Blu Label Unlimited Group (BLU) H2 2024 earnings summary

Executive summary

• The operating environment was challenging due to high interest rates, inflation, record unemployment, and significant load shedding, though energy supply improved in the last quarter.

• Strategy focused on digital platform investment, financial inclusion, and expanding digital payment solutions for underserved communities and SMEs, with a strong emphasis on company culture, leadership, and values.

Financial highlights

• Revenue for the year ended May 2024 was ZAR 14.6 billion; gross revenue (including pinless top-ups, prepaid electricity, ticketing, and universal vouchers) rose 16% to ZAR 89.3 billion year-over-year.

• Gross profit decreased 5% to ZAR 3.3 billion, but gross profit margin improved to 22.57% from 18.41% year-over-year.

• Core headline earnings per share declined 34% to ZAR 0.6866, excluding Cell C recapitalisation effects.

• EBITDA margin increased to 8.39% from 6.96% year-over-year.

• Cash and cash equivalents at year-end were ZAR 896 million, down from ZAR 1.3 billion, reflecting significant cash outflows.

Outlook and guidance

• Focus remains on execution, leveraging data insights, and IT architecture development, with a positive outlook due to improved energy availability and operational stability.

• Cell C aims to leverage network parity, invest in digital platforms, and roll out new retail stores, with continued operational intensity and people-focused initiatives.

• Free cash flow for Cell C expected to remain negative for several years due to ongoing recapitalization, with positive operating cash flow used to cover recap requirements.