Despite the R5.5bn it is paying for 45% of Cell C, Blue Label Telecoms has sufficient cash to pay its shareholders a 40c dividend.

Revenue for the year to end-May remained flat at R26bn while aftertax profit grew 12% to R821m, Blue Label said in its results released on Thursday morning.

It raised its dividend by 11% from the prior year’s 36c.

Blue Label does not pay an interim dividend.

Blue Label said the reason its revenue did not grow was mainly due to the way it accounts for a consumer shift in mobile airtime prepaid purchases to "PINless top-ups".

"Only the gross profit earned thereon is accounted for in group revenue, as opposed to the gross amount generated from transactions of this nature. On imputing such amounts, the effective growth would have equated to 7%," the results statement said.

It managed to grow profit despite losses contributed by its subsidiaries outside SA.

Oxigen Services India contributed a R120m loss, Blue Label Mexico a R37m loss, and 2DFine Holdings Mauritius a R5.4m loss.

"Although Blue Label Mexico incurred losses, its losses continued to decline, with the group’s share thereof reducing by 42%, from R63m to R37m," Blue Label said.

The group said it expected its Mexican business to contribute a profit in the reporting period underway.

Subsequent to the reporting period, on August 2, Blue Label’s subsidiary The Prepaid Company concluded its deal to acquire 45% of Cell C.

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