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BLUE LABEL TELECOMS LIMITED - Unaudited results for the half year ended 30 November 2018

Release Date: 28/02/2019 08:45
Code(s): BLU     PDF:  
 
Wrap Text
Unaudited results for the half year ended 30 November 2018

Blue Label Telecoms Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/022679/06)
JSE Share code: BLU ISIN: ZAE000109088
("Blue Label" or "BLT" or "the Company" or "the Group")


Unaudited results for the half year  ended 30 November 2018


HIGHLIGHTS

REVENUE OF
R12.3 billion#

INCREASE IN GROSS PROFIT 
OF 15% TO
R1.31 billion

INCREASE IN GROSS PROFIT 
MARGIN FROM 8.37% TO
10.63%

CORE HEADLINE LOSS OF 
11.39cents 
per share##
 
#  On inclusion of the gross amount generated on "PINless top-ups", prepaid electricity and ticketing the effective
   increase equated to 7%.
## On exclusion of the financial results of Cell C and the negative impact of the SPV adjustments, core headline
   earnings per share from the balance of the entities within the Blue Label Group equated to 55.13 cents per share.

Group
                                                                  SPVs          Remaining
                                   Group        Cell C      adjustment           entities            Group    
                                November      November        November           November         November     
                                    2018          2018            2018               2018             2017     
Unaudited                          R'000         R'000           R'000              R'000            R'000    
Revenue                       12 301 717             -               -         12 301 717       13 633 442    
Gross profit                   1 307 990             -               -          1 307 990        1 141 247    
EBITDA                           379 168             -        (492 640)           871 808          768 475    
Share of (losses)/profits 
from associates and joint 
ventures                        (138 038)     (133 465)              -             (4 573)         940 425    
- Cell C                        (133 465)     (133 465)              -                  -          924 194    
- Blue Label Mexico              (13 002)            -               -            (13 002)         (10 511)   
- Other                            8 429             -               -              8 429           26 742    
Net (loss)/profit               (116 532)     (133 465)       (492 640)           509 573        1 350 261    
Core net (loss)/profit           (82 874)     (128 277)       (492 640)           538 043        1 364 248    
Core headline earnings          (105 394)     (123 056)       (492 640)           510 302        1 358 229    
Gross profit margin               10.63%                                           10.63%            8.37%    
EBITDA margin                      3.08%                                            7.09%            5.64%    
Weighted average shares      925 687 772                                      925 687 772      805 590 826    
EPS (cents)                       (12.59)                                           55.05           167.61    
HEPS (cents)                      (15.02)                                           52.05           166.86    
Core HEPS (cents)                 (11.39)                                           55.13           168.60    

Group
                                                     Remaining
                                  Cell C              entities              Growth              Growth     
                                November              November           remaining           remaining     
                                    2017                  2017            entities            entities     
Unaudited                          R'000                 R'000               R'000                   %    
Revenue                                -            13 633 442          (1 331 725)               (10%)   
Gross profit                           -             1 141 247             166 743                 15%    
EBITDA                                 -               768 475             103 333                 13%    
Share of (losses)/profits                                                                 
from associates and joint                                                                 
ventures                         924 194                16 231             (20 804)              (128%)   
- Cell C                         924 194                     -                   -                        
- Blue Label Mexico                    -               (10 511)             (2 491)                24%    
- Other                                -                26 742             (18 313)               (68%)   
Net (loss)/profit                924 194               426 067              83 506                 20%    
Core net (loss)/profit           927 643               436 605             101 438                 23%    
Core headline earnings           927 643               430 586              79 716                 19%    
Gross profit margin                    -                 8.37%                                            
EBITDA margin                          -                 5.64%                                            
Weighted average shares                            805 590 826                                            
EPS (cents)                                              52.89                2.16                  4%    
HEPS (cents)                                             52.14               (0.09)                  -    
Core HEPS (cents)                                        53.45                1.68                  3%    


Commentary
Core headline earnings for the six months ended 30 November 2018 equated to a negative 11.39 cents per share, post 
a dilution resulting from the issue of additional shares to facilitate part-payment of the acquisitions of Cell C 
and 3G Mobile as well as the negative impact of the underlying factors expounded upon below.

The interim results for the comparative period ended 30 November 2017, incorporated the Group's share of profits in 
Cell C of R928 million, inclusive of the recognition of a deferred tax asset of R865 million. This was a once-off 
recognition to earnings in that period. During the current reporting period, the Group's share of losses in Cell C 
equated to R123 million. The negative movement to Group core headline earnings by Cell C amounted to R1.05 billion.

In terms of the restructure of Cell C's debt to third-party lenders, The Prepaid Company (TPC) was obligated to
purchase bond notes issued by SPV1 with a capital redemption value of USD21 million at a coupon rate of 8.625% per 
annum  for a purchase consideration of USD9 million and to provide liquidity support to SPV2 of up to USD80 million 
in the form  of subordinated funding. Oger Telecoms contributed USD36 million of the aforesaid USD80 million, thus 
confining TPC's obligation in this regard to a maximum of USD44 million. 

SPV1 and SPV2 own 11.8% and 16% of the shares issued by Cell C respectively. No other assets are held by these
entities, and as such the Group's bond note and liquidity support arrangements will be settled only once the value 
of Cell C's shares are realised by both SPV1 and SPV2. Blue Label has a reversionary pledge of 5% of the shares 
issued by Cell C relating to the Group's exposure in SPV2.

The derivatives were initially required to be recognised at fair value and thereafter to be measured at fair value
through profit or loss. Although the valuation of Cell C as at 30 November 2018 of R13.4 billion was adequate to 
support the carrying value of the investment therein, it was not adequate enough to support the recoverability of 
the exposure to SPV1 and SPV2. As a result thereof, a fair value downward adjustment totalling R493 million, of 
which R47 million related to SPV1 and R446 million to SPV2, impacted negatively on core headline earnings. The 
remaining exposure to these derivatives is R121 million for SPV1 and R102 million for SPV2.

As illustrated in the table below, core headline earnings from the balance of the entities within the Blue Label 
Group increased by R80 million (19%) from R431 million to R510 million, equating to core headline earnings per 
share of 55.13 cents after the increase in the weighted average number of shares in issue from 806 million shares 
at 30 November 2017 to 926 million shares as at 30 November 2018. 

Group revenue declined by 10% to R12.3 billion. As only the gross profit earned on "PINless top-ups", prepaid
electricity and ticketing are accounted for, on imputing the gross revenue generated thereon, the effective growth 
in revenue equated to 7%. The composition thereof was as follows:

                                                      November            November                 
                                                          2018                2017             Growth      Growth    
Unaudited                                                R'000               R'000              R'000           %
Prepaid airtime, data and related revenue           15 145 615          16 341 414         (1 195 799)        (7%)   
- Prepaid airtime and data                           9 651 183          12 387 119         (2 735 936)       (22%)   
- "PINless" airtime top-ups#                         5 494 432           3 954 295          1 540 137         39%    
Postpaid airtime, data and related revenue              78 187              54 028             24 159         45%    
Prepaid and postpaid SIM cards                         603 092             425 555            177 537         42%    
Services                                               331 717             311 157             20 560          7%    
Gross electricity revenue                           10 006 253           8 360 543          1 645 710         20%    
- Electricity commission                               190 470             154 325             36 145         23%    
- Gross electricity revenue#                         9 815 783           8 206 218          1 609 565         20%    
Handsets, tablets and other devices                  1 092 645             239 233            853 412        357%    
Finance revenue                                        259 838                   -            259 838                
Gross ticketing revenue#                               323 768             275 984             47 784         17%    
Other revenue                                           94 585              62 025             32 560         52%    
Gross revenue                                       27 935 700          26 069 939          1 865 761          7%    
Less: imputed gross revenue(sum of#)               (15 633 983)        (12 436 497)        (3 197 486)        26%    
Reported revenue                                    12 301 717          13 633 442         (1 331 725)       (10%)   
                                                                                                                     

The decline in prepaid airtime revenue, inclusive of gross revenue generated on "PINless top-ups" by 7%, was partly
attributable to unfavourable market conditions and the reduction of low-margin yielding sales. This decline was offset 
by significant growth of 20% on prepaid electricity revenue generated on behalf of the utilities from R8.4 billion to 
R10 billion of which the commission earned thereon escalated by R25 million to R149 million. A further offset of 
R1.1 billion was attributable to revenue generated by 3G Mobile on handsets, tablets and other devices, once it became 
a wholly owned subsidiary from December 2017.

The decline in EBITDA was entirely attributable to the fair value downward adjustment relating to SPV1 and SPV2.
EBITDA generated by the remaining entities within the Group increased by 13% from R768 million to R872 million, 
underpinned by an increase in gross profit margins from 8.37% to 10.63%.

The Group's share of losses in Blue Label Mexico increased from R10 million to R13 million (24%) having sustained a
decline in gross profit by R10 million.

The net asset value per share equated to R9.67 and earnings per share declined from 167.61 cents to a negative 12.59
cents per share ((108)%). On exclusion of the financial results of Cell C and the negative impact of the SPV 
adjustments, earnings per share from the balance of the entities within the Blue Label Group amounted to 55.05 cents 
per share.

Africa Distribution                                                                                                 
                                          Unaudited       Unaudited          Growth       Growth         Audited    
                                          November        November             R'000           %            May     
                                               2018            2017                                         2018    
                                              R'000           R'000                                        R'000    
Revenue                                  12 017 922      13 357 831       (1 339 909)       (10%)     26 245 206    
Gross profit                              1 166 307       1 009 700          156 607         16%       2 014 169    
EBITDA                                      318 065         732 048         (413 983)       (57%)      1 344 824    
Share of (loss)/profit from 
associates and joint ventures              (139 451)        949 534       (1 088 985)      (115%)        583 122    
- Cell C                                   (133 465)        924 194       (1 057 659)          -         562 567    
- 3G Mobile                                       -          31 381         (31 381)           -          31 155    
- Other                                      (5 986)         (6 041)              55          1%         (10 600)   
Core net (loss)/profit                     (105 425)      1 395 705       (1 501 130)      (108%)      1 385 494    
Core headline earnings                     (127 791)      1 394 892       (1 522 683)      (109%)      1 384 739    
Gross profit margin                           9.70%           7.56%                                        7.67%    
EBITDA margin                                 2.65%           5.48%                                        5.12%    

The composition of the above is expounded upon in the tables below, consisting of the financial results for the six
month periods ended 30 November 2018, 30 November 2017 and 31 May 2018 respectively. 

The comparison of these respective periods affords insight into the contributions to Group core headline earnings by
3G Mobile, Airvantage, Cell C and the historical remaining entities within this segment, as well as adjustments required
outside the operational performance of the Africa Distribution segment. 

Six month period ended 30 November 2018
                                                                                            SPVs
                                                                                      adjustment
                          November                                                      November        IFRS 9       Remaining     
                              2018         3G Group      Airvantage        Cell C           2018     adjustment       entities    
Unaudited                    R'000           R'000           R'000         R'000           R'000          R'000          R'000    
Revenue                 12 017 922       1 095 203          43 307             -               -             -      10 879 412    
Gross profit             1 166 307         241 484          34 235             -               -             -         890 588    
EBITDA                     318 065         199 663          28 564             -       (492 640)        23 095         559 383    
Share of losses from 
associates and joint 
ventures                  (139 451)              -               -      (133 465)              -             -          (5 986)   
- Cell C                  (133 465)              -               -      (133 465)              -             -               -    
- 3G Mobile                      -               -               -             -               -             -               -    
- Other                    (5 986)               -               -             -               -             -         (5 986)    
Core net (loss)/profit    (105 425)        144 264          10 081      (128 277)      (492 640)        23 886         337 261    
Core headline earnings    (127 791)        144 264          10 076      (123 056)      (492 640)        23 886         309 679    
Gross profit margin          9.70%          22.05%          79.05%                                                       8.19%    
EBITDA margin                2.65%          18.23%          65.96%                                                       5.14%    

Six month period ended 30 November 2017     
                                        November                                                                      Remaining
                                            2017         3G Group      Airvantage         Cell C      Adjustment       entities     
Unaudited                                  R'000            R'000           R'000          R'000           R'000          R'000    
Revenue                               13 357 831                -               -              -               -     13 357 831    
Gross profit                           1 009 700                -               -              -               -      1 009 700    
EBITDA                                   732 048                -               -              -               -        732 048    
Share of profits/(losses) from 
associates and joint ventures            949 534           31 381               -        924 194               -        (6 041)    
- Cell C                                 924 194                -               -        924 194               -              -    
- 3G Mobile                               31 381           31 381               -              -               -              -    
- Other                                  (6 041)                -               -              -               -        (6 041)    
Core net profit                        1 395 705           35 537               -        927 643         (21 194)       453 719    
Core headline earnings                 1 394 892           35 537               -        927 643         (21 194)       452 906    
Gross profit margin                        7.56%                                                                          7.56%    
EBITDA margin                              5.48%                                                                          5.48%    
                                                                                                                                   
Six month period ended 31 May 2018   
                                        December
                                          2017 -
                                             May                                                                      Remaining
                                            2018          3G Group      Airvantage         Cell C      Adjustment      entities     
Unaudited                                  R'000             R'000           R'000          R'000           R'000         R'000    
Revenue                               12 887 375        1 387 029          36 929              -               -     11 463 417    
Gross profit                           1 004 469          226 184          29 241              -               -        749 044    
EBITDA                                   612 776          181 322          20 650              -          (2 629)       413 433    
Share of losses from 
associates and 
joint ventures                         (366 412)            (226)               -      (361 627)               -        (4 559)   
- Cell C                               (361 627)                -               -      (361 627)               -              -    
- 3G Mobile                                (226)             (226)              -              -               -              -    
- Other                                  (4 559)                -               -              -               -        (4 559)    
Core net profit                         (10 211)          121 942           8 267      (356 429)         (67 772)       283 781    
Core headline earnings                  (10 152)          121 185           8 267      (358 168)         (67 772)       286 336    
Gross profit margin                        7.79%           16.31%          79.18%                                         6.53%    
EBITDA margin                              4.75%           13.07%          55.92%                                         3.61%    

3G Mobile
Revenue generated for the six months to 30 November 2018 amounted to R1.1 billion, gross profit to R241 million at a
margin of 22.05% and EBITDA to R200 million. Core net profit for the six months as a wholly owned subsidiary amounted to
R144 million.

