Blu Label paid a final dividend of 10 cents for the full year to May 2026 even after posting a net loss of R4.8 billion after it restructured and separately listed mobile operator, Cell C.
The total dividend for the year amounts to R53.56 per share, while the board also plans to return capital to shareholders through a share repurchase programme that, however, remains conditional on market conditions.
Revenue for the period fell 7% to R13bn, with headline earnings per share falling 82% to about R45.50. A net loss of R5.6bn was included in the headline earnings adjustments for the year under review, mainly comprised of a net loss of R5.19bn relating to the group's investment in Cell C.
Impairments of goodwill of R201m, impairments to intangible assets and fixed assets of R116m, as well as a loss on disposal of assets of R29m and a loss on disposal of a subsidiary of R105m, were also accounted for in the HEPS.
Shares in Blu Label on the JSE fell 3.73% to R8.01 in afternoon trade after the release of the company’s financials on Wednesday.
The net loss relating to Cell C comprises a loss of R6bn recognised on the disposal of TPC's investment in Cell C and CEC following Cell C's listing at a market capitalisation of R9bn. This was partially offset by a gain of R841m on the remeasurement of the previously held interest on TPC's acquisition of control of Cell C in September last year.
“The defining milestone of the period was the successful restructuring and subsequent listing of Cell C. The transaction de-risked the group's exposure, reduced complexity and enhanced earnings visibility, while Blu Label's retained shareholding preserves strategic optionality,” said Blu Label's directors.
It added that the listing of Cell C introduces transparent market valuation, strengthened governance and independent access to capital, reinforcing its own role as a strategic shareholder focused on long-term value creation rather than providing operational support.
Blu Label was now positioning itself as an essential-services platform, with operations spanning distribution and payments, data intelligence, embedded financial services, and infrastructure and energy. In the year ahead, Blu Label will prioritise cash generation, preservation of balance sheet flexibility and execution of growth opportunities through disciplined capital allocation.
“Cell C has been restructured and separately listed, and now stands on an independent footing, with its own capital structure and a transparent market valuation. Blu Label commences the new financial year with materially reduced structural complexity and the board's attention directed towards growing its operating businesses rather than towards resolving legacy exposures,” it said.
Blu Label said its core prepaid distribution and payments operations remain resilient, with management focused on protecting its market-leading position, deepening client relationships and executing on revenue assurance capabilities. This includes municipal payment enablement at scale.
This comes as strategic investments for Blu Label shift from build-out to commercial execution, with Blu Energy progressing toward first contracted revenues on the back of an expanding municipal/commercial pipeline and project readiness.
Blu Energy has secured a multi-year energy trading licence from NERSA, enabling participation in South Africa's power sector reform. It is gearing to deliver renewable energy solutions across municipalities and independent power producers.
The NERSA licence positions Blu Label to “participate meaningfully in the reform of South Africa's electricity market and to supply renewable energy solutions to municipalities and independent power producers, thereby supporting the operational objectives and longer-term growth ambitions” of the business.
THE NATIONAL