The distribution company which released its results on Wednesday, reported a 13% increase in revenue to a record R18bn. The company’s top line is comprised of sales of physical and virtual prepaid airtime, commissions on the distribution of prepaid electricity, and compounded annuity revenue generated from airtime starter packs.
But after having pulled out from its operations in Nigeria, following a clash with a former Telkom subsidiary Multi-Links, the company had to report a 5% decline in diluted headline earnings per share to 45.75c.
Whilst no dates have been confirmed as to when the litigation process between Multi-Links and Blue Label will be concluded, the joint CEOs of the telecoms, cum distribution company, who are also brothers Brett and Mark Levy maintain that legal battle has in no way had a negative impact on their relationship with Telkom.
“Following the Nigerian saga, Mark and I both went to see Pinky (Nombulelo Moholi, the CEO of Telkom) has discovered that we are of the same mind set,” said Brett Levy.
In fact both brothers maintain that their partnership with Telkom and its new mobile venture 8-ta will be vital to the latter attaining success in the industry. Blue Label currently distributes prepaid vouchers for Telkom and is also working on aiding 8-ta with its supply of airtime vouchers to its distributors in the country.
The Nigerian lawsuit has not affected the company’s outlook on its operations outside of South Africa.
“A lot of consideration was taken with regard to our exit strategy in Nigeria, but we have managed to redeploy some of our resources in that area to some of the other countries in which we have operations,” said Mark Levy.
Blue Label appears to be making headway in its Indian and Mexican operations which is in line with its strategy of having 50% of its revenue being generated from its non-South African operations.
It’s managed to increase its shareholding in India from 37.22% to 55.83% with the remaining stake held by local government post year end. It’s also highlighted Mexico as one of its “most promising businesses”.
It’s struck a partnership deal with Groupo Bimbo – a bakery and confectionary company that has a large footprint in both the Americas and Asia and its hoping to optimise on this to increase its airtime distribution network.
“Essentially we are working towards a world where ‘there is bread, there will be airtime’,” said Brett Levy.
The company will be using these points of sale where the simple staple is available to make purchasing airtime as easy as acquiring a loaf of bread.
The company’s shareholders may be delighted by these advancements as the company declared a dividend of 14c per share for this year end.
The IT player says it “will continue to focus on expanding its product range offering and distribution network, organically and through acquisition, both locally and internationally”.