An improvement in gross profit margins and a reduction in the number of shares in issue have helped JSE-listed Blue Label Telecoms lift normalised headline earnings per share by 26% in the six months ended 30 November 2012.
Normalised headline earnings — stripping out the effect of a once-off receipt in 2011 — rose by 10% to R230m.
The improvement in profitability comes on the back of a 2% increase in revenue to R9,3bn for the six-month period.
Blue Label says the improvement in headline earnings per share was achieved through the growth in revenue, a 9% increase in gross profit, a gross profit margin that rose to 6,8% and a reduction in the number of shares in issue flowing from the purchase of Microsoft’s 12% stake in the group in December 2011.
The South African business contributed 98% to profit; the group’s Mexican and Indian subsidiaries are in expansion mode and still loss-making. In Mexico, its joint venture with bakery group Grupo Bimbo is rolling out 6 000 point-of-sale terminals a month. In India, subsidiary Oxigen Services is is continuing its drive into banking services in partnership with financial institutions in the populous Asian nation.
In South Africa, the airtime business is adding 450 000 new connections per month. The group on Wednesday said it would broaden its distribution base in South Africa with a new, cheaper point-of-sale terminal that will allow it to expand into smaller merchants. “We can now target a customer than does only R1 000/month in our products and is profitable for us.”
In fact, gross margins in this segment are expected to be higher than in bigger retailers, in part because the terminals will not be provided free of charge to merchants.
Commission from the sale of prepaid electricity rose by 29% over the year-ago period, growing from R41m to R53m. — (c) 2013 NewsCentral Media