Blu Label earnings hit by Cell C restructuring

Blu Label Unlimited anticipates a significant drop in earnings per share (EPS), headline earnings per share (HEPS), and core HEPS by over 20% for the year ending 31 May due to accounting effects from restructuring Cell C and its listing. In a statement released before the company's full-year results, Blu predicts a drop in reported EPS of over 100%, from 276.52 cents in the previous financial year, to between 542.50 cents and 536.96 cents per share.

HEPS and core HEPS are expected to fall by between 81% and 83%, and between 80% and 82% respectively, from 455.96 cents and 461.63 cents to between 79.02 cents and 88.14 cents and 83.58 cents and 92.82 cents per share. The sharp decline in earnings is primarily due to non-operational accounting effects from Cell C restructuring and its listing.

Blu stresses that these factors materially impacted its reported results, but notes that excluding Cell C and Comm Equipment Company's financial results, along with restructuring transaction and listing-related costs, Blu would have reported R9.4 billion in revenue, R2.5 billion in gross income, EBITDA of R923 million, and net profit after tax of R677 million.

The company also points out that its reported revenue doesn't include the full value of certain products, such as PINless top-ups, prepaid electricity, ticketing, and universal vouchers, which amount to an imputed gross revenue of R99.9 billion. Blu will publish its full financial results for the year ending 31 May on August 26. Cell C's full-year results for the 12 months ending May are expected to be released on August 21.