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Trading statement for the six months ended 30 November 2016
Blue Label Telecoms Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/022679/06)
Share code: BLU ISIN: ZAE000109088
(“Blue Label” or “the Group”)
Trading statement for the six months ended 30 November 2016
Shareholders are advised that the basic, headline and core headline earnings per share for the six
months ended 30 November 2016 are expected to increase by more than 20% as against the six
months ended 30 November 2015. The table below illustrates the ranges anticipated against the
comparative period:
Earnings per share Earnings per share
Reported Range Cents Increase to Percentage
Nov 2015 Nov 2016 Nov 2016 Increase
Earnings per share 52.46c 80.79c - 82.89c 28.33c - 30.43c 54% - 58%
Headline earnings per share 53.26c 80.96c - 83.09c 27.70c - 29.83c 52% - 56%
Core headline earnings per share 54.60c 81.90c - 84.63c 27.30c - 30.03c 50% - 55%
The Group, through its wholly-owned subsidiary Gold Label Investments, holds an effective 58.18%
interest in Oxigen Services India (“Oxigen”). This investment has historically been accounted for as
an investment in an associate applying the equity method up to 30 November 2016.
The investment in Oxigen was initially of a long term nature as it was expected to emulate the
business model of the South African distribution operations. However, its profile has changed from
that of the traditional group business to one of generating growth in the market value of the
investment with a view to unlocking the Group’s share thereof. With the advent of its change in
focus to financial services through wallet subscription, it is no longer strategically aligned with the
other business units of the group and is unlikely to generate profitability in the short to medium
term. However, the market value of the company is expected to increase exponentially in
conjunction with its growth in wallet subscribers. This in turn creates the potential to unlock the
investment value in the future and the group is pursuing this new strategy with respect to its
investment in Oxigen.
Accordingly, Oxigen is now viewed as a venture capital investment, which in accordance with IAS 28
- Investment in Associates and Joint Ventures has been accounted for at fair value as at 30
November 2016. The differential between the carrying value of the investment and its fair value is
reflected as a gain on associate measured at fair value.
The fair value gain, less deferred taxation thereon and the Group’s share of losses in Oxigen for the
period under review, equated to a net increase of R135 million to Group earnings. On exclusion of
this net increase, core headline earnings per share would have ranged from between 62.25 cents
and 63.34 cents per share, equating to a growth of between 14% and 16%. This increase is
predominantly attributable to organic growth, underpinned by a hybrid of an expanded customer
base supported by an enhanced bouquet of products and services afforded to it.
The financial information on which this trading statement is based has not been reviewed or audited
by the Group’s auditors.
The results are scheduled for release on Tuesday, 28 February 2017.
Sandton
17 February 2017
Sponsor: Investec Bank Limited
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