From the date of acquisition of 47.37% in August 2017 until 30 November 2017, its financial results for the four-month
period were equity accounted for as an associate. Its core net profit during that period amounted to R75 million, of
which the Group's share equated to R35 million. After the amortisation of intangible assets, its contribution as an
associate amounted to R31 million.

On 6 December 2017 the remaining 52.67% of the company was acquired, at which date it became a wholly owned
subsidiary. Revenue generated for the six months to 31 May 2018 amounted to R1.4 billion, gross profit to R226 million at a 
margin of 16.31% and EBITDA to R181 million. Its core net profit for the six months as a wholly owned subsidiary amounted to
R122 million.

Airvantage
On 2 January 2018, Blue Label acquired 60% of Airvantage.

Revenue generated by it for the five months to 31 May 2018 amounted to R37 million, gross profit to R29 million at a
margin of 79.18%, EBITDA to R21 million and NPAT to R14 million, of which the Group's share equated to R8.3 million.

Revenue generated for the six months to 30 November 2018 amounted to R43 million, gross profit to R34 million at a
margin of 79.05%, EBITDA to R29 million and NPAT to R17.5 million. The Group's share thereof equated to R10.3 million.

Cell C
On 2 August 2017, TPC acquired a 45% shareholding in Cell C.

For the six months ended November 2018, Cell C's net loss amounted to R634 million. The Group's share thereof amounted
to R285 million. Blue Label's accounting policies exclude equity-settled share-based payment charges from its
associates and has not early adopted IFRS 16. Accordingly, an adjustment of R51 million and R106 million respectively was
required. The net result was a negative contribution of R128 million to Blue Label's core earnings.

For the 10 months ended May 2018, Cell C's net profit amounted to R1.14 billion. This comprised trading losses of 
R782 million offset by the recognition of a deferred tax asset amounting to R1.92 billion. The Group's share of this net
profit was R512 million. In line with Blue Label's accounting policies as above, an exclusion relating to equity-settled
share-based payment charges from its associates and the reversal of the early adoption of IFRS 15 and IFRS16, resulted in
a positive adjustment of R65 million and a negative adjustment of R6 million respectively. The net result was a positive
contribution of R571 million to Blue Label's core earnings.

Adjustments
The adjustment of R493 million for the six months ended 30 November 2018 was attributable to the fair value downward
adjustment relating to the non-recoverability of the exposure to SPV1 and SPV2. 

Adjustments for the six months ended 30 November 2017 amounted to R21 million relating to once-off costs of imputed
IFRS interest adjustments attributable to the acquisition of 3G Mobile.

Adjustments for the six months ended 31 May 2018 amounted to R68 million, of which R43.3 million was attributable to
once-off costs of imputed IFRS interest adjustments for the acquisitions of 3G Mobile and Airvantage and R28.1 million to
interest and costs relating to the 3G Mobile acquisition. These adjustments were partly offset by a derivative fair
value gain of R3.7 million on financial instruments. 

Remaining entities                                                        
                                                                                                H2
                                  H1               H1                                     December
Unaudited                   November         November       H1 vs H1      H1 vs H1            2017      H1 vs H2    H1 vs H2    
                                2018             2017         Growth        Growth      - May 2018        Growth      Growth    
                               R'000            R'000          R'000             %           R'000         R'000           %    
Revenue                   10 879 412       13 357 831     (2 478 419)         (19%)     11 463 417      (584 005)        (5%)   
Gross profit                 890 588        1 009 700       (119 112)         (12%)        749 044       141 544         19%    
EBITDA                       559 383          732 048       (172 665)         (24%)        413 433       145 950         35%    
Share of losses from 
associates and 
joint ventures                (5 986)          (6 041)            55            1%          (4 559)      (1 427)        (31%)   
Core net profit              337 261          453 719       (116 458)         (26%)        283 781        53 480         19%    
Core headline earnings       309 679          452 906       (143 227)         (32%)        286 336        23 343          8%    
Gross profit margin            8.19%            7.56%                                        6.53%                              
EBITDA margin                  5.14%            5.48%                                        3.61%                                 

Although there was a decline in core headline earnings from R453 million for the six months ended 30 November 2017 to
R310 million for the current reporting period, the comparative period included rebates of R136 million post-taxation
from Cell C. The recapitalisation of Cell C enabled Blue Label to reduce its inventory holding, and in turn to recognise
the pre-existing rebates received from the sale of the inventory on a piecemeal basis over the course of that period.

Post the recapitalisation of Cell C, core headline earnings for the six months ended 31 May 2018 amounted to R286
million in comparison to the R310 million earned in the current reporting period, equating to a growth of 8%. This
comparison illustrates the growth in earnings post the recognition of the pre-existing rebates that took place between 
August 2017 and November 2017. 

Revenue declined by 19% from R13.4 billion to R10.9 billion, in that only the gross profit earned on "PINless
top-ups", prepaid electricity and ticketing are accounted for. On imputing the gross revenue generated thereon, the 
effective growth in revenue equated to 3%. 

The decline in prepaid airtime revenue, inclusive of gross revenue generated on "PINless top-ups" by 7%, was partly
attributable to unfavourable market conditions and the reduction of low-margin yielding sales. This decline was offset 
by significant growth of 20% on prepaid electricity revenue generated on behalf of the utilities.

Net commissions earned on the distribution of prepaid electricity continued to increase, escalating by R25 million to
R149 million (20%) on an increase in revenue generated on behalf of the utilities from R8.4 billion to R10 billion
(20%).

Although gross profit declined from R1 billion for the six months ended 30 November 2017 to R891 million for the
current reporting period, the comparative period included the recognition of pre-existing rebates at a pre-tax level of 
R188 million as expounded upon above, at a margin of 7.56%. Gross profit for the six months ended 31 May 2018 amounted to
R749 million in comparison to the R891 million earned in the current reporting period, on margin increases from 6.53% to
8.19%.

The core headline earnings adjustment of R28 million for the six months ended 30 Nov 2018 was attributable to the fair
value uplift relating to the acquisition of the remaining 60% of Lornanox Proprietary Limited, formerly trading as
Edgars Connect and renamed WiConnect. As this fair value uplift is a headline earnings adjustment, it had no impact on 
core headline earnings. 

International
                                         Unaudited       Unaudited                                   Audited
                                          November        November                                       May
                                              2018            2017       Growth      Growth             2018    
                                             R'000           R'000        R'000           %            R'000    
Revenue                                     12 940               -       12 940                            -    
Gross profit                                11 647               -       11 647                            -    
EBITDA                                      26 700          22 203        4 497         20%           (2 903)    
Gain on associate measured 
at fair value                               13 115             716       12 399                     (173 645)    
Share of (losses)/profits 
from associates and 
joint ventures                             (13 002)        (10 246)      (2 756)       (27%)         (21 647)    
- Blue Label Mexico                        (13 002)        (10 511)      (2 491)       (24%)         (21 900)    
- Mpower                                         -             265         (265)                         253    
Non-controlling interest                    (3 780)        (32 460)      28 680                      (26 058)    
Core net profit/(loss)                      22 258         (16 714)      38 972        233%         (225 450)    
Core headline profit/(loss)                 22 115         (21 878)      43 993        201%         (230 614)    



The composition of the above results for the six months ended November 2018, is expounded upon in the table below:

International                                                                                                    
Unaudited                            November      Airvantage               AV                     Remaining    
                                         2018          Brazil       Technology      Adjustment      entities    
                                        R'000           R'000            R'000               %         R'000    
Revenue                                12 940               -           12 940               -             -    
Gross profit                           11 647               -           11 647               -             -    
EBITDA                                 26 700           3 025            9 864            (784)       14 595    
Gain on associate measured 
at fair value                          13 115               -                -               -        13 115    
Share of losses from associates
and joint ventures                    (13 002)              -                -               -       (13 002)   
- Blue Label Mexico                   (13 002)              -                -               -       (13 002)   
- Mpower                                    -               -                -               -             -    
Non-controlling interest               (3 780)         (1 303)          (2 477)              -             -    
Core net profit                        22 258           1 709            5 490            (934)       15 993    
Core headline profit                   22 115           1 709            5 490            (934)       15 850    

On 2 January 2018 Blue Label acquired 60% of the issued share capital of Airvantage Proprietary Limited for a 
purchase consideration of R151 million, inclusive of its 80% ownership in Airvantage Brazil. 

On 1 August 2018, Blue Label acquired 60% of the issued share capital of AV Technology Limited for a purchase
consideration of USD6.4 million (R84.2 million).

Consequently, in both of the above instances no comparatives existed for the six months ended November 2017.

The increase in EBITDA of R4.5 million was attributable to positive foreign exchange movements of R7 million,
non-comparatives applicable to Airvantage Brazil and AV Technology amounting to R13 million, offset by loan 
releases of R16 million relating to the winding up process of the Africa Prepaid Services group in the 
comparative period. 

Non-controlling interest of R3.8 million related to minority shareholders in both Airvantage Brazil and 
AV Technology. The R32 million in the comparative period related to the Africa Prepaid Services group for 
its share of the loan releases as a consequence of the winding up process therein.

Oxigen Services India and 2DFine
The investments in Oxigen Services India, Oxigen Online Services India and 2DFine group (collectively OSI) 
are accounted for as venture capital investments at fair value. 

The change in fair value between 31 May 2018 and 30 Nov 2018 increased by R13 million, offset by a net loan 
impairment of R2 million. However, a further loan impairment of R13 million was accounted for in the corporate 
segment. The net overall impact on Group earnings amounted to a negative contribution of R2 million.


Blue Label Mexico
Losses in Blue Label Mexico increased from R20 million to R25 million, of which the Group's share amounted to 
R13 million after the amortisation of intangible assets. In the comparative year the Group's share of losses 
amounted to R10.5 million.

The increase in loss was attributable to a decline in revenue from R1.9 billion to R1.8 billion (5%), compounded 
by a decline in gross profit margins from 4.30% to 4.03%. In spite of containing overheads and a reduction in 
depreciation, the above resulted in the Group's share of losses increasing by R2.5 million.

In order to mitigate further losses, major rationalisation and restructure programmes were implemented with 
effect from December 2018. These measures should result in it becoming profitable.


Mobile                      Unaudited      Unaudited                               Audited
                             November       November                                   May
                                 2018           2017       Growth      Growth         2018    
                                R'000          R'000        R'000           %        R'000
Revenue                       165 439        172 988       (7 549)        (4%)     359 970    
Gross profit                   96 612         97 873       (1 261)        (1%)     204 349    
EBITDA                         48 580         47 283        1 297          3%      101 883    
Core net profit                30 277         27 548        2 729         10%       59 553    
Core headline earnings         30 266         27 512        2 754         10%       59 679    

This segment comprises Viamedia, Supa Pesa, Blue Label One, Cellfind, Panacea and Simigenix.

Although revenue declined by 4%, margin increases from 56.58% to 58.40% limited a decline in gross profit to 1%.
EBITDA increased by 3% attributable to a reduction in overheads.

Contribution to Group core headline earnings increased by 10% to R30 million. 

Solutions
                              Unaudited      Unaudited                               Audited    
                               November       November                                   May     
                                   2018           2017       Growth      Growth         2018    
                                  R'000          R'000        R'000           %        R'000    
Revenue                         105 416        102 623        2 793          3%      195 089    
Gross profit                     33 425         33 673         (248)        (1%)      63 574    
EBITDA                           21 978         24 442       (2 464)       (10%)      42 838    
Share of (losses)/profits 
from associates                  13 852            519       13 333      2 569%        4 579    
and joint ventures                                                                              
Core net profit                  25 155         13 715       11 440         83%       29 836    
Core headline earnings           25 155         13 710       11 445         83%       29 814    


This segment comprises Datacel, Blue Label Data solutions (BLDS), a data aggregation and lead generation 
entity in which the Group owns 81%, and a 50% joint venture shareholding by BLDS in United Call Centre 
Solutions, an outbound call
centre operation. 

The growth in revenue by 3% to R105 million was attributable to increased demand for aggregated data and 
lead generations. A marginal decline in gross profit margins from 32.81% to 31.71% resulted in a nominal 
movement in gross profit. After overhead increases of 12%, EBITDA equated to R22 million.

