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Blue Label Telecoms continues to deliver strong growth

22 February 2011

Johannesburg, 22 February 2011: Blue Label Telecoms today announced interim results for the half year ended 30 November 2010.

Joint Blue Label CEO's Brett and Mark Levy said: "In a period in which Blue Label rationalised businesses, contained expenditure and maximised the benefits of healthy cash reserves, the group continued to achieve strong growth in net profit after tax and core profitability."

Financial highlights were:

  • 8% increase in revenue to R9,07 billion
  • 9% increase in net profit after tax to R193 million
  • 7% increase in core earnings per share to 27,27 cents
  • The growth in net profit after tax and in core earnings was 14% and 11% respectively after stripping out Secondary Tax on Companies on the maiden dividend declared in August 2010.


Turnarounds in Oxigen India, the Datacel Group and Ukash, were other contributing factors to the growth in profitability.

The performance of Africa Prepaid Services Nigeria (APSN) (36.72% held) was adversely impacted by negative consumer sentiment in respect of the Multi-Links product, and the uncertainty of the network's future. On 26 November 2010 Blue Label announced the cancellation of APSN's contract with Multi-Links arising from Multi-Link's repudiation of its obligations under the contract.

The Levy's re-affirmed Blue Label's positioning in Nigeria, saying: "The strategy of APSN continues to be one of growing the distribution of virtual prepaid products and services. This means that APSN will aggressively distribute airtime and starter packs on behalf of all the other networks, as well as introduce value added services and products into its distribution network, supported by a rollout of intelligent point of sale devices. "

Working capital was managed efficiently. The procurement of inventory was maximised, additional credit was extended to selected long standing channels of distribution and the group capitalised on bulk purchasing and settlement discounts .

Looking ahead, the Levys' believe that increasing Blue Label's revenue growth and gross profit margins are the group's short and medium term objectives, whilst simultaneously focusing on expanding its product range and distribution network, organically and through acquisition, both locally and internationally.

Blue Label is in the process of providing its vast client base with Vodacom's M-PESA mechanism of money transfer and other ancillary services. This will enable the consumer to pay for all of the value added services that Blue Label offers to the end user through M-PESA .

The strategic partnership with ubank will combine their banking capabilities with Blue Label's technology platforms, products and services in a unique proposition to ubank's customers.

Prepaid electricity commissions earned are expected to increase as more municipalities offer prepaid electricity options to their customers and additional distribution contracts are concluded with municipalities across South Africa.

Brett and Mark Levy concluded: "Following our consolidation and rationalisation, the businesses have emerged strengthened and with depth, which will hold them in good stead for the years ahead."

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