medium-term earnings driver as projects move into construction and first revenues are realised.
After the period end, BLUEnergy secured a multi-year energy trading licence from the National Energy Regulator of South Africa, enabling it to participate in South Africa’s power sector reform and deliver renewable energy solutions across municipalities and independent power producers.
“Over the past six months, we’ve moved decisively from restructuring to execution – focusing capital and management attention on businesses that are cash-generative today and capable of delivering meaningful growth tomorrow,” says co-CEO Mark Levy.
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