Of the core headline earnings of R25 million, BLDS accounted for R15 million. United Call Centre Solutions 
generated earnings of R27.5 million, of which BLDS's share amounted to R13.8 million. After accounting for 
minority shareholding of 19%, the Group's share thereof amounted to R11.2 million. 

Corporate                                                                                   
                        Unaudited      Unaudited                                 Audited    
                         November       November                                     May     
                             2018           2017       Growth      Growth           2018    
                            R'000          R'000        R'000           %          R'000    
EBITDA                    (36 155)       (57 501)      21 346         37%       (146 489)   
Core net loss             (55 139)       (56 007)         868          2%       (211 464)   
Core headline loss        (55 139)       (56 007)         868          2%       (211 602)   

Of the decline in negative EBITDA of R22 million, R6 million pertained to a positive turnaround in foreign 
exchange movements and R17 million to a release of a portion of a put-option liability for the acquisition 
of the remaining 40% minority share of Airvantage SA and AV Technology Mauritius. 

The negative contribution to Group core headline earnings declined by R1 million to R55 million, which 
losses included the loan impairment of R13 million pertaining to 2DFine resulting from the fair value 
adjustment in the Oxigen group and imputed IFRS interest adjustments of R7 million pertaining to the 
unwinding of the put-option liability.

Depreciation, amortisation and impairment charges
Depreciation, amortisation and impairment charges increased by R68 million to R128 million. Of this increase,  
R9.6 million pertained to depreciation on additional capital expenditure incurred during the year, impairments 
of R0.4 million and R42.8 million relating to the amortisation of intangible assets of which R38.8 million 
emanated from purchase price allocations on historical acquisitions, which increased from R8.1 million to 
R46.9 million. The remaining R15 million related to the impairment on the loans to 2DFine Holdings by 
R26.5 million, offset by an increase of R11.4 million in a surety asset raised.

Net finance costs
Finance costs totalled R119 million, of which R112 million related to interest paid on borrowed funds and 
R7 million to imputed IFRS interest adjustments. On a comparative basis, interest paid on borrowed funds   
amounted to R41 million and the imputed IFRS interest adjustment equated to R86 million. Of the latter 
amount, R65 million was attributable to credit received from suppliers and R21 million to the acquisition 
of 3G Mobile.

The increase of R71 million was attributable to additional borrowings utilised from existing facilities. 

Finance income totalled R78 million, of which R77 million was attributable to interest received on cash 
resources and R1 million to imputed IFRS interest adjustments on credit afforded to customers. In the 
prior year, interest received on cash resources amounted to R68 million and the imputed IFRS interest 
adjustment to R1 million.

The increase of R10 million in interest received from cash resources related to an advance to Cell C 
for capital expenditure.

Statement of financial position
Total assets increased by R1.2 billion to R19.1 billion mainly due to the increase of non-current assets by  
R1 billion. Current assets increased by R0.2 billion. 

Non-current assets included increases of R347million in intangible assets and goodwill, of R482 million in 
financial assets at fair value through profit or loss, R212 million in trade and other receivables, R67 million 
in capital expenditure net of depreciation, R44 million in deferred tax assets and R26 million in venture capital 
associates and joint ventures. These increases were offset by a net decrease of R183 million in investments in 
and loans to associates and joint ventures.

The net decrease of R183 million in investments in and loans to associate and joint venture companies comprised 
the Group's share of net losses totalling R138 million inclusive of the amortisation of applicable intangible assets,  
the step-up of Lornanox from an associate to a subsidiary which amounted to a net R52 million, dividends received of 
R4 million and a net negative impact of R14 million relating to the IFRS 9 impact on the loans to associates and 
joint ventures. These decreases were offset by a positive impact on foreign currency translation reserves of 
R14 million and net loans granted of R7 million.

Of the net increase in intangible assets and goodwill of R347 million, R255 million related to goodwill and R92
million to intangible assets. Of the goodwill increase, R158 million pertained to Glocell, R51 million to Airvantage 
Mauritius and R46 million to Lornanox. The increase in intangible assets related to purchase price allocations of 
R55 million raised in terms of IFRS 3 for Glocell and R78 million for Airvantage Mauritius, an additional R56 million 
expended on the purchase of software, internally generated software development costs and customer lists and a 
positive impact of foreign currency translation reserves of R5 million. These intangible increases were offset by 
amortisation of R97 million.

The net increase in venture capital associates and joint ventures of R26 million related to an increase of R13 million
in the fair value of the investment in Oxigen Services India, offset by a loan impairment of R26 million. In addition
there were unrealised foreign exchange profits on loans of R25 million and interest of R14 million capitalised thereon.

The increase of R482 million in a financial assets at fair value through profit or loss was due to a trade debtor of
R361 million being reclassified into this category following the acquisition of 48% of Glocell Distribution. This was
reflected in current assets in the prior period. The remaining R121 million related to the derivative asset on SPV1 
which was classified in the prior period in current assets at a value of R168 million. The decrease of R47 million 
related to the fair value loss on this derivative. The reclassification from current to non-current assets was due to 
a change in the timing of the expected exit event. 

Of the increase in current assets, material movements included increases in inventories of R752 million, in trade 
and other receivables of R711 million, offset by a repayment of a R1 billion loan granted to Cell C, other loans of 
R38 million and a decrease of R168 million in the financial assets at fair value through profit or loss. 

The stock turn equated to 22 days compared to nine days for the financial year ended 31 May 2018. Bulk inventory
purchase opportunities at favourable discount rates validated the consequent increase in inventory. The nature of the
business enables it to reduce its inventory holdings below the above number of days at any given time.

The debtor's collection period increased to 95 days compared to 75 days for the financial year ended 31 May 2018. This
increase in credit afforded was indicative of the impact of financing the handset element of 24-month postpaid
contracts provided to the Cell C customer base by Comm Equipment Company Proprietary Limited (CEC), a wholly owned 
subsidiary of 3G Mobile. The debtor's collection period afforded through traditional trading averaged 52 days compared 
to 43 days for the financial year ended 31 May 2018.

Net loss attributable to equity holders of R117 million as well as a R115 million adjustment to the opening balance on
initial application of IFRS 9 and IFRS 15, resulted in retained earnings accumulating to R4.1 billion.

Share capital and share premium decreased by R246 million congruent with the repurchase of 32.9 million shares at a
weighted average price of R6.78 per share and the purchase of treasury shares amounting to R42 million, less 
R21 million of shares that vested.

Borrowings increased by R638 million, of which R290 million was applied by CEC for the financing of mobile handsets
and R348 million utilised for working capital requirements. 

Financial liabilities at fair value through profit or loss increased by R393 million due to the fair value loss on
SPV2 of R446 million, offset by the liquidity support payment of R53 million (USD4 million) to SPV2.

Trade and other payables increased by R652 million, with average credit terms increasing to 85 days compared to 
66 days for the financial year ended 31 May 2018.

Statement of cash flows
Negative cash generated from operating activities, amounting to R1.19 billion, was in line with increases in inventory
by R715 million and accounts receivable by R1.3 billion, offset by additional credit of R457 million afforded to the
Group by its suppliers. 

The increase in inventory was attributable to bulk purchasing at favourable discounts. Although this resulted in a
temporary increase in inventory holding days, being a highly liquid asset, such excess inventory of approximately 
R1.2 billion is capable of reduction within any given month. Of the increase in accounts receivable, R396 million 
pertained to the financing of the handset element of postpaid contracts over a 24-month period by CEC, of which 
R260 million was funded through the utilisation of facilities available to it. A further R142 million related to a 
prepayment to utilities for prepaid electricity, which was replaced by inventory one day post the reporting period 
due to timing differences.

Cash generated from operating activities on a normalised basis equated to a positive R409 million after adding back
the excess inventories of R1.2 billion, the prepayment of R142 million and R260 million of the utilisation of 
facilities for the funding of handsets.

Cash flows generated from investing activities amounted to R847 million, mainly attributable to the R1 billion loan
that was repaid by Cell C, offset by funds applied, net of cash acquired, to the acquisition of Airvantage Mauritius
amounting to R19 million. A further R53 million was granted for the liquidity support to SPV2, R54 million for the 
purchase of intangible assets and R57 million for capital expenditure.

Cash flows from financing activities amounted to R337 million, of which R633 million related to an increase in
borrowings. After applying R224 million to the share buyback, R42 million to the acquisition of treasury shares and 
a dividend payment of R29 million to non-controlling interests, cash on hand at year-end amounted to R940 million.

Forfeitable share scheme
Forfeitable shares totalling 6 387 930 (2017: 1 888 961) were issued to qualifying employees. During the period 
224 545 (2017: 174 418) shares were forfeited and 2 245 445 (2017: 2 432 743) shares vested.

Prospects
The route-to-market expansion by Blue Label Distribution into the rural areas and townships is expected to continue
its momentum in the further deployment of vending outlets, affording customer convenience and significant savings 
in transport costs.
 
Starter pack sales which generate compounding monthly annuity revenue continue to grow in these rural and township
localities.
 
The distribution of both high-end and affordable low-cost handsets continues to exceed expectations with further
inroads into the wider Africa market.
 
Cell C has concluded a binding term sheet with the Buffet consortium in terms of which Buffet shall, subject to the
fulfilment of certain conditions precedent, become a minority shareholder in Cell C. With Buffet support the Cell C 
balance sheet will be bolstered and ensure Cell C's sustainable growth for the future.

Cell C financial information
Cell C's preliminary unaudited financial information for the year ended 31 December 2018 is availableon the company's 
website. (www.bluelabeltelecoms.co.za/inv-latest-results.php).


Appreciation
The Board of Blue Label would once again like to express its appreciation to its suppliers, customers, business
partners and staff for their ongoing support and loyalty.

For and on behalf of the Board

LM Nestadt
Chairman

BM Levy and MS Levy
Joint Chief Executive Officers

DA Suntup# CA(SA)
Financial Director

28 February 2019
# Supervised the preparation of the unaudited condensed Group interim results.

Unaudited condensed Group statement of financial position

                                                                            30 November      30 November           31 May    
                                                                                   2018             2017             2018    
                                                                              Unaudited        Unaudited          Audited    
As at                                                             Note            R'000        Restated#            R'000    
                                                                                                   R'000                     
ASSETS                                                                                                                       
Non-current assets                                                           10 426 593        9 589 037        9 404 315    
Property, plant and equipment                                                   203 648          112 501          137 120    
Intangible assets                                                             1 168 684          476 123        1 076 871    
Goodwill                                                                      1 291 529          604 590        1 036 243    
Investments in and loans to associates and joint ventures          4.2        6 244 100        7 666 388        6 398 305    
Investments in and loans to venture capital associates 
and joint venture                                                  4.1          303 371          567 487          277 835    
Loans receivable                                                                 52 865           42 367           53 270    
Financial assets at fair value through profit or loss                3          481 868           79 050                -    
Trade and other receivables                                                     591 434           23 238          379 448    
Deferred taxation assets                                                         89 094           17 293           45 223    
Current assets                                                                8 747 135        5 673 092        8 526 636    
Inventories                                                                   1 350 442        1 267 436          597 946    
Loan to associate                                                                     -          749 279        1 029 626    
Loans receivable                                                                169 928          112 941          207 799    
Financial assets at fair value through profit or loss                3                -                -          168 144    
Trade and other receivables                                                   6 242 626        3 050 458        5 531 291    
Current tax assets                                                               34 386           21 775           43 942    
Cash and cash equivalents                                                       949 753          471 203          947 888    
                                                                                                                             
Total assets                                                                 19 173 728       15 262 129       17 930 951    
EQUITY AND LIABILITIES                                                                                                       
Capital and reserves                                                          9 023 175        9 026 790        9 506 642    
Share capital, share premium and treasury shares                              7 598 999        6 957 271        7 844 847    
Restructuring reserve                                                        (1 843 912)      (1 843 912)      (1 843 912)   
Other reserves                                                                  101 986          115 795           84 662    
Share-based payments                                                             32 107           38 026           49 542    
Transactions with non-controlling interest reserve                           (1 132 052)        (975 302)      (1 069 268)   
Retained earnings                                                             4 081 151        4 640 491        4 283 854    
                                                                              8 838 279        8 932 369        9 349 725    
Non-controlling interest                                                        184 896           94 421          156 917    
Non-current liabilities                                                       2 091 596           71 217        1 745 790    
Deferred taxation liabilities                                                   274 094           66 463          229 100    
Borrowings                                                                    1 804 250                -        1 514 140    
Trade and other payables                                                         13 252            4 754            2 550    
Current liabilities                                                           8 058 957        6 164 122        6 678 519    
Trade and other payables                                                      5 728 045        6 073 592        5 086 196    
Provisions                                                                       42 522           43 679           39 628    
Financial liabilities at fair value through profit or loss           3          437 947                -           45 360    
Current tax liabilities                                                          35 194           44 913           50 367    
Bank overdraft                                                                   10 105                -                -    
Borrowings                                                                    1 805 144            1 938        1 456 968    
                                                                                                                             
Total equity and liabilities                                                 19 173 728       15 262 129       17 930 951    
# As a result of the revised guidance in Circular 2/2017 the Group has restated its comparative financial information 
  for changes in accounting policies. The effects of this change have already been taken into account in the reported 
  May 2018 results.


