JSE-listed Blue Label Telecoms, rebranding to Blu Label Unlimited to amplify the market’s focus on its units as it spins Cell C out via a JSE listing, has admitted it failed in its initial execution of its purchase of Cell C.
The company said yesterday it is reaping the benefits of its Cell C stake, which helped push headline earnings per share up 519.17% for the year to May. Joint-CEO Mark Levy told a media call that it is committed to listing the operator to ensure its long-term strength.
Cell C reported a return to net profit and broad-based growth across the business for the year to May, posting a profit before tax of R280 million – a swing of over 200% from the prior year’s R9 million.
The operator’s CEO, Jorge Mendes, said in a statement: “This year’s results prove that Cell C is back in profit and with momentum. We have reshaped our business, secured growth in wholesale, broadband and postpaid, and strengthened our brand and customer experience.”
Levy says Mendes is an executor, turning Cell C into an asset, as it was on the brink of failure. This comes as the mobile company’s worth is more than the R0 it was in 2017, although this figure is not separately disclosed in Blue Label’s balance sheet.
“The combination of topline growth, stronger margins and disciplined cost management sets us apart in the market. Our transformation is building the right foundations to accelerate growth,” says Mendes, in a statement that concurs with that of Levy’s.
Levy tells ITWeb that the company bought Cell C for “all the right reasons” because a telco is a “phenomenal asset” with key spectrum.
He notes that the initial R5.5 billion invested in 2017 was the right figure, but execution issues prevented the company from realising its aspirations. “You know that old adage: it's not good horses or bad horses, it's bad jockeys. And I think we failed on the jockey side.
“For the first time in Cell C’s life, [Mendes] is on the right trajectory… Jorge must do his magic,” Levy says, referring to the balance sheet.
With a current shareholding of 49.5%, Blue Label is seeking final regulatory approval to acquire an additional 4.04% stake, which would take ownership to 53.5%, giving it control and enabling an exit via a listing.
Levy says the potential initial public offerings of Cell C shares will allow the operator to repay what it owes Blue Label, giving it cash to pay dividends, grow, or further develop its structure. Several previous CEOs have unsuccessfully tried to list the company.
When Cell C defaulted on loans worth around R7.3 billion in 2020, Blue Label pumped more than R1 billion into the operator, with much of the remaining debt restructured. As of May 2025, its exposure to the operator is R3.1 billion, although it has made provision for loss allowances.
“You're going to eradicate your debt, get cash flow, and have a new persona for Blue Label, which is true to what we were. We were a fintech distribution company,” Levy tells ITWeb. “The end result is pretty: two listed companies, no debts, with cash flow to do stuff with.”
As part of its rebranding to Blu Label Unlimited, currently taking place at its Sandton headquarters, with a reveal set for 3 September, the company is reorganising subsidiaries into a clearer structure, helping investors to better understand its operations.
Levy said during the results webcast that market confusion over the scope of its offerings and capabilities made it necessary to “showcase” the full breadth and connectivity of the Blu Label Unlimited ecosystem.
The group is restructuring its operations into seven ‘buckets of solutions’ that combine physical and virtual distribution capabilities with an integrated digital ecosystem. These are:
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