Blue Label Telecom's stated 'back-to-basics' strategy has been implemented. This has yielded not only improved efficiencies, but has also allowed us a renewed focus on our core services which in turn deliver enhanced returns to shareholders. The Group is in a strong financial position and showing excellent growth.
With technology, digitalisation, innovation, automation, artificial intelligence and big data playing bigger roles in what we do, we will continue to expand our digital ecosystem which will enable us to improve our market share in fintech and solidify our role as a market leader therein.
Core headline earnings for the year ended 31 May 2022 amounted to R1.06 billion, equating to core headline earnings of 121.01 cents per share.
In the comparative year, core headline earnings amounted to R788 million, of which R763 million related to continuing operations and R25 million to discontinued operations. Core headline earnings amounted to 89.65 cents per share.
On exclusion of the non-recurring income of R214 million in the current year and R47 million in the prior year, core headline earnings from continuing operations increased by R131 million from R716 million to R847 million (18%) and core headline earnings from continuing operations increased by 18% from 81.50 cents per share in the prior year to 96.56 cents per share. This growth was indicative of a robust trading performance by the Group during the year.
The review that follows provides more detail on the operating performance of the core businesses in the Group.
TPC is the leading distributor of prepaid airtime and SIM cards and our long-standing relationships with the MNOs are one of our key pillars of strength, hence it is important for TPC to nurture these valuable relationships.
The wholesale of prepaid airtime and sim cards are the key core contributors towards TPC's revenue. From a recharge perspective, a decline in the traditional wholesale airtime has been recorded as consumers now have more choice as to where they can purchase their recharge vouchers from. PINless top-ups continuously drive the convenience factor as well as the availability of more touch points for consumers to purchase their products.
TPC continues to pursue a complete digital transformation of its wholesale model, with emphasis on a PINless offering, driven by significant growth in Ringas.
The prepaid sim market is a saturated landscape, but still presents multiple opportunities for growth from an acquisition and retention perspective.
BLD is a leading distributor of prepaid airtime, data, electricity, and virtual products in South Africa. We continue to grow our distribution network, which spans across leading banks and financial institutions, formal retailers, petroleum forecourts, independent retailers as well as informal traders and spaza shops. We pride ourselves on our customer service and have invested significantly in our technology platforms to ensure maximum uptime and the availability of the widest array of products and services.
While we continue to focus on solidifying our distribution network and product and service penetration across formal channels, driving additional growth in the informal channel remains an area of concentration.
We rolled out a new operating model in the informal channel during the financial year and this is yielding positive results so far. We are enabling informal traders and their customers to transact on an equal footing, providing virtual prepaid products and services within arm's reach of every South African. A key strategic focus is to drive financial inclusion across these traders, giving them access to credit and insurance offerings that they typically would not have access to. We are uniquely placed to do this by leveraging the distinct data assets we generate across these traders.
Over the past year, we have continued to drive significant growth across our gaming, money transfers and transportation product categories, as well as achieving good growth from products that we have developed and launched in-house as part of our diversification strategy, against the backdrop of the socio-economic challenges our merchants and their consumers face. We applaud the resilience shown by our merchants across all the distribution channels, as we see a strong recovery despite these challenges.
Looking forward to the fiscal ahead, the key strategic focus remains on further partnering with our merchant network, driving product and service penetration across the distribution network, continuing to diversify the portfolio of offerings through new products that will be launched, most notably in the financial services category and building on the strong growth achieved in FY22.
Post the implementation of Project Boston, CEC's operations have continued to evolve, with responsibilities that range across the Cell C post-paid offering.
CEC continues to perform several post-paid back-office functions with a combination of in-house and outsourced services, in return for a share of the post-paid revenue. The initial focus was on stabilising operational issues resulting from the Boston transition and maintaining results on key metrics. CEC has now entered the next phase where the focus is on growing and improving performance. To help achieve this, we have been driving various initiatives aimed at improving service delivery and customer satisfaction. We have leveraged our direct relationships with all major original equipment manufacturers as well as with warehousing and logistics partners to better manage our stock. We are now also assisting with the management of our outbound call-centre sales partners and continue to subcontract several services to a subsidiary of Vodacom, while working closely with BluNova credit specialists in managing our credit risk better.
To support our commitment to drive sales in the Cell C post-paid business, we have recently launched a campaign aimed at awareness and acquisitions - "Win Big With Cell C". This is a four-month campaign consisting of radio takeovers, outside broadcasts, promotions and deals, which has shown positive results to date. Monthly subscriber acquisitions have grown by an average of 23% since the launch of the campaign.
CEC continues to track our key drivers, acquisition, retention and churn, while closely monitoring bad debt. We are employing various mechanisms to achieve our targets in these areas, including a differentiated and data-led product strategy, distinct post-paid marketing initiatives, as well as direct sales channels for post-paid contracts. Customer experience will also be a focus area in the coming year.
In partnership with BluNova, CEC is the driver of credit products within the broader BLT Group. This will launch with the Nano Advances project in BluAdvance, whereby we will provide advances on electricity vouchers to consumers and recover the advance from the recipient's next purchase together with a small convenience fee. Electricity is the first product that will be made available through this platform, with an expansion to other Blue Label Group products as we exit Beta phase and open to the entire eligible population in the coming months.
Cell C's four-pillar turnaround strategy implemented in March 2019 continued to have a positive impact on stabilising the business. The management team's focus has remained on creating the foundation for a sustainable business and implementing a new capex-light operating model.