Unaudited condensed Group statement of comprehensive income
                                                                                               Six months
                                                                 Note        Six months             ended              Year    
                                                                                  ended       30 November             ended    
                                                                            30 November              2017            31 May    
                                                                                   2018         Unaudited              2018    
                                                                              Unaudited         Restated#           Audited    
                                                                                  R'000             R'000             R'000    
Revenue                                                             2        12 301 717        13 633 442        26 800 265    
Other income                                                                    104 502            29 245            81 704    
Changes in inventories of finished goods                                    (10 993 726)      (12 492 195)      (24 518 173)   
Employee compensation and benefit expense                                      (301 043)         (225 883)         (524 187)   
Depreciation, amortisation and impairment charges                              (128 441)          (60 462)         (242 604)   
Other expenses                                                                 (732 282)         (176 134)         (499 456)   
Operating profit                                                                250 727           708 013         1 097 549    
Finance costs                                                                  (118 819)         (126 431)         (306 636)   
Finance income                                                                   78 491            69 074           195 298    
Gain/(loss) on associates and joint venture 
measured at fair value                                                           13 115               716          (173 645)   
Share of (losses)/profits from associates and joint ventures                   (138 038)          940 425           565 812    
Net profit before taxation                                                       85 476         1 591 797         1 378 378    
Taxation                                                                       (183 071)         (190 438)         (331 069)   
Net (loss)/profit for the period                                                (97 595)        1 401 359         1 047 309    
Other comprehensive income/(loss):                                                                                             
Items reclassified to profit or loss                                                                                           
Foreign currency translation reserve reclassified 
to profit or loss                                                                  (143)           (2 340)           (3 097)   
Items that may be subsequently reclassified 
to profit or loss                                                                  
Share of other comprehensive income/(loss) of 
associates and joint ventures                                                    14 114            11 138           (15 873)   
Foreign exchange profit/(loss) on translation 
of foreign operations                                                             3 058                (3)           (3 869)   
Other comprehensive income/(loss) for the period, 
net of tax                                                                       17 029             8 795           (22 839)   
Total comprehensive (loss)/income for the period                                (80 566)        1 410 154         1 024 470    
Net (loss)/profit for the period attributable to:                               (97 595)        1 401 359         1 047 309    
Equity holders of the parent                                                   (116 532)        1 350 261           993 624    
Non-controlling interest                                                         18 937            51 098            53 685    
Total comprehensive (loss)/income for the period 
attributable to:                                                                (80 566)        1 410 154         1 024 470    
Equity holders of the parent                                                    (99 208)        1 359 020           971 250    
Non-controlling interest                                                         18 642            51 134            53 220    
                                                                                                                               
# As a result of the revised guidance in Circular 2/2017 the Group has restated its comparative financial information for 
  changes in accounting policies. The effects of this change have already been taken into account in the reported 
  May 2018 results.                                                                    


Share performance
                                                                                            Six months
                                                                           Six months            ended             Year    
                                                                                ended      30 November            ended    
                                                                          30 November             2017           31 May    
                                                                                 2018        Unaudited             2018    
                                                                            Unaudited        Restated#          Audited    
                                                                                R'000            R'000            R'000    
Earnings per share for profit attributable                                                                                 
to equity holders                                                                                                          
Basic earnings per share (cents)                                               (12.59)          167.61           116.12    
Diluted earnings per share (cents)##                                           (10.76)          149.83           108.10    
Weighted average number of shares                                         925 687 772      805 590 826      855 686 588    
Diluted weighted average number of shares                                 931 144 868      812 327 853      860 487 563    
Number of shares in issue                                                 913 655 873      874 509 041      946 509 041    
Number of shares in issue excluding treasury shares                       904 201 467      868 892 834      940 885 750    
Share performance                                                                                                          
Headline earnings per share (cents)                                            (15.02)          166.86           115.42    
Diluted headline earnings per share (cents)##                                  (13.18)          149.09           107.41    
Dividend per share (cents)                                                          -               40               40    
Reconciliation between net (loss)/profit or                                                                                
core headline earnings for the period:                                                                                     
Net (loss)/profit for the period attributable                          
to equity holders of the parent                                              (116 532)       1 350 261          993 624    
Amortisation on intangible assets raised through                       
business combinations net of tax and net of                            
non-controlling interest                                                       33 658           13 987           44 345    
Core net (loss)/profit for the period                                         (82 874)       1 364 248        1 037 969    
Headline earnings adjustments                                                 (22 520)          (6 019)          (5 953)   
Core headline earnings                                                       (105 394)       1 358 229        1 032 016    
Core headline earnings per share (cents)###                                    (11.39)          168.60           120.61    
#  As a result of the revised guidance in Circular 2/2017 the Group has restated its comparative financial information for 
   a change in an accounting policy. The effects of this change have already been taken into account in the reported 
   May 2018 results.                                                           
## Diluted earnings per share and diluted headline earnings per share are calculated by adjusting the earnings and 
   headline earnings by the potential dilutive instruments within the Group as well as the weighted average number of 
   ordinary shares outstanding for the number of shares that would be issued on vesting under the employee forfeitable 
   share plan.                                                           
### Core headline earnings per share is calculated after adding back to headline earnings the amortisation of intangible 
    assets as a consequence of the purchase price allocations completed in terms of IFRS 3(R) - Business Combinations.


Headline earnings
                                                                                                Six months
                                                                               Six months            ended          Year    
                                                                                    ended      30 November         ended    
                                                                              30 November             2017        31 May    
                                                                                     2018        Unaudited          2018    
                                                                                Unaudited        Restated#       Audited    
                                                                                    R'000            R'000          R'00    
(Loss)/profit attributable to equity holders of the parent                       (116 532)       1 350 261       993 624    
Net profit on disposal of property, plant and equipment                              (254)            (855)       (1 272)   
Foreign currency translation reserve recycled to profit or loss                      (143)          (2 340)       (3 097)   
Profit on disposal of subsidiary                                                        -           (2 824)       (2 824)   
Fair value uplift on conversion from associate to subsidiary                      (27 741)               -             -    
Impairment of intangible assets and property, plant and equipment                     397                -         2 979    
Loss/(profit) on disposal of property, plant and equipment in associate               466                -       (12 075)   
Impairment of intangible assets in associate                                        4 755                -        10 336    
Headline earnings                                                                (139 052)       1 344 242       987 671    
Headline earnings per share (cents)                                                (15.02)          166.86        115.42    
# As a result of the revised guidance in Circular 2/2017 the Group has restated its comparative financial information for 
  changes in accounting policies. The effects of this change have already been taken into account in the reported
  May 2018 results.


Unaudited condensed Group statement of cash flows
                                                               Note       Six months       Six months            Year     
                                                                               ended            ended            ended    
                                                                         30 November      30 November           31 May    
                                                                                2018             2017             2018    
                                                                           Unaudited        Unaudited          Audited    
                                                                               R'000            R'000            R'000    
Cash flows from operating activities                                                                                      
Cash (utilised in)/generated by operations                                  (950 899)       3 297 462        3 588 780    
Interest received                                                             64 102           43 702          154 952    
Interest paid                                                               (118 819)         (40 642)        (187 489)   
Taxation paid                                                               (187 617)        (184 522)        (368 099)   
Net cash (utilised in)/generated from 
operating activities                                                      (1 193 233)       3 116 000        3 188 144    
Cash flows from investing activities                                                                                      
Acquisition of intangible assets and property, 
plant and equipment                                                         (111 514)         (46 119)        (102 823)   
Acquisition of subsidiaries net of cash acquired                  5           (7 162)               -         (291 240)   
Acquisition of associate                                                           -       (5 500 000)      (6 124 127)   
Acquisition of bond notes                                                          -          (79 050)        (117 037)   
Liquidity support granted#                                                   (53 229)               -                -    
Loans repaid by/(advanced to) Cell C                                       1 029 626         (740 000)      (1 017 522)   
Capital contribution to Oxigen Services India                                      -                -          (25 076)   
Loans (granted)/repaid                                                        (7 163)          66 567           23 348    
Loans granted to associates and joint ventures                                (7 485)          (1 841)         (31 641)   
Settlement of contingent consideration                                        (2 614)         (27 867)         (27 867)   
Other investing activities                                                     6 191          (17 403)         (44 394)   
Net cash generated from/(utilised in) 
investing activities                                                         846 650       (6 345 713)      (7 758 379)   
Cash flows from financing activities                                                                                      
Borrowings raised                                                            632 603                -          935 442    
Acquisition of treasury shares                                               (42 394)         (28 846)         (28 846)   
Share buy back##                                                            (224 006)               -                -    
Proceeds on share issue                                                            -        2 750 000        3 650 000    
Transaction costs on share issue                                                   -                -          (12 424)   
Dividends paid to non-controlling interest                                  (28 553)          (21 100)         (27 750)   
Dividends paid to equity holders of the parent                                     -         (349 804)        (349 804)   
Other financing activities                                                         -                -              (58)   
Net cash generated from financing activities                                 337 650        2 350 250        4 166 560    
Net decrease in cash and cash equivalents                                     (8 933)        (879 463)        (403 675)   
Cash and cash equivalents at the beginning of the period                     947 888        1 350 666        1 350 666    
Exchange gains on cash and cash equivalents                                      693                -              897    
Cash and cash equivalents at the end of the period                           939 648          471 203          947 888    
# This relates to the liquidity support given to SPV 2. Refer to note 3.
## Approximately 32.9 million shares were repurchased over the period 22 August 2018 to 21 September 2018 at a weighted 
   average price of R6.78 per share.


Unaudited condensed Group ststement of changes in equity                                                         
                                                              Share                                                 
                                                           capital,                                                 
                                                              share                                                 
                                                            premium                                                 
                                                       and treasury       Retained     Restructuring         Other       
                                                             shares       earnings           reserve     reserves1     
                                                          Unaudited      Unaudited         Unaudited     Unaudited     
Six months ended                                Note          R'000          R'000             R'000         R'000     
Opening balance as                                        7 844 847      4 283 854        (1 843 912)       84 662    
at 1 June 2018                                                                                                        
Adjustment on the initial                          6              -        (95 888)                -             -    
application of IFRS 9                                                                                                 
Adjustment on the initial                          6              -          9 717                 -             -    
application of IFRS 15                                                                                                
Adjusted opening balance                                  7 844 847      4 197 683        (1 843 912)       84 662    
as at 1 June 2018                                                                                                     
Net loss for the period                                           -       (116 532)                -             -    
Other comprehensive income                                        -              -                 -        17 324    
Total comprehensive (loss)/income                                 -       (116 532)                -        17 324    
Dividends paid                                                    -              -                 -             -    
Treasury shares purchased                                   (42 394)             -                 -             -    
Equity compensation benefit scheme                           20 552              -                 -             -    
shares vested                                                                                                         
Equity compensation benefit movement                              -              -                 -             -    
Acquisition of non-controlling interests                          -              -                 -             -    
Transaction with non-controlling interest                         -              -                 -             -    
reserve movement                                                                                                      
Share buy back                                             (224 006)             -                 -             -    
Balance as at 30 November 2018                            7 598 999      4 081 151        (1 843 912)      101 986    
Balance as at 1 June 2017                                 3 953 871      3 640 034        (1 843 912)      107 036    
Restated net profit for the period#                               -      1 350 261                 -             -    
Other comprehensive income                                        -              -                 -         8 759    
                                                                                                                      
Total comprehensive income                                        -      1 350 261                 -         8 759    
Dividends paid                                                    -       (349 804)                -             -    
Treasury shares purchased                                   (28 846)             -                 -             -    
Equity compensation benefit scheme                           21 653              -                 -             -    
shares vested                                                                                                         
Equity compensation benefit movement                              -              -                 -             -    
Disposal of non-controlling interests                             -              -                 -             -    
Issue of shares                                           3 010 593              -                 -             -    
Restated balance as at 30 November 2017#                  6 957 271      4 640 491        (1 843 912)      115 795    
                                                                                                                      
                                                            Audited        Audited           Audited       Audited    
Year ended                                                    R'000          R'000             R'000         R'000    
Balance as at 1 June 2017                                 3 953 871      3 640 034        (1 843 912)      107 036    
Net profit for the year                                           -        993 624                 -             -    
Other comprehensive income/(loss)                                 -              -                 -       (22 374)   
Total comprehensive income/(loss)                                 -        993 624                 -       (22 374)   
Treasury shares purchased                                   (28 846)             -                 -             -    
Shares issued                                             3 932 834              -                 -             -    
Transaction costs on shares issued                          (34 663)             -                 -             -    
Equity compensation benefit scheme                           21 651              -                 -             -    
shares vested                                                                                                         
Equity compensation benefit movement                              -              -                 -             -    
Transaction with non-controlling interest                         -              -                 -             -    
reserve movement                                                                                                      
B-BBEE transaction                                                -              -                 -             -    
Non-controlling interest acquired                                 -              -                 -             -    
Non-controlling interest disposed of                              -              -                 -             -    
Dividends paid                                                    -       (349 804)                -             -    
Balance as at 31 May 2018                                 7 844 847      4 283 854        (1 843 912)       84 662    
1 Other reserves include foreign currency translation reserve and the non-distributable reserve.             
2 The transactions with non-controlling interest reserve relates to the excess payments over the carrying amounts arising on 
  transactions with non-controlling shareholders as these are treated as equity participants.
3 Includes employee equity compensation benefit reserve.
4 This relates to a put option that the Group has on the remaining 40% shareholding in AV Technology Limited.
5 This relates to a put option that the Group has on the remaining 40% shareholding in Airvantage Proprietary Limited.
6 The B-BBEE transaction was concluded by Panacea Mobile Proprietary Limited and Simigenix Proprietary Limited (the companies), 
  subsidiaries of Blue Label Telecoms. In October 2017 the companies declared dividends to the full value of the companies to 
  Blue Label Telecoms. Such dividends were immediately converted to preference shares. Subsequent to this, the companies issued 
  shares to Bitsana Investments Proprietary Limited for nominal value. The Group has not recognised this dilution and accounts 
  for the companies as wholly owned subsidiaries until the preference shares have been settled in full. The preference shares 
  will be settled through the declaration of dividends by the companies. There are no specified dates for this.
# As a result of the revised guidance in Circular 2/2017 the Group has restated its comparative financial information for 
  changes in accounting policies. The effects of this change have already been taken into account in the reported 
  May 2018 results.
  
