|
26 August 2009
Blue Label Telecom’s results for the period ended 31 May 2009 demonstrate that the group has successfully struck a balance between improving earnings year on year, whilst investing to achieve sustainable growth.
The company earned R427.2 million core net profit after tax for the year – an increase of 16% from the prior year – translating into core earnings per share of 55.93 cents compared to 48.40 cents for the May 2008 yearend. Headline earnings per share increased by 19%. The growth in profit and earnings per share was achieved off an increase in revenue of 18% and a growth in both EBITDA and operating profit of 31%. Cash generated from operating activities amounted to R667 million.
Joint CEOs Mark and Brett Levy attribute the company’s success to a number of fundamental factors, “our business model has proved to be robust and recession resistant. This is a function of the nature of our business and services, namely the delivery of pre-paid secure electronic tokens of value, ranging from pre-paid airtime, pre-paid electricity, pre-paid ticketing, money transfers and other essential consumables. Our aim is to deliver first world products to third world markets in a cost efficient, convenient and effective manner.”
In addition, say the CEOs, “notwithstanding the global recession which has devastated developed economies, emerging markets have continued to grow. For example, by the end of March 2009 India’s GDP rose 6%. The robustness of the prepaid market is well demonstrated in South Africa. Despite the recession, the average revenue per user (ARPU) has shown an increase, albeit marginal, from last year.
The Levy brothers point out that “pre-paid products and services have proved to be increasingly popular with hard-pressed consumers because the model allows for a predetermined, and therefore budgeted, spend.”
This was a busy year for Blue Label Telecoms. To meet the unique needs of the markets in which it operates, the company invested significantly in growing its footprint nationally and internationally, diversifying and expanding its core offering, and developing its technology platforms. Other initiatives were operationally focused and driven, including business alignment and integration for improved cost management and better leverage of income streams.
“Green shoots have surfaced in our operation in India” say the brothers. Together with its growing presence and value-added product range, which includes Direct Top-Up™ (70% of all airtime recharges are done this way), rail ticketing and a mobile wallet. In addition, the cell phone user base is growing at a rate of 27.5% per year in the territory. Considering that there are in excess of 430 million cell phone subscribers currently, representing over 30% of the total market, it is clear that the opportunity is vast. The company has service agreements with the State Bank of India and Nokia, and more are in the pipeline.
Important hubs such as Mexico, UK/Europe and Africa are progressing well. The group remains fully committed to growing its footprint, pioneering the development of new products and services, and managing costs. Mark and Brett say that “The group’s strategy is to diversify our revenue streams both in terms of product offerings and geographic locality through the controlled expansion of our transactional footprint and the technological improvement of our delivery platform.”
The Levy’s are optimistic about the prospects relating to the imminent launch of mibli ™powered by Microsoft OneApp™ during the course of the week. Over the past 18 months Blue Label has been working with Microsoft to bring the next generation of mobile services to the mass markets of the developing world. “We are extremely proud that Microsoft has chosen to partner with Blue Label to both develop and bring products to market” said the Joint CEOs. The CEOs referred to a Microsoft press release of the 24th August 2009, which described the application as follows:
“Microsoft Corp. today announced Microsoft OneApp, a new software application that enables standard phones — commonly found in emerging markets — to run mobile apps such as Facebook, Twitter, Windows Live Messenger, and other popular apps and games. The result is a better mobile experience for the many people around the world who want to do more with the phones they already own.
Launching first with Blue Label Telecoms in South Africa, OneApp will be used as the part of the new release of its mibli consumer mobile service. As a result of a strategic relationship with Blue Label Telecoms to provide mobile products and services to emerging market, mibli, powered by Microsoft OneApp, will ship with more than a dozen new mobile apps. Additional apps will be developed and available in the medium term, focusing on areas such as healthcare. Globally, customers will be able to download and install mibli for free.
“We believe mobile technology plays a pivotal role in addressing people’s everyday needs and creating new opportunities for local industry to grow. We are excited to announce our first release of Microsoft OneApp with Blue Label Telecoms,” said Amit Mital, Corporate vice president of the Unlimited Potential Group and Startup Business Accelerator at Microsoft. “Microsoft OneApp will be able to help people do things they couldn’t do before with their feature mobile phone — anything from paying their bills to helping diagnose their health issues or just staying connected with friends and family.”
Through the relationship with Blue Label Telecoms, OneApp complements Microsoft’s existing mobile strategy by bringing mobile apps and services to market.”
Following the launch in South Africa, Blue Label will partner with Microsoft to bundle OneApp™ with mibli™ and Blue Label’s transactional services in all markets where Blue Label has a presence.
Blue Label also has a number of other groundbreaking initiatives such as enabling Lotto purchases from mobile phones and till points, cashless ticketing systems for transport networks, multigrid prepaid electricity and location based services. “Our aim is to keep a balance between the operational implementation of our existing products and services whilst also keeping an important focus on the innovative proprietary development of new products and services. “
“We look forward to an exciting and positive year ahead” concluded Mark and Brett.
|
