South African tech company stuck in a rut

After spinning off Cell C, changing its name and unveiling big turnaround plans, the first half of Blu Label Unlimited’s (BLU) 2026 financial year saw the company swing into a loss.

BLU is a South African tech company that owns part of Cell C and wholly owns The Prepaid Company (TPC).

In 2025, the company announced plans to restructure its operations, including major changes such as unbundling and separately listing Cell C, as well as changing its name from Blue Label to Blu Label Unlimited.

On Thursday, 19 February, BLU released a trading statement for the six months ended 30 November 2025.

This update showed that BLU expects its earnings per share to plummet by over 100%, swinging into a loss per share of between 556.44 and 554.68 cents.

The company’s headline earnings per share are expected to decline by a more modest 14% to 18% to between 37.68 and 39.52 cents.

BLU explained that, excluding Cell C and Comm Equipment Company’s (CEC) financial results for the six-month period, all extraneous items relating to the pre-listing restructuring of Cell C and a goodwill impairment, the company would have reported revenue of R5 billion, gross income of R1.35 billion, EBITDA of R535 million and net profit after tax of R389 million.

Core headline earnings would have totalled R398 million, equating to core headline earnings per share of 44.19 cents. 

It explained that, as only the gross profit earned on PINless top-ups, prepaid electricity, ticketing and universal vouchers are recognised as revenue, the imputed gross revenue generated from these sources amounted to R50.9 billion. 

“These metrics provide a more meaningful indication of BLU’s underlying operational performance and earnings base going forward,” it said.

However, the company explained that since certain transactions related to Cell C and CEC were only completed later in the year, their results were included.

Also included in the company’s earnings for the six months ended 30 November 2025 is a net loss of R5.2 billion relating to BLU’s investment in Cell C. 

The loss comprises R6 billion recognised on the disposal of TPC’s investment in Cell C and CEC following Cell C’s listing at a market value of R9 billion.

This was partially offset by a gain of R841 million on the remeasurement of the previously held interest upon TPC’s acquisition of control of Cell C in September 2025.

BLU’s full results for the first half of its 2026 financial year will be released on 25 February 2026.