The South African company that tripled investors’ money in a year set to boom

Blue Label Telecoms expects its earnings to increase significantly in the 2025 financial year, as the company’s recent corporate actions begin to bear fruit.

Blue Label, which owns mobile service provider Cell C, announced this to shareholders through a trading statement published on Thursday, 7 August.

In this statement, the company said its earnings, headline earnings, and core earnings for the year ended 31 May 2025 are expected to increase by more than 20% compared to the prior year.

“A further trading statement will be issued once there is reasonable certainty regarding the specific ranges by which earnings, headline, and core headline earnings per share have increased,” Blue Label said.

The company’s full financial results for its 2025 financial year are expected to be released on 27 August 2025.

This comes as Blue Label is in the process of restructuring its operations, which will see big changes take place in the company.

Notably, this restructuring will involve the separation of Blue Label’s telecoms and non-telecoms business units.

In May 2025, Blue Label said this restructuring could also include unbundling and separately listing Cell C.

“Overall, the restructure is intended to streamline operations, improve financial sustainability, and enhance Cell C’s strategic readiness for long-term growth and potential listing,” the company said.

More recently, Blue Label also announced plans to potentially change its name to Blu Label Unlimited Group.

While not yet finalised, the company believes this name change better reflects its new direction, identity and business focus.

Blue Label’s restructuring comes after years of financial and operational struggles at the company.

In 2016, Blue Label’s market cap peaked at R19 billion, but missteps and risky investments over the past few years have seen its valuation drop significantly.

The company’s decline can largely be attributed to its costly and turbulent investment in Cell C.

Arresting the decline

Blue Label’s interest in Cell C started in August 2017, when the company signed its biggest deal ever by acquiring 45% of Cell C for R5.5 billion.

This acquisition was done during a restructuring process that also created three special-purpose vehicles to store the distressed company’s debt.

At the time, Blue Label co-CEO Brett Levy said they were positive about a turnaround in Cell C’s financial and operational performance.

However, Cell C has remained a drag on the company’s results since, and in 2020, Blue Label had to write down its investment in Cell C to zero.

While there are some signs of recovery today, especially in light of the recent trading statement projecting higher earnings, Cell C continues to face an uphill battle in South Africa’s competitive telecoms landscape.

In Blue Label’s latest results for the six months through November 2024, the company reported a weak set of results.

The company’s total revenue decreased by 4% to R7.2 billion, while its earnings per share were down 4% to 43.98 cents per share.

In addition to its poor results, Blue Label’s reporting is renowned for being highly complex, and its accounting structure can be complicated to understand.

Yet, many remain bullish about the company’s prospects going forward, with Blue Label being one of the JSE’s best-performing stocks over the past year.

Blue Label’s share price is up over 185% in the year to date, up over 280% in the past year, and has grown by more than 500% over the past five years.

Notably, the current level remains below the peak seen in 2016, with the company trading at a market cap of R14.97 billion on 7 August.