Unaudited condensed Group ststement of changes in equity (continued)
                                                        Transactions                                              
                                                                with                                              
                                                                non-                                              
                                                         controlling      Share-based             Non-            
                                                            interest          payment      controlling          Total       
                                                            reserve2         reserve3         interest         equity     
                                                           Unaudited        Unaudited        Unaudited      Unaudited     
Six months ended                             Note              R'000            R'000            R'000          R'000     
Opening balance as                                       (1 069 268)           49 542          156 917      9 506 642    
at 1 June 2018                                                                                                           
Adjustment on the initial                       6                 -                 -           (1 437)       (97 325)   
application of IFRS 9                                                                                                    
Adjustment on the initial                       6                 -                 -                -          9 717    
application of IFRS 15                                                                                                   
Adjusted opening balance                                 (1 069 268)           49 542          155 480      9 419 034    
as at 1 June 2018                                                                                                        
Net loss for the period                                           -                 -           18 937        (97 595)   
Other comprehensive income                                        -                 -             (295)        17 029    
Total comprehensive (loss)/income                                 -                 -           18 642        (80 566)   
Dividends paid                                                    -                 -          (28 553)       (28 553)   
Treasury shares purchased                                         -                 -                -        (42 394)   
Equity compensation benefit scheme                                -           (19 914)            (638)             -    
shares vested                                                                                                            
Equity compensation benefit movement                              -             2 479              197          2 676    
Acquisition of non-controlling interests                          -                 -           39 768         39 768    
Transaction with non-controlling interest                 (62 784)4                 -                -        (62 784)   
reserve movement                                                                                                         
Share buy back                                                    -                 -                -       (224 006)   
Balance as at 30 November 2018                           (1 132 052)           32 107          184 896      9 023 175    
Balance as at 1 June 2017                                  (975 302)           46 420           67 137      4 995 284    
Restated net profit for the period#                               -                 -           51 098      1 401 359    
Other comprehensive income                                        -                 -               36          8 795    
                                                                                                                         
Total comprehensive income                                        -                 -           51 134      1 410 154    
Dividends paid                                                    -                 -          (21 100)      (370 904)   
Treasury shares purchased                                         -                 -                -        (28 846)   
Equity compensation benefit scheme                                -           (21 363)            (290)             -    
shares vested                                                                                                            
Equity compensation benefit movement                              -            12 969              364         13 333    
Disposal of non-controlling interests                             -                 -           (2 824)        (2 824)   
Issue of shares                                                   -                 -                -      3 010 593    
Restated balance as at 30 November 2017#                   (975 302)           38 026           94 421      9 026 790    
                                                                                                                         
                                                            Audited           Audited          Audited        Audited    
Year ended                                                    R'000             R'000            R'000          R'000    
Balance as at 1 June 2017                                  (975 302)           46 420           67 137      4 995 284    
Net profit for the year                                           -                 -           53 685      1 047 309    
Other comprehensive income/(loss)                                 -                 -             (465)       (22 839)   
Total comprehensive income/(loss)                                 -                 -           53 220      1 024 470    
Treasury shares purchased                                         -                 -                -        (28 846)   
Shares issued                                                     -                 -                -      3 932 834    
Transaction costs on shares issued                                -                 -                -        (34 663)   
Equity compensation benefit scheme                                -           (21 362)            (289)             -    
shares vested                                                                                                            
Equity compensation benefit movement                              -            23 084              778         23 862    
Transaction with non-controlling interest                 (93 966)5                 -                -        (93 966)   
reserve movement                                                                                                         
B-BBEE transaction                                                -            1 4006                -          1 400    
Non-controlling interest acquired                                 -                 -           66 645         66 645    
Non-controlling interest disposed of                              -                 -           (2 824)        (2 824)   
Dividends paid                                                    -                 -          (27 750)      (377 554)   
Balance as at 31 May 2018                                (1 069 268)           49 542          156 917      9 506 642    
1 Other reserves include foreign currency translation reserve and the non-distributable reserve.           
2 The transactions with non-controlling interest reserve relates to the excess payments over the carrying amounts arising on 
  transactions with non-controlling shareholders as these are treated as equity participants.
3 Includes employee equity compensation benefit reserve.
4 This relates to a put option that the Group has on the remaining 40% shareholding in AV Technology Limited.
5 This relates to a put option that the Group has on the remaining 40% shareholding in Airvantage Proprietary Limited.
6 The B-BBEE transaction was concluded by Panacea Mobile Proprietary Limited and Simigenix Proprietary Limited (the companies), 
  subsidiaries of Blue Label Telecoms. In October 2017 the companies declared dividends to the full value of the companies to 
  Blue Label Telecoms. Such dividends were immediately converted to preference shares. Subsequent to this, the companies issued 
  shares to Bitsana Investments Proprietary Limited for nominal value. The Group has not recognised this dilution and accounts 
  for the companies as wholly owned subsidiaries until the preference shares have been settled in full. The preference shares 
  will be settled through the declaration of dividends by the companies. There are no specified dates for this.
# As a result of the revised guidance in Circular 2/2017 the Group has restated its comparative financial information for 
  changes in accounting policies. The effects of this change have already been taken into account in the reported 
  May 2018 results.


Notes to the unaudited condensed Group

1. Segmental summary
                                                                      Africa                                                      
                                                        Total   Distribution   International      Mobile   Solutions   Corporate  
                                                    Unaudited      Unaudited       Unaudited   Unaudited   Unaudited   Unaudited  
   Six months ended 30 November 2018                    R'000          R'000           R'000       R'000       R'000       R'000    
   Total segment revenue                           16 975 493     16 579 987          12 940     169 407     106 326     106 833    
   Internal revenue                                (4 673 776)    (4 562 065)              -      (3 968)       (910)   (106 833)   
   Revenue                                         12 301 717     12 017 922          12 940     165 439     105 416           -    
   Operating profit/(loss) before depreciation,       379 168        318 065          26 700      48 580      21 978     (36 155)   
   amortisation and impairment charges                                                                                              
   Net (loss)/profit for the period attributable     (116 532)      (135 565)         19 570      29 447      25 155     (55 139)   
   to equity holders of the parent                                                                                                  
   Amortisation on intangibles raised through          33 658         30 140           2 688         830           -           -    
   business combinations net of tax and                                                                                             
   non-controlling interest                                                                                                         
   Headline earnings adjustments net of               (22 520)       (22 366)           (143)        (11)          -           -    
   non-controlling interest                                                                                                         
   Core headline earnings for the                                                                                     
   period attributable                               (105 394)      (127 791)         22 115      30 266      25 155     (55 139)   
   to equity holders of the parent                                                                                                  
   At 30 November 2018                                                                                                              
   Total assets                                    19 173 728     17 715 570         697 563     558 150     170 321      32 124    
   Net operating assets/(liabilities)                 688 178        673 878         114 073      24 961      41 200    (165 934)   
   Six months ended 30 November 2017                                                                                                
   Total segment revenue                           17 150 096     16 755 138               -     178 848     103 577     112 533    
   Internal revenue                                (3 516 654)    (3 397 307)              -      (5 860)       (954)   (112 533)   
   Revenue                                         13 633 442     13 357 831               -     172 988     102 623           -    
   Operating profit/(loss) before depreciation,       768 475        732 048          22 203      47 283      24 442     (57 501)   
   amortisation and impairment charges                                                                                              
   Net profit/(loss) for the period attributable    1 350 261      1 383 659         (17 539)     26 433      13 715     (56 007)   
   to equity holders of the parent                                                                                                  
   Amortisation on intangibles raised through          13 987         12 047             825       1 115           -           -    
   business combinations net of tax and                                                                                             
   non-controlling interest                                                                                                         
   Headline earnings adjustments net of                (6 019)          (814)         (5 164)        (36)         (5)          -    
   non-controlling interest                                                                                                         
   Core headline earnings for the                                                                                     
   period attributable                              1 358 229      1 394 892         (21 878)     27 512      13 710     (56 007)   
   to equity holders of the parent                                                                                                  
   At 30 November 2017                                                                                                              
   Total assets                                    15 262 129     13 772 880         792 031     564 755     126 566       5 897    
   Net operating (liabilities)/assets                (491 030)      (631 138)         51 074      62 418      35 600      (8 984)   
                                                                                                                                    
                                                      Audited        Audited         Audited     Audited     Audited     Audited    
   Year ended 31 May 2018                               R'000          R'000           R'000       R'000       R'000       R'000    
   Total segment revenue                           33 633 266     32 897 392               -     370 358     196 762     168 754    
   Internal revenue                                (6 833 001)    (6 652 186)              -     (10 388)     (1 673)   (168 754)   
   Revenue                                         26 800 265     26 245 206               -     359 970     195 089           -    
   Operating profit/(loss) before depreciation,     1 340 153      1 344 824          (2 903)    101 883      42 838    (146 489)   
   amortisation and impairment charges                                                                                              
   Net profit/(loss) for the year attributable        993 624      1 344 642        (227 000)     57 609      29 836    (211 463)   
   to equity holders of the parent                                                                                                  
   Amortisation on intangibles raised through          44 345         40 852           1 549       1 944           -           -    
   business combinations net of tax and                                                                                             
   non-controlling interest                                                                                                         
   Headline earnings adjustments net of                (5 953)          (755)         (5 164)        126         (22)       (138)   
   non-controlling interest                                                                                                         
   Core headline earnings for the                                                                                     
   year attributable                                1 032 016      1 384 739        (230 615)     59 679      29 814    (211 601)   
   to equity holders of the parent                                                                                                  
   At 31 May 2018                                                                                                                   
   Total assets                                    17 930 951     16 671 589         518 045     561 330     146 672      33 315    
   Net operating assets/(liabilities)               1 848 117      1 758 210          94 701      62 036      36 780    (103 610)   
   
   2.  Revenue
                                                      Six months        Six months             Year    
                                                           ended             ended            ended    
                                                     30 November       30 November           31 May    
                                                            2018              2017             2018    
                                                       Unaudited         Unaudited          Audited    
                                                           R'000             R'000            R'000    
    Revenue from contracts with customers             12 041 879        13 633 442       26 628 637    
    Prepaid airtime, data and related revenue          9 651 183        12 387 119       22 968 967    
    Postpaid airtime, data and related revenue            78 187            54 028          110 535    
    Prepaid and postpaid SIM cards                       603 092           425 555          889 001    
    Services                                             331 717           311 157          629 667    
    Electricity commission                               190 470           154 325          299 850    
    Handsets, tablets and other devices                1 092 645           239 233        1 586 817    
    Other revenue                                         94 585            62 025          143 800    
    Finance revenue                                      259 838                 -          171 628    
                                                      12 301 717        13 633 442       26 800 265  
    
The Africa distribution segment contributed to each of the above revenue categories. The majority of revenue contributed 
by the Solutions and Mobile segments are within Services. The International segment contributed revenue only to Finance 
revenue. Refer to note 1, Segmental summary, for a disaggregation of revenue contribution by each segment.

On adoption of IFRS 15 Revenue from Contracts with Customers, the revenue recognition on the sale of certain handsets, 
postpaid airtime and prepaid and postpaid SIM cards has changed. Refer to note 6.

3.  Financial instruments
    Financial instruments at fair value through profit or loss are classified as level 3 instruments in the fair value 
    hierarchy.
    Changes in level 3 instruments are as follows:
                                                                   Liquidity
                                                  Bond notes         support        Loans at        
                                                       (SPV1)          (SPV2)     fair value       Other           Total
                                                       R'000           R'000           R'000       R'000           R'000
    Opening balance as at 1 June 2018                167 519         (45 360)              -         625         122 784    
    Reclassification from financial assets                 -               -         361 160           -         361 160    
    at amortised cost to financial assets                                                                                   
    at fair value through profit or loss                                                                                    
    Additions                                              -          53 229               -           -          53 229    
    Fair value loss recognised in profit             (46 823)       (445 816)              -        (613)       (493 252)   
    or loss (unrealised)                                                                                                    
    Closing balance as at 30 November 2018           120 696        (437 947)        361 160          12          43 921    
    Financial assets at fair value through           120 696               -         361 160          12         481 868    
    profit or loss                                                                                                          
    Financial liabilities at fair value                    -        (437 947)              -           -        (437 947)  
    through profit or loss                                                                                                    
    Closing balance as at 30 November 2018           120 696        (437 947)        361 160          12          43 921    
    
    Bond notes and liquidity support
    With effect from 2 August 2017 The Prepaid Company purchased bond notes, issued by Cedar Cellular Investments 1 
    Proprietary Limited (SPV1), from Saudi Oger Limited with a capital redemption value of USD42 million and with a 
    coupon rate of 8.625% per annum for a purchase consideration of USD18 million. The Prepaid Company was entitled 
    to assign its rights and obligations, in whole or in part, to a nominee. Accordingly, it has assigned such rights 
    and obligations in respect of 50% of the bond notes, resulting in an effective purchase consideration of 
    USD9 million with a capital redemption value of USD21 million.
   
