JSE-listed telecommunications and transaction services company Blue Label Telecoms has increased its gross profit by 23% to R2.93-billion and its earnings a share by 20% to 117.13c for the financial year ended May 31.

Headline earnings a share increased by 19% to 117.34c and core earnings a share by 18% to 121.01c. The net profit from continuing operations increased by 20% to R1.02-billion.

This was significant, as this was the second consecutive year the company has achieved growth, and the future looked positive for the company, Blue Label joint-CEO Brett Levy said on August 25.

"We have come out of Covid-19 strong and learned a lot of good lessons as the world moves into the areas where we operate," he added.

Cash generated from trading operations was R935-million and, after net finance costs and taxes, net cash generated from operating activities was R649-million. Cash and cash equivalents rose to R2.7-billion at year-end.

Further, the company launched its new Ringas product about 18 months ago. This service allows cellphone users to buy a voucher that will provide them with service on any of the telecommunications networks in South Africa.

Ringas is achieving about R200-million in revenue a month and 32-million unique subscriber identity module (SIM) cards have used the product, Levy noted.

"Increasing our product range is important to us, as it provides more margin and gives us more stickiness with customers. We are also deriving a lot of data from Ringas, which helped us to launch a new voucher advance product BluAdvance," he said.

Of the 21-million users that opted-in to the BluAdvance process and underwent credit scoring, seven-million were approved as eligible for voucher advances of between R10 and R400. The products currently include advances only for cellular airtime and electricity, but the company will add other products such as ticketing and sports events.

"The risk taken on new voucher categories is identical to the risk for airtime and electricity and will broaden our offerings," he noted.

The group continues to increase market share and bolster its product and services mix to defend and grow its positions in the market, Brett Levy added.

"On the data and technology side, technology is the lifeblood of Blue Label. Our technology platforms are robust and scalable. We have seen an increasing demand for information technology (IT) and software-as-a-service solutions, and we have placed lots of emphasis on cybersecurity, governance and IT security," said Blue Label joint-CEO Mark Levy.

In terms of Blue Label's digital business advancement and the transformation of its core platforms, the company has concluded its application programming gateway, has embedded enterprise architecture discipline in its design process, and is progressing well in the robotic process automation in identified automation opportunities, he said.

Further, the company has also defined its master data strategy and approach, and its broader digital transformation planning and implementation is ongoing.

"The company is continuously analysing and reviewing opportunities to reduce fixed costs by transforming its legacy infrastructure," he added.

Additionally, the company has achieved a combined uptime of 99.6% across all its transactional platforms and aspires to achieve 99.99999% uptime.

"We maintain ongoing cybersecurity vigilance with zero tolerance according to a zero trust model. We have also formalised implementation of the IT governance, controls and risk management processes, and good progress has been made on the assessment of our internal controls, including fraud within business applications," Mark Levy noted.

LEARNERSHIPS
Blue Label is also embarking on a large learnership programme, using Income Tax Act Section 12H provisions that allow for additional deductions to employers for qualifying learnership agreements.

The company has already taken 3 500 people through the programme and will train a further 8 500 people over a period of two years. The company will employ all 12 000 people after they complete the training, Brett Levy highlighted.

"Once they have gone through the learnership, they are then deployed as salary earners into Blue Label. This is not only philanthropic, but is good for us to have people sell our products and solutions," he added.

"Last year was a hard and tough year, although the numbers say we had a good year. We have developed a resilient business model and our people are working hard to help us reach our goals," said Mark Levy.

"The focus this year is on execution. We are facing headwinds, including inflation, but our business model seems to be robust, as we help to reduce friction points for consumers to make it easy for them to buy and to stimulate spending," he said.