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Blue Financial Services Limited posted “a strong set of results” for the financial year ended February 29 2012 on Thursday‚ with a net profit for the year of R42.28 million‚ compared to a net loss of R284.9 million in 2011.

“The results demonstrate that the group is well positioned to raise capital to fund future expansion in Africa‚” the company said.

Blue’s operating profits were up by 105% to R12.8 million while it maintained “tight control” over expenditure‚ resulting in a 31% decrease in operating costs.

Earnings per share were 0.7 cents‚ compared to a loss per share of 29.6 cents in 2011.

From a headline loss per share in 2011 of 27.8 cents‚ the company reported headline earnings per share of 0.7 cents.

The company announced a 40% growth in its loan book‚ from R544.6 million in 2011 to R770.5 million‚ while it had a “very low” new-loan impairment rate of 2.8%.

“The good results and strong balance sheet put the financial services group in an excellent position to make a difference across all its operating entities‚ and to service the needs of our customers even better‚” Blue Financial Services CEO Johan Meiring said.

“There is considerable interest in our products across all our African markets and we recognise the opportunity to grow our business in these countries‚” Meiring said.

The period under review saw the company achieve “significant milestones”‚ effectively drawing a line below the turnaround strategy and enabling the company to focus on future growth‚ he said.

“The company’s emergence from the turnaround comes 18 months ahead of our original turnaround schedule‚ which is a good outcome for us. We are grateful for the support‚ confidence and patience that our stakeholders and specifically our customers have shown in the new Blue‚” Meiring said.

The successful turnaround to the company’s strategic focus was attributed to lending to its extensive operations into Africa‚ rather than the South African unsecured market‚ where Meiring said an asset bubble in unsecured lending may occur unless prudent risk management was followed.

“Operationally‚ Blue has improved its internal control environment immeasurably. We’ve deployed the latest technology and focused on our collection practices – where we think we are among the leaders in the industry‚” he added.

“We’ve put in the hard work and had to make some tough decisions to right the ship‚” Meiring said‚ adding that Africa was a “fiercely competitive” market.

“But‚ I am confident that we are now in a much stronger position. And‚ using our local experience‚ expertise and knowledge‚ we can grow this company in a prudent and consistent manner. Our flexibility across Africa is also a strategic advantage and we’ll leverage key markets at key times‚” Meiring concluded. - I-Net Bridge