    As part of the restructure of the debt into Cell C Limited (Cell C) by third-party lenders, The Prepaid Company will 
    be required to provide liquidity support to Magnolia Cellular Investment 2 (RF) Proprietary Limited (SPV2), which is 
    100% held by 3C Telecommunications Proprietary Limited, of up to USD80 million, which liquidity support will be 
    provided over 24 months and will be in the form of subordinated funding to SPV2. Oger Telecoms contributed 
    USD36 million of the aforesaid USD80 million thus reducing The Prepaid Company's obligation in this regard to a 
    maximum of USD44 million. As at 30 November 2018, the Group had contributed USD4 million to SPV2.
    
    Fair value estimate
    SPV1 and SPV2 own 11.8% and 16% of the shares issued by Cell C respectively. No other assets are held by these entities, 
    and as such the Group's bond note and liquidity support arrangements will be settled only when the value of the Cell C 
    shares are realised by SPV1 and SPV2. The substance of these arrangements are therefore derivatives exposing the Group 
    to the share price of Cell C.
    
    The derivatives are initially recognised by the Group at fair value and subsequently measured at fair value through profit 
    or loss.
    
    The derivatives are not traded in an active market and therefore the fair value is determined by the use of a valuation 
    technique. The finance department of the Group includes a team that outsources the valuation to a qualified independent 
    third-party valuation specialist. This team reports directly to the Financial Director (FD) and the Audit, Risk and 
    Compliance Committee (ARCC). The valuation was performed using a binomial model taking into account the value of Cell C 
    and an expected exit event date of Cell C in the second quarter of 2020. As both arrangements are USD denominated, the 
    model accounts for the forward rate of the USD at the expected listing date.
    
    As at 30 November 2018, a qualified independent third-party specialist determined the value of Cell C to be R13.4 billion. 
    As a result, an unrealised fair value loss totalling R493 million was recognised in the current period, of which 
    R47 million related to SPV1 and R446 million to SPV2. The remaining exposure to these derivatives is R121 million and 
    R102 million respectively.
    
    The following table illustrates the sensitivity of the valuation of Cell C used to value the derivatives:
    
                                              Movement       Movement          
                                               in fair        in fair              Total     
                              Change to       value of       value of           movement     
    Unobservable input           inputs           SPV1           SPV2      in fair value   
                                                 R'000          R'000              R'000
    Valuation of Cell C              5%          5 990         27 666             33 656    
                                    (5%)        (5 999)       (19 990)           (25 989)    
    
    Loans at fair value
    Blue Label acquired a 48% share in Glocell Distribution Proprietary Limited (Glocell) on 30 June 2018 (refer to note 5). 
    Following the acquisition, and due to new contractual arrangements with the remaining shareholders of Glocell, trade 
    receivables to the value of R361 million held at amortised cost have been restructured, exposing the Group to the share 
    price of Glocell and therefore have been reclassified to financial assets at fair value through profit or loss.
   
    Fair value estimate
    A discounted cash flow valuation of Glocell has been used to determine the fair value of the loan at fair value. This 
    valuation has been performed by the finance department of the Group using cash flow projections based on forecasts for up
    to five years which are based on assumptions of the business, industry and economic growth.
    
    The key assumptions used in the valuation calculation and their sensitivities are as follows:
                                                                            Growth rate       Discount rate    
                                                                                       %                  %    
    Key assumption applied to value-in-use calculation                              5.00              19.48    
    Change in key assumption that would give rise to a fair value loss             (0.78)              0.46    
    
    The headroom in the valuation calculated and the Group carrying value is R19.8 million.
    
    Financial liabilities
    Put option liability (included in trade and other payables)
    Put option liabilities represent contracts that impose an obligation on the Group to purchase the shares of a subsidiary 
    for cash or another financial asset. Put option liabilities are initially raised from the transaction with non-controlling 
    interest reserve in equity at the present value of the expected redemption amount payable. Subsequent revisions to the 
    expected redemption amount payable as well as the unwinding of the discount related to the measurement of the present value 
    of the put option liability, are recognised in the income statement. Where a put option liability expires unexercised or is 
    cancelled, the carrying value of the financial liability is released to the transaction with non-controlling interest reserve 
    in equity. The Group recognises the non-controlling interest over which a put option exists at acquisition date. Put option 
    liabilities are presented within trade and other payables in the Group statement of financial position.
    
    Changes in level 3 instruments are as follows:
    
                                                            Six months       Six months          Year    
                                                                 ended            ended         ended    
                                                           30 November      30 November         1 May    
                                                                  2018             2017          2018    
                                                             Unaudited        Unaudited       Audited    
                                                                 R'000            R'000         R'000    
    Opening balance                                             97 947                -             -    
    Acquisition of Airvantage Proprietary Limited#                   -                -        93 966    
    Acquisition of AV Technology Limited##                      62 784                                   
    Remeasurements recognised in the income statement           (9 798)               -         3 981    
    Closing balance                                            150 933                -        97 947    
     # This relates to a put option that the Group has on the remaining 40% shareholding in Airvantage Proprietary Limited. 
       This is exercisable within the next six months. The Group will settle this from available cash resources. The option 
       is valued based on the forecast net profit after tax for 12 months ending 28 February 2019 at a six multiple, initially 
       present valued to the date of the acquisition 2 January 2018, as per the contract.
    ## This relates to a put option that the Group has on the remaining 40% shareholding in AV Technology Limited. This is 
       exercisable within the next six months. The Group will settle this from available cash resources. The option is valued 
       based on the forecast net profit after tax for 12 months ending 28 February 2019 at a six multiple, initially present 
       valued to the date of the acquisition 1 August 2018, as per the contract. Refer to note 5.
    
    The sensitivities of the put options in aggregate are as follows:
                                                                          Increase/(decrease) in put option liabilities     
                                                                                and loss/(gain) in the income statement    
    1% increase in discount rate, 10% decrease in net profit after tax                                          (15 765)   
    1% decrease in discount rate, 10% increase in net profit after tax                                           15 919    
    
4.  Investments
4.1 Investments in and loans to venture capital associates and joint venture
                                                               Six months       Six months           Year       
                                                                    ended            ended          ended      
                                                              30 November      30 November         31 May     
                                                                     2018             2017           2018       
                                                                Unaudited        Unaudited        Audited    
                                                                    R'000            R'000          R'000      
    Venture capital associates and joint venture                  156 095          292 266        142 981    
    Loan to venture capital associates and joint venture          147 276          275 221        134 854    
                                                                  303 371          567 487        277 835    

    The exemption available in IAS 28 - Investments in Associate and Joint Ventures has been applied to the investment in 
    Oxigen Services India, Oxigen Online (Oxigen group) and 2DFine Holdings Mauritius from 30 November 2016 and the investment 
    is now accounted for in accordance with IAS 39 - Financial Instruments: Recognition and Measurement at fair value with 
    changes in fair value recognised in profit or loss. The differential between the carrying amount of the investment 
    (previously equity accounted for) and the fair value at this date is reflected as a gain on associate measured at fair 
    value in the reviewed condensed Group statement of comprehensive income. Any additional changes in the fair value are 
    recognised in the Group statement of comprehensive income. The fair value gain recognised in the Group statement of 
    comprehensive income for the period ended was R13 million (2017: R0.7 million gain).

    Prior to 30 November 2016, the investment in Oxigen Services India was of a strategic nature, as it was it was expected 
    to emulate the business model of the South African distribution operations. The original decision to invest in this 
    business was because it was strategically aligned with other Blue Label distribution businesses in South Africa. 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 in value in the future and the Group is pursuing this new strategy with respect to 
    its investment in Oxigen Services India. In line with the Group's exit strategy, Oxigen Services India was demerged 
    into two separate entities with effect from 1 June 2016. This was implemented to improve the marketability of these 
    entities to potential investors.

    2DFine Holdings Mauritius is an investment holding company that holds an interest in Oxigen Services India and Oxigen 
    Online. Consequently, management reviews the results and operations of Oxigen Services India, Oxigen Online and 2DFine 
    Holdings Mauritius on a fair value basis as opposed to the profits/losses that they generate. In addition, management 
    has established an exit strategy with a view to realising this fair value in the foreseeable future.

    Accordingly Oxigen Services India, Oxigen Online and 2DFine Holdings Mauritius are viewed as a venture capital investment 
    which, in accordance with IAS 28 - Investments in Associates and Joint Ventures has been accounted for at fair value 
    through profit or loss from 30 November 2016 at which date equity accounting ceased.

    Fair value estimate
    The finance department of the Group includes a team that outsources the valuations to a qualified independent third-party 
    valuation specialist required for financial reporting purposes, including level 3 fair values. This team reports directly 
    to the FD and the ARCC. Discussions of valuation processes and results are held between the FD, ARCC and the valuation 
    team at least once every six months, in line with the Group's reporting periods.
    
    In the current period management has taken the inputs from the qualified independent third-party valuation specialist 
    and adjusted the inputs for corporate transactions currently in progress.

    The investments in venture capital associates and joint venture are classified as level 3 valuations in the fair value 
    hierarchy.

    In terms of IFRS 13 - Fair Value Measurement, the market approach has been utilised in determining the fair value of Oxigen 
    Services India and Oxigen Online. This approach utilises relevant information generated by similar market transactions that 
    have been concluded by comparable businesses. The valuation is based on a multiple applied to gross revenue, based on the 
    same principles adopted by similar businesses to that of the Oxigen group, that were recently disposed of. The adjusted 
    revenue multiple of 4.3 (2017: 5.1 to historical revenues) was applied to future revenues in determining the fair value.
    
    The following table summarises the quantitative information about the significant unobservable inputs used in the level 3 
    fair value measurement for this investment.

                                      Change
    Unobservable input             to inputs         Movement
    Revenue multiple                     0.2           11 929  
                                         0.1            6 288  
                                        (0.1)          (4 993) 
                                        (0.2)         (10 634) 
                                        (0.3)         (16 274) 

    Critical accounting judgements and assumptions
    A corporate transaction that is in progress has been taken into account in determining the fair value of the Oxigen group. 
    However, should this transaction not materialise, the fair value of the Oxigen group would reduce significantly. The full 
    fair value of and loans to the Oxigen group would be required to be written down through profit or loss. In addition, the 
    Group has provided guarantees amounting to USD8 million on behalf of the Oxigen group, which the Group would have to honour 
    should the corporate transaction not materialise.

4.2 Impairment of investments in and loans to associates and joint venture
    The fair value movements on the derivatives related to SPV1 and SPV2 which are linked to Cell C's fair value triggered the 
    need to perform an impairment test on the Group's investment in Cell C. In addition, management also performed an impairment 
    test on the Group's investment in Blue Label Mexico due to the losses incurred in that company.

    The recoverable amount has been determined as the higher of fair value less cost of disposal and the value-in-use.

    Cell C
    The fair value less cost of disposal has been used to value Cell C. The fair value was determined using a discounted cash 
    flow valuation technique which uses cash flow projections based on a forecast approved by the Board of Directors for the 
    forthcoming year and forecasts for up to five years. These forecasts include cash flows based on the successful execution 
    of a corporate transaction. These cash flows are then discounted at an appropriate rate incorporating a risk premium for 
    the outcome of a corporate transaction being successful.

    Blue Label Mexico
    The value-in-use has been used to value Blue Label Mexico. These value-in-use calculations use cash flow projections based 
    on financial budgets approved by the Board of Directors for the forthcoming year and forecasts for up to five years which 
    include assumptions of the business, industry and economic growth.

    The key assumptions used for the valuation calculations are as follows:
                                                Growth rate       Discount rate     
                                                          %                   %    
    Cell C Limited                                      5.1               18.35    
    Blue Label Mexico S.A. de C.V.                      3.5               20.60    

    The discount rates used are pre-tax and reflect specific risks relating to the relevant associate and joint venture. The 
    growth rate is used to extrapolate cash flows beyond the budget period. The growth rates are consistent with publicly 
    available information relating to long-term average growth rates for each of the markets in which the companies operate.

    The inputs used when calculating the valuations would need to be increased/(decreased) by the following amounts before 
    any impairment would need to be recognised:

                                                Growth rate       Discount rate     
                                                          %                   %    
    Cell C Limited                                    (0.15)                0.1    
    Blue Label Mexico S.A. de C.V.                     (7.1)                3.6    
    The headroom between the valuations calculated and the Group carrying value is as follows:

                                                                    Excess over     
                                                                 carrying value    
                                                                          R'000    
    Cell C Limited                                                       49 343    
    Blue Label Mexico S.A. de C.V.                                       32 928    

    Based on the impairment testing performed, the Group has concluded that no impairment is necessary.

    In order to mitigate further losses in Blue Label Mexico, major rationalisation and restructure programmes 
    were implemented with effect from December 2018. These measures should result in a return to profitability.

