Shares in Blue Label surge the most in five years on earnings forecast
The prepaid airtime, electricity and ticketing seller expects core headline earnings per share to jump as much as 69%
21 August 2024 - 17:54
by Mudiwa Gavaza
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Shares of Blue Label Telecoms shot up 14.5% on Wednesday, their biggest one-day gain since May 2020, as the prepaid group said it expected to report surging earnings for the full year to end-May.
The group, which specialises in selling prepaid airtime, electricity and ticketing, expects to report an increase in core headline earnings per share of up to 69%. This translates to 75.17c-76.99c, compared with the 49.55c reported in the previous year.
Core headline earnings for the period amounted to R679m, or 76.08c per share.
Excluding the positive contributions of R66m in the current year, and the negative contributions of R523m in the comparative year, primarily resulting from the recapitalisation of Cell C, the group said core headline earnings declined 34%, from R925m to R613m.
Of the group’s reported metrics, the biggest jump is expected in earnings per share, which may rise by up to 140%.
On exclusion of the positive and negative contributions from the current and comparative years, earnings per share and headline earnings per share declined 35% to 65.07c and 66.22c, respectively.
As Cell C’s largest shareholder, Blue Label completed the long-awaited recapitalisation of the troubled mobile company in September 2022. SA’s fourth-largest mobile network operator has struggled to make a profit since it opened in 2001.
It had been laden with long-term debt of R8.7bn, prompting Blue Label and Lesaka Technologies (formerly Net1), which previously had a 15% stake, to write down their combined R7.5bn investment to nil.
Four years after this writedown, Blue Label said in February it had revalued the Cell C investment on its books to R962.5m.
Blue Label, valued at R4.6bn, is taking control of Cell C by increasing its 49.53% stake to about 53%, with requisite applications having been made to SA’s telecom regulator.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Shares in Blue Label surge the most in five years on earnings forecast
The prepaid airtime, electricity and ticketing seller expects core headline earnings per share to jump as much as 69%
Shares of Blue Label Telecoms shot up 14.5% on Wednesday, their biggest one-day gain since May 2020, as the prepaid group said it expected to report surging earnings for the full year to end-May.
The group, which specialises in selling prepaid airtime, electricity and ticketing, expects to report an increase in core headline earnings per share of up to 69%. This translates to 75.17c-76.99c, compared with the 49.55c reported in the previous year.
Core headline earnings for the period amounted to R679m, or 76.08c per share.
Excluding the positive contributions of R66m in the current year, and the negative contributions of R523m in the comparative year, primarily resulting from the recapitalisation of Cell C, the group said core headline earnings declined 34%, from R925m to R613m.
Of the group’s reported metrics, the biggest jump is expected in earnings per share, which may rise by up to 140%.
On exclusion of the positive and negative contributions from the current and comparative years, earnings per share and headline earnings per share declined 35% to 65.07c and 66.22c, respectively.
As Cell C’s largest shareholder, Blue Label completed the long-awaited recapitalisation of the troubled mobile company in September 2022. SA’s fourth-largest mobile network operator has struggled to make a profit since it opened in 2001.
It had been laden with long-term debt of R8.7bn, prompting Blue Label and Lesaka Technologies (formerly Net1), which previously had a 15% stake, to write down their combined R7.5bn investment to nil.
Four years after this writedown, Blue Label said in February it had revalued the Cell C investment on its books to R962.5m.
Blue Label, valued at R4.6bn, is taking control of Cell C by increasing its 49.53% stake to about 53%, with requisite applications having been made to SA’s telecom regulator.
The stock is up 30% so far in 2024.
gavazam@businesslive.co.za
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