Blue Label continues on strong growth path with 21% increase in HEPS

19 August 2015
Increase in revenue of 14% to R22 billion
Increase in gross profit of 22% to R1.64 billion
Increase in gross profit margins from 6.96% to 7.46%
Increase in EBITDA of 37% to R1.08 billion
Increase in headline earnings per share of 21% to 82.26 cents
Increase in headline earnings per share of 21% to 82.26 cents
Increase in dividend declared of 15% to 31 cents per share

Blue Label Telecoms continues on its strong growth path, announcing a 21% increase in headline earnings per share for the year ended 31 May 2015, on a revenue increase of 14% over the period to R22 billion.

According to Brett Levy and Mark Levy, joint CEO’s at Blue Label Telecoms, the results were driven by expanded offerings, additional distribution channels, as well as growth from acquisitions.

South African Distribution Segment
Growth drivers for the Group’s largest segment - SA Distribution – included managing the last mile of the distribution channel, distribution on behalf of networks and utilities, airtime sales for data consumption, acquisitions and new product lines.

Prepaid airtime, data and starter packs
During the period, the segment distributed an increasing number of products and services, in particular data. “We also are opening 46 Edgars Connect stand-alone stores, with 100 stores planned by the end of the year and 400 over the next twenty-four months,” says Brett Levy.

Prepaid Electricity
Exponential growth continued in the prepaid electricity space with increasing numbers of distributor contracts, installations of prepaid residential meters, advancements in technology and electrification of government housing developments. Net commissions earned on the distribution of prepaid electricity increased by R31 million to R165 million (23%) on revenue of R10.4 billion generated on behalf of the utilities.

The introduction of prepaid water tokens is garnering interest from municipalities, water boards, equipment suppliers, township developers and closed communities.

Brett Levy says the focus for the period was on gaining brand recognition and growing market share for Ticketpro, the second largest ticketing engine in South Africa. As a result, ticket sales volumes were up 26%. Important distribution partners gained were the Ticketpro Dome and Nasrec show grounds, home of the Rand Show and Lifestyle Show.

International Segment
Oxigen Services India
There was a turnaround in the Group’s share of losses of R3.3 million in the comparative year to a share of profits equating to R2.6 million in the current year, after the amortisation of intangible assets. This positive turnaround was attributable to increases in revenue by 15% and gross profit by 21%, reported in their local currency.

“The benefits of Oxigen Services India’s defined strategy of becoming India’s first non-banked mobile wallet that empowers the unbanked masses to instantly transfer and receive cash across the entire country continues to gain momentum,” says Mark Levy. “This has been primarily due to the focus on money transfer services without detracting from its traditional airtime sales.”

Daily money transfer deposits have increased from USD2.3 million per day as at 31 May 2014 to USD3.3 million per day as at 31 May 2015, increasing exponentially through its connectivity with the National Payment Corporation of India.

Blue Label Mexico
In spite of revenue increasing by 23%, further losses were attributable to the initial impact of a strategic decision to become a multi-carrier for all the networks, as well as an increase in overheads, necessitated for enhanced post sale customer support and the fortification of systems.