    Critical accounting judgements and assumptions
    In determining the future cash flows of Cell C, management has applied their judgement, in conjunction with taking 
    into account the likelihood of corporate transactions being successful, that no impairment to the carrying value of 
    the investment in Cell C is required. However, should these corporate transactions not materialise an impairment to 
    the carrying value of the investment may well have to be recognised.

5.  Acquisition of subsidiaries
    The Group acquired shares in the following subsidiaries during the current period:
                                                                                                   Effective            
                                                                                                      date of             %    
                                                                                                  acquisition      acquired
    Subsidiaries                                                                                                               
    Glocell Distribution Proprietary Limited                                                     30 June 2018           48%    
    Distributor of airtime, starter packs and mobile phones through its retail outlets and                                     
    to wholesale customers in South Africa, including postpaid and prepaid contracts                                           
    AV Technology Limited                                                                       1 August 2018           60%    
    Owner of retail stores trading in cellular handsets, tablets and related accessories,                                      
    as well as SIM cards, post-paid and pre-paid contracts                                                                     
    Lornanox Proprietary Limited                                                                 31 July 2018          100%    
    Owner of retail stores (subsequently rebranded WiConnect) trading in cellular
    handsets, tablets and related accessories, as well as SIM cards, postpaid and
    prepaid contracts

    Details of the total net assets acquired and the resulting goodwill as at the date of acquisition are as follows:
                                                                                Glocell         
                                                                           Distribution                AV          Lornanox     
                                                                            Proprietary        Technology       Proprietary    
                                                                                 Limited          Limited           Limited    
                                                                                   R'000            R'000             R'000
    Total purchase consideration                                                 173 398           84 187             5 000    
    Provisional fair value of net assets acquired                                 15 239           34 889           (40 587)   
    Goodwill                                                                     158 159           49 298            45 587    

    The provisional assets and liabilities acquired through acquisition are as follows:
                                                   Glocell Distribution                 AV Technology              Lornanox Proprietary
                                                   Proprietary Limited                    Limited                       Limited
                                                                  Acquirer's                      Acquirer's                       Acquirer's 
                                                                 provisional                     provisional                      provisional 
                                                 Provisional        carrying      Provisional       carrying       Provisional       carrying 
                                               fair value at       amount on    fair value at      amount on     fair value at      amount on 
                                                 acquisition     acquisition      acquisition    acquisition       acquisition    acquisition 
                                                        date            date             date           date              date           date 
                                                       R'000           R'000            R'000          R'000             R'000          R'000 
    Cash and cash equivalents                          5 978           5 978           65 442         65 442            10 605         10 605 
    Property, plant and equipment                      4 086           4 086                -              -            39 251         39 251 
    Intangible assets                                 54 529          31 736           78 059            440                 -              - 
    Goodwill                                         158 159               -           49 298              -            45 587              - 
    Inventories                                        7 267           7 267                -              -            34 255         34 255 
    Receivables                                       14 677          14 677           10 039         10 039            29 659         29 659 
    Deferred tax                                      (6 382)              -          (21 733)             -             6 880         18 067 
    Borrowings                                             -               -                -              -          (104 529)     (144 481) 
    Payables                                         (48 407)        (48 407)         (73 658)       (73 658)          (56 709)       (56 709)
    Provisional value of 
    subsidiaries acquired                            189 907          15 337          107 447          2 263             4 999        (69 353)
    Non-controlling interest                                          (7 975)                           (905)                                -
    Provisional value of net 
    assets acquired                                                    7 362                           1 358                          (69 353)
    Total purchase consideration                                     173 398                          84 187                            5 000 
    Less: trade receivables 
    capitalised                                                     (173 398)                              -                                - 
    Cash and cash equivalents in 
    subsidiary acquired                                               (5 978)                        (65 442)                         (10 605)
    Cash (inflow)/outflow from acquisitions                           (5 978)                         18 745                           (5 605)

    Glocell Distribution Proprietary Limited (Glocell) and Lornanox Proprietary Limited (Lornanox) were purchased with 
    the objective of affording the Group access to new channels for the supply and distribution of airtime, mobile 
    devices and contracts. AV Technology Limited (AV Technology) gives the Group the ability to advance airtime, data 
    and mobile money services to mobile network subscribers in Africa.

    In most business acquisitions, there is a part of the cost that is not capable of being attributed in accounting 
    terms to identifiable assets and liabilities acquired and is therefore recognised as goodwill. In the case of the 
    above acquisitions, this goodwill is underpinned by a number of elements, which individually cannot be quantified. 
    Most significant among these in Glocell and Lornanox is the opportunity that the distribution network affords the 
    Group. Most significant in AV Technology is the opportunity that the prepaid airtime advance system affords the 
    Group.

6.  Change in accounting policies
    Circular 2/2017
    During the year ended 31 May 2018, the South African Institute of Chartered Accountants issued Circular 2/2017 which 
    replaced Circular 9/2006. Circular 9/2006 - Transactions giving rise to adjustments to revenue/purchases previously 
    included guidance on the recognition of financing elements. Although the Group did not believe that their revenue and 
    purchase transactions constituted financing activities, the Group had previously accounted for its sale and purchase 
    transactions as including a financing element based on the guidance in Circular 9/2006.

    Subsequent to the issuing of Circular 9/2006, the International Financial Reporting Standards Interpretations Committee 
    (Interpretations Committee) had debated financing elements contained within transactions for both revenue and purchases 
    under the current accounting standards (IAS 2 - Inventories and IAS 18 - Revenue). Circular 2/2017 considers these 
    developments and updates the previous guidance contained in Circular 9/2006 relating to financing elements of revenue 
    and purchases. Circular 2/2017 repeals the guidance in Circular 9/2006 that deals with extended payment terms (paragraphs 
    23 to 30).

    As a result of the revised guidance in Circular 2/2017, the Group reconsidered its accounting policy with respect to 
    financing components included in its sale and purchase transactions in the ordinary course of business. In line with 
    the guidance contained in Circular 2/2017, in particular the indicators provided in paragraph 7 of the Circular, the 
    Group concluded that there is no financing component included in its sale and purchase transactions that occur in the 
    ordinary course of business. In accordance with IAS 8, the Group has accordingly restated its comparative financial 
    information for the period ended 30 November 2017 for this change in accounting policy.

    Group statement of financial position
    As at                                                                                    Previously 
                                                             Restated                          reported 
                                                             November                          November 
                                                                 2017      Adjustments             2017 
                                                                R'000            R'000            R'000 
    Assets                                                                                              
    Non-current assets                                      9 589 037                -        9 589 037 
    Current assets                                          5 673 092           11 505        5 661 587 
    Trade and other receivables                             3 049 105           11 505        3 037 600 
    Total assets                                           15 262 129           11 505       15 250 624 
    Equity and liabilities                                                                              
    Capital and reserves                                    9 026 790           (7 709)       9 034 499 
    Retained earnings                                       4 640 491           (7 709)       4 648 200 
    Non-current liabilities                                    71 217           (2 998)          74 215 
    Deferred taxation liabilities                              66 463           (2 998)          69 461 
    Current liabilities                                     6 164 122           22 212        6 141 910 
    Trade and other payables                                6 073 592           22 212        6 051 380 
    Total equity and liabilities                           15 262 129           11 505       15 250 624 

    Group income statement
    For the period ended                                                                     Previously    
                                                             Restated                          reported    
                                                             November                          November     
                                                                 2017      Adjustments             2017    
                                                                R'000            R'000            R'000    
    Revenue                                                13 633 442           83 745       13 549 697    
    Changes in inventories of finished goods              (12 492 195)         (93 571)     (12 398 624)   
    Operating profit                                          708 013           (9 826)         717 839    
    Finance costs                                            (126 431)          91 191         (217 622)   
    Finance income                                             69 074          (79 352)         148 426    
    Net profit before taxation                              1 591 797            2 013        1 589 784    
    Taxation                                                 (190 438)            (564)        (189 874)   
    Net profit for the year                                 1 401 359            1 449        1 399 910    
    Net profit for the year attributable to:                                                               
    Equity holders of the parent                            1 350 261            1 449        1 348 812    
    Earnings per share for profit attributable to:                                                         
    Equity holders (cents)                                                                                 
    - Basic                                                    167.61             0.18           167.43    
    - Diluted                                                  149.83             0.18           149.65    
    The change in accounting policy had no impact on the Group cash flow statement.

    IFRS 15 - Revenue from Contracts with Customers
    IFRS 15 replaces both IAS 11 and IAS 18 as well as SIC 31, IFRIC 13, IFRIC 15 and IFRIC 18 and establishes a 
    comprehensive framework for recognition of revenue from contracts with customers. Revenue is recognised when 
    a customer obtains control of the goods or services. Determining the timing of the transfer of control - at 
    a point in time or over time - requires a certain level of judgement.

    On application of IFRS 15, the following material changes and considerations have been made:

    Revenue category        Nature of material considerations and changes in accounting policy
    Postpaid airtime,       Due to the change in considerations for the recognition of principal versus agent under IFRS 15,   
    data and related        revenue relating to certain contracts that were previously recognised as agent at a point in time, 
    revenue                 are now accounted for as principal and over the term of the contract (generally 24 months). This   
                            new treatment aligns with the majority of revenue that was recognised in this category, both       
                            under IAS 18 and now under IFRS 15. The effect of this change in the current year income           
                            statement due to a change in timing of revenue recognition reduces net profit after tax attributable 
                            to equity holders of the parent by R15 million.

    Prepaid and             The Group earns activation and ongoing revenue on starter packs that have been distributed to    
    postpaid SIM            prepaid customers. Under IFRS 15, the recognition of ongoing revenue requires a certain level of 
    cards                   judgement (refer to critical accounting judgements and assumptions below) and the Group has      
                            concluded that the treatment remains unchanged. However, the initial sale of starter packs is    
                            now deemed to have a financing element under IFRS 15. As such revenue is recognised at the       
                            point of sale of starter packs taking into account the time value of money. The unwinding of the 
                            corresponding trade receivables balance is recognised in revenue, resulting in an immaterial effect
                            on the group statement of comprehensive income.

    Sale of handsets,       Due to the change in considerations for the recognition of principal versus agent under IFRS 15,  
    tablets and other       revenue relating to the sale of handsets under certain contracts that were previously recognised  
    devices                 as principal are now accounted for as agent. In general, the sale of handsets, tablets and devices
                            remain as principal under IFRS 15 as they were historically under IAS 18. The effect of this      
                            change due to IFRS 15 on the current year group statement of comprehensive income is only a       
                            reclassification between revenue and changes in inventories of finished goods to the value of     
                            R672 million. The gross profit effect of this change is nil.

    Income from             Nature of material considerations and changes in accounting policy
    associates and
    joint ventures

    Contract and            The Group capitalises costs incurred in obtaining contract customers. These costs were previously 
    equipment               expensed under IAS 18. The Group recognises the costs of obtaining and fulfilling a contract as an
    revenue in              intangible asset only when the costs:
    associate               - relate directly to an existing contract or specified anticipated contract;
                            - generate or enhance the resources of the Group that will be used to satisfy performance
                              obligations in the future; and
                            - are expected to be recovered

                            The Group adopted the practical expedient and expenses costs incurred in obtaining a contract
                            with customers when the contract is less than a year.

                            This has been the most significant impact on the income from associates and joint venture line item
                            in the statement of comprehensive income.

    Revenue                 Critical accounting judgements and assumptions
    category
    
    Prepaid and             The Group earns ongoing revenue on starter packs that have been distributed to prepaid customers. The
    postpaid SIM            Group is entitled to ongoing revenue on all future prepaid airtime purchases that a signed-up prepaid customer
    cards - ongoing         makes, even if the subscriber does not top up through Group companies in the future.
    revenue
                            Ongoing revenue earned is variable in nature as the Group's entitlement to these amounts is dependent on the     
                            future spending patterns of the prepaid customers, and therefore contingent on a future event occurring or       
                            not occurring. IFRS 15 requires an entity to estimate the amount of variable consideration it will be entitled to
                            for the contracts it has entered into with its customers and include this in the transaction price at contract   
                            inception, to the extent the variable consideration is not constrained.

                            The Group has concluded that the ongoing revenue is fully constrained at the individual contract level due to
                            the high variability in behaviour of the individual customers, including:
                            - the period over which prepaid customers remain on the same SIM card (this can range from one day to a
                              number of years); and
                            - the spending patterns of individual customers, which is also highly variable.

                            In addition, because the terms of the ongoing revenue structure with the telecommunication companies are
                            regularly up for negotiation, the Group is not able to predict the likelihood or magnitude of a revenue reversal.

                            The Group's policy is therefore only to recognise the variable consideration as revenue as and when it is
                            received because it is only at this point that it is highly probable that a significant reversal in revenue for 
                            that contract will not occur in the future.

    IFRS 9 - Financial Instruments
    IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to 
    buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement.
    
    Classification and measurement of financial assets
    The adoption of IFRS 9 has not had a material impact on the Group's accounting policies related to the classification and 
    measurement of financial assets, financial liabilities and derivative financial instruments.
    Impairment of financial assets
    IFRS 9 replaces the "incurred loss" model in IAS 39 with an "expected credit loss" (ECL) model. The Group has four types of 
    financial assets that are subject to the new ECL model:
    - trade receivables;
    - loans receivable and loans to associates and joint ventures;
    - guarantees; and
    - cash and cash equivalents (immaterial impairment loss identified).
    
