Media release article

Blue Label Telecoms final results surpass its pre listing statement forecast

Blue Label Telecoms Limited (BLT) today announced its maiden Final Results for the financial year ended 31 May 2008. BLT and its subsidiary and associate companies (the group) produce and distribute a wide variety of prepaid secure electronic tokens of value and transactional services.

The group's prepaid products and service offerings include prepaid airtime, prepaid electricity, bill payments, electronic funds transfers, loyalty programs, stored value cards, location based services and other physical and virtual prepaid electronic tokens of value. The group processes in excess of 500 million monthly transactions through several hundred thousand mobile and fixed points of presence.

Highlights for the period

• Successful listing, capital raising of R1.3 billion
• Microsoft Corporation's acquisition of a 12% equity stake in the group and the conclusion of a strategic collaboration agreement
• Microsoft Corporation's acquisition of a 38.85% equity stake in Oxigen Services India
• Pro forma revenue increased from 16.4% to R12.93 billion (R11.1 billion in PLS)
• Actual revenue increased from 15.1% to R12.55 billion (R10.9 billion in PLS)
• Pro forma core net profit increased from 9.1% to R371 million (R340 million in PLS)
• Actual net profit increased from 25.5% to R181 million (R144 million in PLS)
• Pro forma core basic earnings per share increased from 5.7% to 48.40 cents (45.81 cents in PLS)
• Actual basic earnings per share increased from 16.5% to 30.65 cents (26.30 cents in PLS)

BLT is pleased to present the pro forma results and audited results for the financial year ended 31 May 2008. The results surpass the unaudited pro forma and forecast financial information contained in the group's pre listing statement (PLS). The PLS included the group's unaudited forecasts of basic and headline earnings of R144 million, core earnings of R234 million, pro forma earnings of R250 million and core pro forma earnings of R340 million. These forecasts equated to basic and headline earnings per share of 26.30 cents, core earnings per share of 42.68 cents, pro forma earnings per share of 33.61 cents and core pro forma earnings per share of 45.81 cents.

The final audited results equated to an increase of 25.5% in earnings and an increase of 7.9% in pro forma earnings. The actual core earnings of R270 million and the pro forma core earnings of R371 million equate to increases over forecast of 15.5% and 9.0% respectively.

Brett Levy, joint CEO of Blue Label Telecoms commented: "The group's good full year performance is attributable to good trading results and stringent asset and treasury management. The group is highly liquid and well positioned to support the funding of potential acquisitions without impairing its working capital requirements."

Mark Levy, joint CEO of Blue Label Telecoms commented: "In November 2007 the group signed a collaboration agreement with Microsoft Corporation to provide mutual assistance in exploring new business opportunities and preferred partnership initiatives across the world's emerging and developing economies. This agreement provides for an advertising revenue share model which is anticipated to begin generating revenue in the next eighteen months. The group has established a business presence in Mexico, an important step in the group's goal of creating a transaction based distribution network in the emerging markets of Latin America. Oxigen, the group's Indian associate has also recently launched OxiCash, a stored value "virtual wallet" which is an important step in the evolution of a full scale "virtual wallet" and money transfer offering that will be distributed via the mobile phone and accessed across any of group's global footprint of touch points."

Brett Levy concluded: "Growing the group's global transactional footprint and rolling out its proven business model in emerging markets through both organic growth and strategic acquisitions remains a key strategic priority. The group intends to diversify its product offerings and income streams, through, for example, the inclusion of revenues from advertising and money transfers."