Johannesburg - Additional offerings and new channels to push them through aided Blue Label in recording a 21 percent increase in headline earnings per share for the year to June.
The company, which provides prepaid vouchers for items such as electricity and cellular minutes, notes revenue gained 14% to R22 billion. Headline earnings per share gained to 82.26 cents, which excludes the company’s share of losses of R85 million in Blue Label Mexico, which equates to 12.82 cents per share. The rest of its units contributed 95.08 cents to headline earnings per share.
Blue Label, which is listed on the JSE and celebrated its 10th birthday in June 2011, says the gains in headline earnings was achieved through organic growth in the South African distribution segment, assisted by the acquisitions of Retail Mobile Credit Specialists (RMCS) and Viamedia.
Blue Label bought RMCS for R306.6 million in December 2013 and followed that deal with the August 2014 purchase of 75 % of Viamedia for R144.4 million initially. Blue Label was also set to pay as much as another R103.1 if Viamedia met certain targets.
Joint CEOs Brett and Mark Levy also attribute the company’s gains to expanded offerings, additional distribution channels, as well as growth from acquisitions.
During the year, the South African distribution unit enhanced its bouquet of products to include mobile handsets and tablets. “This initiative is expected to gain significant momentum going forward.”
Locally, the prepaid airtime, data and starter packs unit 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.
Towards the end of the financial year, Blue Label and Edcon agreed to enter an initiative that saw a company being formed to establish stand-alone retail outlets under the brand “Edgars Connect”. “This will create an ideal platform for Blue Label Telecoms to implement its strategy of marketing its products and services on a retail basis.”
Its local prepaid electricity unit saw “exponential” growth as it added more distributor contracts, and benefited from the installation 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 on revenue of R10.4 billion, which was generated on behalf of the utilities.
Blue Label adds the introduction of prepaid water tokens is garnering interest from municipalities, water boards, equipment suppliers, township developers and closed communities. The company is hopeful this move will further expand its prepaid utility service.
Its ticketing unit spent the period focusing on gaining brand recognition and growing market share for Ticketpro,says Brett Levy. This led to ticket volumes gaining 26% and it added distribution partners such as the Ticketpro Dome and Nasrec show grounds.
Internationally, Oxigen Services India turned around, reversing a loss of R3.3 million into a profit of R2.6 million. However, Blue Label Mexico - which grew revenue 23% - continued to run at a loss as the company has been accelerating the roll out phase of the business. It says the additional losses were caused by the unit’s strategic decision to become a multi-carrier for all the networks, as well as an increase in overheads, which it needed to enhance post sale customer support and to fortify of systems.
Last year, Blue Label Mexico incurred losses of R131 million, R61 million of which were attributable to Blue Label.
Blue Label adds its “distribution footprint is perfectly positioned to offer a money transfer solution that will provide reach across all sectors of the South African economic landscape”.
IOL