Blu Label Unlimited Group, previously Blue Label Telecoms, expects headline earnings per share for the year to 31 May 2026 to fall by more than 80%, and to report a loss at the earnings per share level, as the accounting consequences of Cell C’s separation and listing work through its books.
In a trading statement published on Friday morning, the group said Heps would come in at between 79.02c and 88.14c, down 81-83% from 455.96c in FY2025. Core Heps is expected between 83.58c and 92.82c, a decline of 80-82% from 461.63c. EPS swings from a profit of 276.52c to a loss of between 536.96c and 542.50c, a deterioration of more than 100%.
The group, which is led by co-CEOs Brett and Mark Levy, was at pains on Friday to point out that this is not a trading story. Both the reporting period and the comparative period were, it said, materially affected by the Cell C restructuring transactions, the outcome of the listing and the resulting accounting consequences under IFRS accounting standards.
That is consistent with what Blu Label told shareholders at its interim results for the six months to 30 November 2025, when it warned that the non-operational accounting effects of the restructuring would continue to weigh on reported earnings for the full year. So, Friday’s statement is a confirmation rather than a surprise.
Blu Label has again put forward a pro forma view of the business. Stripping out Cell C and Comm Equipment Company, all extraneous items relating to the restructuring transactions and the Cell C listing, and the loss on disposals and impairments, it said it would have reported revenue of R9.4-billion, gross income of R2.56-billion, Ebitda of R923-million and net profit after tax of R677-million. Core headline earnings on that basis would have been R681-million, or core headline earnings per share (Heps) of 75.33c.
Softer second half
The group described these metrics as a more meaningful indication of its underlying operational performance and earnings base going forward. However, the pro forma core Heps of 75.33c is lower than the reported core Heps range of 83.58c to 92.82c. Because the pro forma calculation removes Cell C and Comm Equipment Company entirely, the implication is that both were contributing to core headline earnings over the months they sat inside the group. The adjusted figure is a smaller number than the one it replaces, not a larger one.
The pro forma disclosures also point to a softer second half, due in part to certain one-offs. At the interims, Blu Label put pro forma revenue at R5-billion, earnings before interest, tax, depreciation and amortisation at R535-million, net profit after tax at R389-million and core Heps at 44.19c for the six months to November. Against the full-year figures, that leaves roughly R4.4-billion of revenue, R388-million of Ebitda, R288-million of net profit and about 31c of core Heps for the second six months – weaker on every line.
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Blu Label continues to flag an imputed gross revenue figure alongside its reported revenue – R99.9-billion for the year, on the basis that only the gross profit earned on Pin-less top-ups, prepaid electricity, ticketing and universal vouchers is recognised as revenue. It is a measure of throughput rather than revenue under IFRS accounting rules, and is not comparable with the R9.4-billion pro forma revenue line.
The Prepaid Company, Blu Label’s wholly owned subsidiary, obtained Competition Commission approval on 3 September 2025 to acquire control of Cell C, which became a subsidiary from that date. At the end of November, alongside the listing of Cell C on the JSE, The Prepaid Company disposed of a 50.45% shareholding and sold Comm Equipment Company to Cell C. Blu Label relinquished control while retaining a 49.47% interest, and Cell C ceased to be consolidated.
Both of those events fall inside FY2026, which is why the reported numbers are so distorted. Blu Label took control of Cell C in September, consolidated it for roughly three months, booked a gain of R841-million on the remeasurement of its previously held interest, and then lost control again at the end of November.
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The year therefore contains a partial consolidation, a substantial one-off gain and the losses on disposal that accompanied the separation. FY2026 is the first set of full-year figures that begins to show what the group looks like without the mobile operator inside it, and the reported earnings line is the least useful place to look for it.
Blu Label shares were up 0.98% at R8.28 by 10.04am on Friday, shortly after the statement was released, suggesting the market had already priced in the accounting distortion. Full results are due on Sens on 26 August. – © 2026 NewsCentral Media
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