The network migration to partner infrastructure, which began at the end of 2020, in line with its network strategy, will enable Cell C to substitute capex for opex, and deliver quality network experience to its customers. Good progress has been made with 100% migration in six provinces (Limpopo, Mpumalanga, North West, Northern Cape, Eastern Cape and Free State) as at May 2022. Further progress is to be made with KwaZulu-Natal, Western Cape and Gauteng over the coming months to 2023. On completion of the network migration, Cell C will have closed the network deficit.
Cell C's spectrum is one of the key assets that underpins its business. During the reporting period the company participated in the last ICASA ITA auction in respect of the licensing process of high-demand spectrum, and was awarded 10MHz in the 3 500MHz band.
With restructuring the balance sheet and improving overall liquidity, significant progress was made during this period with the conclusion of the recapitalisation transaction.
Cigicell is a leading distributor of prepaid electricity and water tokens in South Africa, with its subsidiaries and joint ventures providing revenue assurance for municipalities, which is done through innovative revenue collection, assurance and protection solutions. This includes assistance to financially distressed municipalities across South Africa via a revenue assurance ecosystem, which encompasses a variety of solutions. In an attempt to make payment of municipal rates and taxes convenient, safe and reliable, Cigicell offers its own online payment platform, Unipay.
Unipay will soon become a driver towards meaningful growth in the digital bill payment environment.
Our customer base can confidently depend on the expert and professional advice that Cigicell provides, and trust bestowed on the company to collect, protect and enhance its revenue. We impact communities in various ways through the employment of local skilled and semi-skilled labour in the municipality areas in which we operate, which positively impacts local economies. Cigicell is gradually deploying workflow business processes, eliminating human intervention, all while advancing the focus on efficiency, sustainability, and scalability.
Visual Revenue Management (VRM) oversees the strategic planning, implementation and evaluation of municipal services, including data integrity, verifications, credit control, stock collections, indigent registrations and the monitoring of electricity infrastructures. This will assist them in improving their electricity network stability and revenue enhancement.
VRM also provides the service for TID rollovers that municipalities need to achieve, with the national completion date being end of 2024.
Our private metering business, Reware, is also growing. Private metering installations have more than doubled in the last year, and more and more Large Power users are beginning to have their meters read remotely, thereby ensuring that correct billing files are sent to customers and that they are billing their large power customers correctly.
Ticketpro offers unique and specialised services in the eventing, sport and transport sectors in South Africa. This enhances Blue Label's revenue through the ability to secure distribution contracts, by offering customers access to exclusive transport services, sporting events and entertainment, as a way of boosting foot traffic to Blu Approved merchants.
Despite the extreme negative effect on the events industry in South Africa due to the Covid-19 pandemic, Ticketpro launched several new products to enhance the customer experience on their platform, thereby delivering on its quest for creating an exciting world of experience and convenience. They also diversified their product range by launching several new prepaid products such as airtime and data, betting vouchers and an exciting new ticketing category, which offers flights, car rentals, accommodation and travel packages.
During the last two years, Ticketpro spent considerable time rebuilding and developing new and improved systems and infrastructure, including a state-of-the-art event ticketing platform. Ticketpro's NFC transport division, Smart Tap, has made successful inroads into the public transport sector and is well positioned for 2023.
GloCell Distribution is a non-exclusive sim card distribution business that predominately focuses its distribution on the informal market of South Africa. For FY22, distribution was focused on wholesalers and spaza shops, which resulted in a 40% increase in distribution.
BluNova has become a leading practitioner of data and decision science in South Africa. Its state-of-the-art data algorithms and decision engine enable intelligent outcomes and have assisted in securing additional business for the Group, utilising market and behavioural data generated internally by Blue Label.
BluNova is advancing the development of capabilities in credit scoring, customer value management campaigning, lead generation and digital marketing.
Transaction Junction (TJ) is a major supplier of payment services in sub-Saharan Africa and continues to grow its footprint, seeing targeted sales growth across all retail tiers. While the effects of the KwaZulu-Natal riots in July 2021 and the progressive uptick in targeted inflation had a noticeable impact on consumer volume, growth in e-commerce and new digital channels increased by 150% year-on-year. A pleasing aspect of this growth is the net acquisition of new customers and mechanisms to improve the meantime to onboard new customers, while continuing to drive down the time to recognise revenue for large-scale deployments.
Securing several new strategic contracts means that TJ is well positioned to recognise sustained long-term growth from new customer contracts in the next 12 to 36 months. The 2021/22 trading period also saw TJ establishing new deployments in Namibia and Zambia, being streamlined by their AWS deployments. The ability to harness technology via the cloud confirms Transaction Junction platform's ability to accept and deliver transactions from anywhere to any destination via any channel.
Blue Label Data Solutions (BLDS), iTalk Holdings, iTalk Financial Services, Blue Label Communications and Blue Train.
BLDS is a premier provider of data, lead generation supply and management services in South Africa. BLDS offers a range of innovative products and services designed to support marketing efforts and streamline business processes. It is accredited by the Direct Marketing Association of South Africa.
We currently supply 24 different call centres, with 150 000 qualified hot leads on average per month, across multiple products and clients.
iTalk Holdings operates a call centre operation. It has successfully integrated the learners under learnership programmes into call centre operations. This allowed the company to employ a number of previously unemployed individuals, who received training coupled with a monthly stipend and commissions based on performance.
Blue Label Communications is a telecommunication solution provider and offers three business verticals:
Blue Train manages BLT's learners on various learnership programmes and has trained and placed over 3 600 learners across BLT companies over the past year.
