JSE-listed prepaid voucher distributor Blue Label Telecoms is not seeking to expand outside of its current territories, but is looking for acquisition opportunities.
Blue Label, which turned over R18.7 billion in the year to May - a 4% gain - ended the period with R1.98 billion in cash after spending R800 million. The company will use R156 million to pay out dividends, an increase on last year's R107 million.
Joint-CEO Mark Levy says the group is always looking for acquisition opportunities, but has battled to find a good deal. He says 18 different types of potential agreements were investigated last year.
Blue Label seeks firms that will add new products or channels to its current range, enhance earnings, and be either strategic or defensive in nature, says Mark Levy.
Joint-CEO Brett Levy says the group will not seek to expand outside of its current territories, which includes SA, India, Mexico and the UK.
Locally, Blue Label increased revenue 3% to R18.4 billion, while gross profit margin - a key indicator of performance as it increasingly acts as an agent for products - gained 0.5% to 5.69%.
Brett Levy says the group renewed its long-term exclusive contract with Vodacom, and electricity commissions gained 39% to R85 million. He expects prepaid electricity sales to continue growing as government rolls out more prepaid meters.
Its Indian venture, Oxigen, reported a profit for the first time since its establishment nine years ago. In Mexico, where it has a joint venture with bakery Grupo Bimbo, Blue Label's share of the loss as it rolls out its network came to R25 million.
Mark Levy says losses are expected to continue to the next 18 months as it rolls out point of sale devices. He adds that Grupo Bimbo is the world's largest bakery and has operations in 17 countries.
In the UK, Blue Label's 17.25% share of Ukash added R5 million in trading profit, a 119% gain.
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