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BLUE LABEL INTEGRATED ANNUAL REPORT 2016
Chairman’s report
continued
and Oxigen Services India totalling
13.66 cents per share. Core headline
earnings per share increased by 21%
to 102.85 cents. This growth was
predominantly achieved through the
increase in revenue by 19%, gross
profit by 11% and EBITDA by 15%.
Earnings per share increased by 20%
to 103.85 cents.
Capital and reserves accumulated to
R4.5 billion, net of accumulated
dividends paid to date totalling
R913 million, further solidifying
the foundation of Group resources.
The net asset value equated to
R6.62 per share.
The Board approved ordinary
dividend number 7 of 36 cents per
share, a 16% increase on the 31 cents
per share declared in 2015. This
equates to dividend cover of 2.73
times or a pay-out ratio of 35.9%
on HEPS.
The Group’s pipeline of corporate
action remains active. Criteria for
considering acquisitions is that they
enhance earnings, add to our
product line, distribution network or
geography, and are of a strategic or
defensive benefit.
On 5 October 2016 Blue Label
announced the finalised terms for
its proposed participation in the
recapitalisation of Cell C Proprietary
Limited, by subscribing for a 45%
shareholding in Cell C at a cost of
R5.5 billion. The Board is of the
opinion that the rationale for the
transaction is compelling, both from
an investment and commercial
perspective. The process to
completion of the transaction is
progressing positively. A general
meeting has been convened for
shareholders to consider the proposed
transaction on 16 November 2016.
The highlight of our CSI commitment
was the official opening in May 2016
of the Protea Glen Boys & Girls Clubs
of South Africa, offering after school
care and extramural activities to the
surrounding community. The Social,
Ethics and Transformation Committee
supported expenditure of R6.5 million
for upliftment projects for the year.
Looking ahead, the distribution of
prepaid electricity is expected to
continue to grow through
government programmes for the
rolling out of additional prepaid
electricity meters throughout South
Africa. New initiatives at Blue Label
Mexico, including the escalation of
distribution of starter packs, are
expected to result in further declines
in losses incurred by its aggressive
roll-out strategy. Oxigen Services India
continues to focus on expanding its
mobile wallet subscriber base,
supported by increased marketing
to the vast unbanked population in
India. This is expected to result in
compounding growth in both
transactional revenue and the intrinsic
value of the wallet subscriber base.
I thank my fellow Directors, the
management team led by Brett Levy
and Mark Levy, the senior
management team, all employees and
other stakeholders for their support
over the past year.
Larry Nestadt
Chairman
9 November 2016