| 17. | SUBSEQUENT EVENTS | ||||||||||
DIVIDEND DECLARATIONSubsequent to 31 May 2026, the Board declared and approved dividend number 10. On 25 August 2026, the Board approved a gross dividend of 10.00 cents per ordinary share, payable from income reserves. Together with the interim dividend of 43.56 cents per ordinary share declared in February 2026, this brings the total dividends declared in respect of the year ended 31 May 2026 to 53.56 cents per ordinary share. As the final dividend was declared after the reporting date, it has not been recognised in the financial statements for the year ended 31 May 2026. The salient dates are as follows:
Share certificates may not be dematerialised or rematerialised between Wednesday, 16 September 2026 and Friday, 18 September 2026, both days inclusive. Prior to declaring the dividend, the Board applied the solvency and liquidity test to the Company and reasonably concluded that the Company will satisfy that test immediately after payment of the dividend. The number of ordinary shares in issue at the date of this declaration is 913 655 873. The dividend is subject to local dividend withholding tax at a rate of 20%. Accordingly, shareholders who are not exempt from dividend withholding tax will receive a net dividend of 8.00 cents per ordinary share. Blu Label Unlimited Group Limited’s tax reference number is 9062246179. DIVIDEND POLICYOn 25 August 2026, the Board adopted a formal dividend policy. Blu Label is committed to returning capital to shareholders and, under the policy, targets an aggregate annual distribution to shareholders of between 30% and 50% of Blu Label’s core headline earnings (the “target range”). For this purpose, core headline earnings is measured after excluding Blu Label’s share of the earnings of Cell C Holdings Limited (“Cell C”). Distributions under the policy may take the form of interim dividends, final dividends, dividends in specie or share repurchases, or any combination of these. Distributions in specie are measured at the fair value of the assets distributed on the date of declaration. The Board will determine the appropriate mix at the time of each distribution, having regard to the prevailing share price and to the form of distribution that it considers will deliver the greatest value to shareholders at the time. In addition to the target range, between 50% and 70% of the cash dividends received by the Group from Cell C will be returned to shareholders, either by way of a cash dividend or by the distribution of Cell C shares of equivalent value. The balance will be retained and applied to the general funding requirements of the Group, including its working capital requirements and, in particular, the reduction of the Group’s debt. Retaining a portion of the Cell C dividend stream supports the liquidity of the underlying operations and, through the reduction of debt, lowers finance costs and strengthens headroom against the financial covenants under the Group’s facility arrangements. As gearing reduces, a progressively greater proportion of Group cash flow becomes available for distribution. The Board accordingly considers this application of the retained portion to be in the long-term interests of shareholders and will keep the proportion distributed under review as the Group’s financial position develops. The declaration of any dividend, whether in cash or in specie, and the implementation of any repurchase, remains within the Board’s discretion and will in each case be determined having regard to:
The Board will review the policy annually. The policy does not constitute a commitment or an obligation to declare a dividend, whether in cash or in specie, or to effect a repurchase in any period. Core headline earnings is a non-IFRS measure, which is defined and reconciled to headline earnings in note 1.5 of the BLU Group AFS. The adoption of the policy has no effect on the financial statements for the year ended 31 May 2026. SHARE REPURCHASE PROGRAMMEOn 25 August 2026, the Board further approved a share repurchase programme, in terms of which Blu Label will repurchase its shares pursuant to its existing general authority granted by shareholders at the Company’s Annual General Meeting held on 21 November 2025. The repurchase will be effected in accordance with section 48 of the Companies Act, read together with section 46 and the solvency and liquidity test prescribed in section 4, and pursuant to the general authority granted by shareholders by way of special resolution. Repurchases under the programme will be undertaken, subject to market conditions, for as long as the Board considers them to remain value accretive to shareholders. The Board is of the view that the repurchase programme will deliver incremental value to Blu Label shareholders over the longer term. No shares had been repurchased at the reporting date, and the programme accordingly has no effect on the financial statements for the year ended 31 May 2026. As and when shares are repurchased, the consideration paid, together with any directly attributable costs, will be recognised as a reduction in equity over the term of the programme. CHANGES TO THE BOARD AND ITS COMMITTEESShareholders are referred to the SENS announcement released on 24 February 2026 regarding the appointment of Mr Lindsay Peter Ralphs as an Independent Non-Executive Director and Chairman designate with effect from such date. Shareholders are advised that, as announced, Mr LM Nestadt will step down as Chairman of the Blu Label Board and the Nominations Committee effective 26 August 2026 and Mr LP Ralphs will be appointed as Chairman of the Blu Label Board and the Nominations Committee. DEBT FOR EQUITY CONVERSIONOn 18 June 2026, BLU concluded a debt for equity conversion with Transaction Junction Proprietary Limited (“TJ”). BLU acquired The Prepaid Company Proprietary Limited (“TPC”)’s loan receivable owing by TJ to TPC at the carrying amount of R79.974 million. The loan acquired was then converted into equity through TJ issuing additional 8 747 shares, moving the shareholding of BLU from 60% to 76.86%. |