Blu Label Unlimited Group (BLU) H2 2024 earnings summary

Executive summary

• Operating environment was challenging due to high interest rates, inflation, and record unemployment in South Africa, with significant loadshedding impacting both businesses and consumers.

• Load shedding affected operations for most of the year, but improved energy availability in the last quarter provided relief and a positive outlook.

• Continued investment in digital platforms and financial inclusion, focusing on underserved communities, SMEs, and a people-centric culture with leadership development.

• Emphasis on company culture, leadership, and diversity, with new cornerstone values established.

Financial highlights

• Revenue for the year ended May 2024 was ZAR 14.6 billion; gross revenue (including PINless top-ups and vouchers) rose 16% to ZAR 89.3 billion from ZAR 76.8 billion.

• 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 non-recurring and Cell C recapitalisation effects.

• EBITDA margin increased to 8.39% from 6.96% year-over-year; EBITDA declined 18% to ZAR 1.205 billion, mainly due to lower performance at CEC.

• 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.

• Board to reconsider dividends and/or share buybacks in the next year after meeting all debt obligations by September.

• Positive outlook for the remainder of the year due to improved energy availability and operational stability.

• Cell C's recapitalization program continues for another 4.5 years, with positive operating cash flow but no free cash flow expected in the near term.