BLUE LABEL TELECOMS LIMITED Unaudited Results
for the half year ended 30 November 2015
HIGHLIGHTS
20% to
30
R620 million Increase in headline earnings per share of 25% to 53.26 centsBLUE LABEL UNAUDITED RESULTS FOR THE HALF YEAR ENDED 30 NOVEMBER 2015
Increase in headline earnings of 25% to R355 million Increase in cash and cash equivalents by R694 million to R1.5 billionCommenTary
In spite of a challenging economic environment, the Group delivered an encouraging performance for the six months ended 30 November 2015, resulting in growth in headline earnings per share of 25% to 53.26 cents.
These results were achieved through increases in revenue of 25%, gross profit of 17% and EBITDA of 20%. This performance was attributable to organic growth, underpinned by an expanding distribution channel and in turn a growth in market share.
On the international front, the Group's share of losses in Blue Label Mexico (BLM) declined by 28%, albeit equating to a share of losses of R32.5 million. This impacted negatively on headline earnings per share by 4.88 cents. Oxigen Services India has remained profitable from year-end, focusing on expanding a valuable mobile wallet subscriber base.
The statement of financial position remains robust and liquid with accumulated equity increasing to R4.1 billion, net of accumulated dividends paid to date totalling R913 million. Net asset value equated to R6.03 per share.
SEGMENTAL REPORT South African DistributionUnaudited 30 November
2014
R'000
Growth
R'000 Growth
Audited 31 May
2015
R'000
Revenue 12 634 322 10 157 038 2 477 284 24% 21 657 891
Gross profit 795 245 696 195 99 050 14% 1 444 730
EBITDA 577 586 507 718 69 868 14% 1 038 252
Core net profit 391 138 347 668 43 470 13% 684 756
Gross profit margin 6.29% 6.85% 6.67%
EBITDA margin 4.57% 5.00% 4.79%
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Growth in revenue of 24% was organically achieved through increased sales by expanding distribution channels. Revenue generated on "PINless top-ups" increased by R641 million from R1.2 billion to R1.8 billion, equating to effective growth in South African Distribution revenue of 27%, in that only the commission earned thereon is recognised.
BLUE LABEL UNAUDITED RESULTS FOR THE HALF YEAR ENDED 30 NOVEMBER 2015
Net commissions earned on the distribution of prepaid electricity continued to increase, escalating by R16 million to R95 million (20%) on turnover of R6 billion generated on behalf of the utilities.
Although there was a contraction in gross profit margins, gross profit increased by R99 million (14%) to R795 million. This was congruent with the growth in revenue generated.
The resultant growth in EBITDA of 14% to R578 million equated to an EBITDA margin of 4.57%. Core net profit increased by R43 million to R391 million (13%).
International DistributionUnaudited 30 November 2015 R'000 | Unaudited 30 November 2014 R'000 | Growth R'000 | Growth | Audited 31 May 2015 R'000 | |
EBITDA Share of (losses)/profits from associates and joint ventures | 23 595 (33 659) | (4 511) (42 128) | 28 106 8 469 | 623% 20% | 35 379 (81 269) |
- Ukash | - | 7 379 | (7 379) | (100%) | 12 004 |
- Oxigen Services India | 2 813 | (666) | 3 479 | 522% | 2 619 |
- Blue Label Mexico | (32 499) | (45 194) | 12 695 | 28% | (88 508) |
- Other | (3 973) | (3 647) | (326) | (9%) | (7 384) |
Core net loss | (11 867) | (44 013) | 32 146 | 73% | (54 646) |
- Equity holders of the parent | (11 825) | (39 666) | 27 841 | 70% | (46 958) |
- Non-controlling interests | (42) | (4 347) | 4 305 | 99% | (7 688) |
Of the increase in EBITDA by R28 million, R9 million was attributable to the cessation of expenditure in Africa Prepaid Services Nigeria and R19 million to foreign exchange gains on loans owing by foreign Group companies.
CommenTary (ConTInued)
The share of net losses from associates and joint ventures comprised the following:
UkashThe share of profits in Ukash ceased in March 2015 as the Group disposed of its interest therein.
Oxigen Services IndiaThere was a turnaround from the Group's share of losses of R0.7 million in the comparative period to a share of profits of R2.8 million, after the amortisation of intangible assets.
The company is focused on increasing its wallet subscriber base, thereby creating value per subscriber simultaneously with the generation of transaction fees emanating from a multitude of transactional offerings. A continuous growth in the wallet subscriber base will in turn result in increased revenue from the various initiatives that the company has developed in this regard. These include domestic and international remittances, e-Commerce transactions, a loyalty wallet, chat applications and gift cards as well as augmenting its existing bouquet of prepaid tokens of value.
Daily money transfer deposits have grown from USD2.7 million per day as at 30 November 2014 to USD3.6 million per day as at 30 November 2015, increasing through its connectivity with the National Payment Corporation of India.
Blue Label MexicoBLM's losses declined from R95 million to R67 million, of which the Group's share was R32.5 million after the amortisation of intangible assets.
The decline in losses was attributable to increases in revenue by 27% underpinned by higher gross profit margins. This was as a result of the company becoming a multicarrier distributor as opposed to historically being confined to one network. This has created a more competitive environment amongst the networks to the benefit of the company. Focus on cost efficiencies resulted in a decline in operational expenditure by 5%.
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The above initiatives, together with the introduction of starter packs that generate monthly compounded annuity income, are expected to result in further declines in losses for the balance of the financial year.
Mobile | |||||
Unaudited | Unaudited | ||||
30 November | 30 November | Audited | |||
2015 | 2014 | Growth | 31 May 2015 | ||
R'000 | R'000 | R'000 | Growth | R'000 | |
Revenue | 137 730 | 95 248 | 42 482 | 45% | 240 168 |
Gross profit | 85 520 | 61 138 | 24 382 | 40% | 136 773 |
EBITDA | 39 441 | 20 241 | 19 200 | 95% | 51 359 |
Core net profit | 20 916 | 11 951 | 8 965 | 75% | 28 559 |
BLUE LABEL UNAUDITED RESULTS FOR THE HALF YEAR ENDED 30 NOVEMBER 2015
Viamedia, a mobile content and value-added services provider, was the predominant contributor to growth in revenue and profitability in this segment.
At core net profit level, positive contributions to growth by Viamedia of R7.8 million and Cellfind, Panacea Mobile and Simigenix of R2.7 million were partially negated by no contribution to profitability in the current period by Blue Label Engage as a result of its disposal in December 2014.
Solutions | |||||
Unaudited | Unaudited | ||||
30 November | 30 November | Audited | |||
2015 | 2014 | Growth | 31 May 2015 | ||
R'000 | R'000 | R'000 | Growth | R'000 | |
Revenue | 103 222 | 75 106 | 28 116 | 37% | 146 163 |
Gross profit | 37 872 | 30 451 | 7 421 | 24% | 62 837 |
EBITDA | 18 975 | 18 122 | 853 | 5% | 40 831 |
Core net profit | 6 808 | 7 770 | (962) | (12%) | 23 975 |
In October 2015 Velociti was disposed of at a loss of R5.4 million. On exclusion of this capital loss, core net profit increased from R7.8 million to R12.2 million (55%). This growth was entirely attributable to the contribution by Blue Label Data Solutions which generated revenue of R71 million and a growth of 43% from R14 million to R21 million at EBITDA level.
Blue Label Telecoms Ltd. issued this content on 24 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 24 February 2016 07:32:27 UTC
Original Document: http://www.bluelabeltelecoms.co.za/pdf/sens/2016/unaudited-results-2015-24022016.pdf
