Blu Label Unlimited reports R4.9bn loss following Cell C write-down

Blu Label Unlimited reported a R4.9 billion loss for the fiscal year ending in May, primarily driven by a massive write-down of its stake in mobile operator Cell C. The loss stems from accounting changes following Cell C’s separate listing in November, which required Blu Label to account for the stake based on its listed value rather than its previous book value.

Despite the reported net loss, the company’s core business remains profitable. On a normalised basis, Blu Label generated net profit after tax of approximately R677 million to R680 million, with core headline earnings per share of roughly 75c. The company noted that its underlying business saw a 7% increase in normalised revenue from voucher distribution.

Co-CEOs Brett and Mark Levy described the period as a transformational year that simplified the company’s balance sheet. Blu Label has adopted a formal dividend policy, targeting an annual payout to shareholders of between 30% and 50% of its core headline earnings, excluding earnings from its remaining 49.53% stake in Cell C. The company declared a final dividend of 10c per share.