    The Group was required to revise its impairment methodology under IFRS 9 for each of these classes of assets. The impact of 
    the change in impairment methodology on the Group's retained earnings is disclosed below.
    
    Trade receivables
    The Group applies the IFRS 9 simplified approach to measuring ECL which uses a lifetime expected loss allowance for all 
    trade receivables. ECLs are calculated by applying a loss ratio to the aged balance of trade receivables at each reporting 
    date. The loss ratio is calculated according to the ageing/payment profile of sales by applying historic/proxy write-offs 
    to the payment profile of the sales population. Trade receivable balances have been grouped so that the ECL calculation is 
    performed on groups of receivables with similar risk characteristics and ability to pay. Similarly, the sales population 
    selected to determine the ageing/payment profile of the sales is representative of the entire population and in line with 
    future payment expectations. The historic loss ratio is then adjusted for forward looking information to determine the ECL 
    for the portfolio of trade receivables at the reporting period.
    
    Loans receivable, loans to associates and joint ventures, and guarantees
    The Group applies the IFRS 9 general approach to measuring expected credit losses which uses a 12-month expected loss 
    allowance for all loans receivables, loans to associates and joint ventures, and guarantees individually. ECLs are 
    calculated by applying a loss ratio to the balance of each loan and guarantee at each reporting date. The loss ratio 
    for loans is calculated according to the ageing/payment profile of loans by applying historic write-offs to the payment 
    profile of the loan population. The loss ratio for guarantees is calculated according to the past history of drawdowns 
    on the financial guarantee contract population. The historic loss ratio is then adjusted for forward looking information 
    to determine the ECL for each loan and guarantee at the reporting period to the extent that there is a strong correlation 
    between the forward looking information and the ECL. To calculate an ECL, management allocates a risk rating to each loan 
    and guarantee. The risk rating is assigned an average cumulative default rate based on management assessing market default 
    rates for emerging markets. This rate is added to the historical loss ratio to determine the ECL of the relevant loan or 
    guarantee. 

    Critical accounting judgements and assumptions
    The ECL for financial assets is based on assumptions about risk of default and expected loss rates. The Group uses judgement 
    in making these assumptions and selecting the input to the impairment calculation, based on the Group's past history, existing 
    market conditions, as well as forward looking estimates at the end of each reporting period.

    IFRS 15 and IFRS 9 transition
    The Group has applied both IFRS 9 - Financial Instruments and IFRS 15 - Revenue from Contracts with Customers using the 
    modified retrospective approach, by recognising the cumulative effect of initially applying IFRS 9 and IFRS 15 as an 
    adjustment to the opening balance of equity at 1 June 2018. Therefore the comparative information on the unaudited 
    condensed Group statement of financial position and unaudited condensed Group statement of comprehensive income has not 
    been restated for the adoption of these new standards and continues to be reported under the previously applied standards.

    In accordance with the requirements of applying the modified retrospective approach under IFRS 9 and IFRS 15, the current 
    financial information has been presented below with adjustments to indicate the Group results had IFRS 9 and IFRS 15 not 
    been adopted.

    Group statement of financial position
    As at                                                                         November   
                                                                                      2018   
                                                                                     under   
                                                                                previously                                           Reported    
                                                                                   applied           IFRS 9          IFRS 15         November      
                                                                                 standards      adjustments      adjustments             2018      
                                                                                     R'000            R'000            R'000            R'000      
    ASSETS                                                                                                                                       
    Non-current assets                                                          10 331 485           80 816         (175 924)      10 426 593    
    Property, plant and equipment                                                  203 648                -                -          203 648    
    Intangible assets                                                            1 168 684                -                -        1 168 684    
    Goodwill                                                                     1 291 529                -                -        1 291 529    
    Investments in and loans to associates and joint ventures                    6 162 270           83 164         (164 994)       6 244 100    
    Investments in and loans to venture capital associates and joint venture       303 371                -                -          303 371    
    Loans receivable                                                                53 827              962                -           52 865    
    Financial assets at fair value through profit or loss                          481 868                -                -          481 868    
    Trade and other receivables                                                    591 434                -                -          591 434    
    Deferred taxation assets                                                        74 854           (3 310)         (10 930)          89 094    
    Current assets                                                               8 864 399           25 995           91 269        8 747 135    
    Inventories                                                                  1 350 442                -                -        1 350 442    
    Loan to associate                                                                    -                -                -                -    
    Loans receivable                                                               180 163           10 235                -          169 928    
    Financial assets at fair value through profit or loss                                -                -                -                -    
    Trade and other receivables                                                  6 349 655           15 760           91 269        6 242 626    
    Current tax assets                                                              34 386                -                -           34 386    
    Cash and cash equivalents                                                      949 753                -                -          949 753    
    Total assets                                                                19 195 884          106 811          (84 655)      19 173 728    
    EQUITY AND LIABILITIES                                                                                                                       
    Capital and reserves                                                         9 042 097          125 478         (106 556)       9 023 175    
    Share capital, share premium and treasury shares                             7 598 999                -                -        7 598 999    
    Restructuring reserve                                                       (1 843 912)               -                -       (1 843 912)   
    Other reserves                                                                 101 986                -                -          101 986    
    Share-based payments                                                            32 107                -                -           32 107    
    Transactions with non-controlling interest reserve                          (1 132 052)               -                -       (1 132 052)   
    Retained earnings                                                            4 098 084          123 489         (106 556)       4 081 151    
                                                                                 8 855 212          123 489         (106 556)       8 838 729    
    Non-controlling interest                                                       186 885            1 989                -          184 896    
    Non-current liabilities                                                      2 103 392                -           11 796        2 091 596    
    Deferred taxation liabilities                                                  285 890                -           11 796          274 094    
    Borrowings                                                                   1 804 250                -                -        1 804 250    
    Trade and other payables                                                        13 252                -                -           13 252    
    Current liabilities                                                          8 050 395          (18 667)          10 105        8 058 957    
    Trade and other payables                                                     5 718 380          (19 770)          10 105        5 728 045    
    Provisions                                                                      42 522                -                -           42 522    
    Financial liabilities at fair value through profit or loss                     437 947                -                -          437 947    
    Current tax liabilities                                                         36 297            1 103                -           35 194    
    Bank overdraft                                                                  10 105                -                -           10 105    
    Borrowings                                                                   1 805 144                -                -        1 805 144    
    Total equity and liabilities                                                19 195 884          106 811          (84 655)      19 173 728    

    Group statement of comprehensive income
    For the period ended                                                          November  
                                                                                      2018  
                                                                                     under  
                                                                                previously                                          Reported
                                                                                   applied          IFRS 9         IFRS 15          November
                                                                                 standards     adjustments     adjustments              2018
                                                                                     R'000           R'000           R'000             R'000
    Revenue                                                                     12 964 380               -         662 663        12 301 717  
    Other income                                                                    76 343         (28 159)              -           104 502  
    Changes in inventories of finished goods                                   (11 636 449)              -        (642 723)      (10 993 726) 
    Employee compensation and benefit expense                                     (301 043)              -               -          (301 043) 
    Depreciation, amortisation and impairment charges                             (128 441)              -               -          (128 441) 
    Other expenses                                                                (724 620)          7 662               -          (732 282) 
    Operating profit                                                               250 170         (20 497)         19 940           250 727  
    Finance costs                                                                 (119 520)              -            (701)         (118 819) 
    Finance income                                                                  80 349               -           1 858            78 491  
    Gain on associates and joint venture measured at fair value                     13 115               -               -            13 115  
    Share of losses from associates and joint ventures                            (201 277)         48 790        (112 029)         (138 038) 
    Net profit before taxation                                                      22 837          28 293         (90 932)           85 476  
    Taxation                                                                      (189 118)           (140)         (5 907)         (183 071) 
    Net profit for the period                                                     (166 281)         28 153         (96 839)          (97 595) 
    Other comprehensive income:                                                                                                               
    Items reclassified to profit or loss                                                                                                      
    Foreign currency translation reserve reclassified to profit or loss               (143)              -               -              (143) 
    Items that may be subsequently reclassified to profit or loss                                                                             
    Share of other comprehensive income/(loss) of associates and joint ventures     14 114               -               -            14 114  
    Foreign exchange loss on translation of foreign operations                       3 058               -               -             3 058  
    Other comprehensive income/(loss) for the period, net of tax                    17 029               -               -            17 029  
    Total comprehensive income for the period                                     (149 252)         28 153         (96 839)          (80 566) 
    Net profit for the period attributable to:                                    (166 281)         28 153         (96 839)          (97 595) 
    Equity holders of the parent                                                  (185 770)         27 601         (96 839)         (116 532) 
    Non-controlling interest                                                        19 489             552               -            18 937  
    Total comprehensive income for the period attributable to:                    (149 252)         28 153         (96 839)          (80 566) 
    Equity holders of the parent                                                  (168 446)         27 601         (96 839)          (99 208) 
    Non-controlling interest                                                        19 194             552               -            18 642  
    Earnings per share for profit attributable to:                                                                                            
    Equity holders (cents)                                                                                                                    
    - Basic                                                                         (20.07)           2.98          (10.46)           (12.59) 
    - Diluted                                                                       (18.19)           2.96          (10.39)           (10.76) 
    The change in accounting policies had no impact on the Group cash flow statement.

7. Significant related party transactions and balances                                                                  
                                                                        Six months       Six months             Year    
                                                                             ended            ended            ended    
                                                                       30 November      30 November           31 May    
                                                                         Unaudited        Unaudited          Audited    
                                                                              2018             2017             2018    
                                                                             R'000            R'000            R'000    
   Sales to related parties                                                                                             
   Cell C Proprietary Limited                                              937 558          146 789        1 100 788    
   Purchases from related parties                                                                                       
   Cell C Proprietary Limited                                            3 613 074        2 858 002        4 873 215    
   Interest received from related parties                                                                               
   2DFine Holdings Mauritius                                                12 853           11 092           21 736    
   Cell C Proprietary Limited                                              229 524           17 854           96 380    
   Loans to related parties                                                                                             
   2DFine Holdings Mauritius#                                              109 524          239 028          100 837    
   Brett Levy#                                                              33 179                -           27 503    
   Cell C Proprietary Limited                                                    -          749 279        1 029 626    
   Mark Levy#                                                               33 179                -           27 503    
   Oxigen Services India Private Limited                                    37 752           36 193           34 017    
   ZOK Cellular Proprietary Limited                                         16 716           20 950           19 768    
   Amounts due from related parties included in trade receivables                                                       
   3G Mobile (Botswana) Proprietary Limited                                 30 346           44 940           31 688    
   Cell C Proprietary Limited                                            2 895 691          135 148        2 623 194    
   Amounts due to related parties included in trade payables                                                            
   3G Mobile (Botswana) Proprietary Limited                                    744            9 285           30 799    
   Cell C Proprietary Limited                                            1 615 760        2 055 178        1 573 472    
   # Brett Levy and Mark Levy have signed personal sureties for the loan owed by 2DFine Holdings Mauritius to Gold Label Investments 
     Proprietary Limited. As at November 2018 a combined surety asset of R66 million has been raised (May 2018: R55 million).

8. Basis of preparation
   The condensed unaudited consolidated interim financial statements have been prepared in accordance with the requirements of section 8.57 
   of the JSE Limited Listings Requirements, the presentation and disclosure requirements of IAS 34 - Interim Financial Reporting and the 
   SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the 
   Financial Reporting Standards Council. The condensed unaudited consolidated interim financial statements have been prepared in accordance 
   with International Financial Reporting Standards (IFRS) and the requirements of the Companies Act, No 71 of 2008.
   
   These condensed unaudited consolidated interim financial statements have been prepared in accordance with the going concern principle, 
   under the historical cost convention, adjusted for financial instruments measured at fair value through profit or loss. The condensed 
   unaudited consolidated interim report does not include all the disclosures required for complete annual financial statements prepared 
   in accordance with IFRS as issued by the International Accounting Standards Board (IASB). The accounting policies used in preparing 
   the condensed unaudited consolidated interim report are consistent with those applied in the previous annual financial statements, except 
   for the adoption of IFRS 9 - Financial Instruments and IFRS 15 - Revenue from Contracts with Customers. See note 6 for more detail.   
   
   We aim to provide stakeholders with the same additional information that management uses to evaluate the performance of the Group's 
   operations. Accordingly, we make reference to operating profit before depreciation, amortisation and impairment charges (EBITDA). In 
   addition, the Group applies core net profit and core headline earnings as non-IFRS measures in evaluating the Group's performance. This 
   supplements the IFRS measures. Core net profit is calculated by adjusting net profit for the year with the amortisation of intangible 
   assets that arise as a consequence of the purchase price allocations completed in terms of IFRS 3(R) - Business Combinations. Core 
   headline earnings are calculated by adjusting core net profit with the headline earnings adjustments required by SAICA 
   Circular 2/2015.        
   
   The results for the period ended 30 November 2018 have not been reviewed or audited.

Directors: LM Nestadt (Chairman)#, BM Levy, MS Levy, K Ellerine##, GD Harlow#, JS Mthimunye#, DA Suntup, J Vilakazi#
#Independent Non-Executive ##Non-Executive

Company Secretary: J van Eden

Sponsor: Investec Bank Limited

Auditors: PricewaterhouseCoopers Inc.

www.bluelabeltelecoms.co.za

Date: 28/02/2019 08:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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