UNLIMITED
POTENTIAL
UNLIMITED
POTENTIAL
"FY26 was a year of continued financial progress for Blu Label. We restructured our balance sheet following the completion of the Cell C recapitalisation transaction, delivered resilient earnings and maintained a disciplined approach to capital allocation, positioning the Group to support growth across its core and developing platforms."
DA SUNTUP
Financial Director
The year ended 31 May 2026 was characterised by disciplined execution in a challenging consumer environment and continued progress in building a simpler, more focused Blu Label. The Group's core platforms remained cash-generative, supported by disciplined cost management, improved liquidity and a sharper focus on earnings quality and returns on invested capital.
The defining milestone of the period was the successful restructuring and subsequent listing of Cell C Holdings Limited ("Cell C"). The transaction de-risked the Group's exposure, reduced complexity and enhanced earnings visibility, while Blu Label's retained shareholding preserves strategic optionality. Cell C's listing introduces transparent market valuation, strengthened governance and independent access to capital, reinforcing Blu Label's role as a strategic shareholder focused on long-term value creation rather than operational support.
During the year under review, Blu Energy secured a multi-year energy trading licence from the National Energy Regulator of South Africa. The licence positions the Group to participate meaningfully in the reform of South Africa's electricity market and to supply renewable energy solutions to municipalities and independent power producers, thereby supporting the operational objectives and longer-term growth ambitions of the business.
Reported results for the year were materially affected by the impact of IFRS Accounting Standards arising from the restructuring transactions and the listing of Cell C. These effects are non-operational in nature and do not reflect the underlying trading performance of the Group.
The Board resumed dividend distributions during the year, declaring and paying an interim dividend of 43.56 cents per share. A final dividend of 10 cents per share has been declared, bringing the total dividend for the year to 53.56 cents per share. In addition, the Board will return capital to shareholders through a share repurchase programme, to be implemented under the general authority granted by shareholders and subject to market conditions.
Blu Label is increasingly positioned as an essential services platform, spanning distribution and payments, data intelligence, embedded financial services and infrastructure and energy. The Group's priority for FY27 is clear: to generate cash, preserve balance sheet flexibility, execute against its growth opportunities and allocate capital with discipline.
The Group's financial results for the year ended 31 May 2026 were materially impacted by a series of strategic transactions, most notably the acquisition of control of Cell C, the subsequent pre-listing restructuring (which included the disposal of Comm Equipment Company ("CEC")) and the partial disposal of Cell C which resulted in it transitioning from a subsidiary back to an associate.
These transactions, while strategically important, introduce a degree of accounting complexity that created volatility in the underlying performance of the Group. Although the related accounting treatments are required under IFRS Accounting Standards, they are not indicative of Blu Label's core operational trajectory or earnings capacity.
Accordingly, to provide a clearer view of the Group's core performance, normalised financial information has been presented excluding the financial results of Cell C and CEC, all extraneous items arising from the restructuring transactions and the listing of Cell C, and losses on disposal and impairments.
This approach provides an alternative basis from which to evaluate the Group's sustainable earnings profile and ongoing performance. The normalised financial information is not based on IFRS Accounting Standards and does not form part of the primary financial statements of the Group.
On a normalised basis for the year ended 31 May 2026, the financial highlights were as follows:
| NORMALISED FINANCIAL RESULTS | Group May 2026 R'000 |
| Revenue | 9 435 336 |
|---|---|
| Gross income | 2 555 281 |
| EBITDA | 922 523 |
| Net profit after tax attributable to equity holders of the parent | 676 894 |
| Headline earnings | 681 067 |
| Core headline earnings | 681 461 |
| SHARE PERFORMANCE: | |
| Earnings per share (cents) | 74.83 |
| Headline earnings per share (cents) | 75.29 |
| Core headline earnings per share (cents) | 75.33 |
Following the successful restructuring of Cell C and the relinquishment of control in November 2025, the Group equity accounted for its 49.53% shareholding in Cell C. This equity-accounted contribution included CEC's earnings, following the disposal of CEC to Cell C and its integration into the Cell C Group.
Accordingly, the Group's normalised earnings will incorporate its proportionate share of Cell C's annual profitability, which will be added to the core headline earnings base of R681 million. This is expected to provide a more comprehensive view of the Group's total earnings while enhancing earnings visibility.
Prior to the listing of Cell C, The Prepaid Company Proprietary Limited ("TPC") disposed of a 15.95% equity interest in Cell C to Sisonke Growth Partners, a broad-based black economic empowerment ("B-BBEE") special purpose vehicle, on vendor-funded terms. The transaction was undertaken to ensure that Cell C satisfied Independent Communications Authority of South Africa's ("ICASA") minimum historically disadvantaged individuals ownership requirement of 30% at the time of listing.
TPC continues to recognise the 15.95% interest as an asset, which has been classified as a non-current asset held for sale. This classification reflects the Group's commencement of a formal disposal or refinancing process that is expected to result in the accounting derecognition of the interest within the next six months.
Proceeds from this transaction are intended to support debt reduction and strengthen the Group's working capital position.
Group revenue, excluding Cell C's consolidated results for the three months ended 30 November 2025, and CEC's results for the full six-month period, amounted to R9.4 billion. As only the gross profit earned on "PINless top-ups", prepaid electricity, ticketing and universal vouchers are recognised as revenue, on imputing the gross revenue generated from these sources, the effective growth in revenue equated to R6.7 billion (7%), resulting in a total revenue of R99.9 billion compared to the prior year of R93.2 billion.
Gross revenue generated on "PINless top-ups" increased by R3.3 billion from R21.8 billion to R25.1 billion.
Electricity revenue generated on behalf of the utilities increased by R1.9 billion (4%) from R44.2 billion to R46.2 billion. Commission earnings, primarily calculated based on kilowatt-hour ("kWh") consumption, declined by R40 million (13%) from R319 million to R279 million. The decline in commissions was driven by margin compression, despite overall growth in gross electricity revenue, supported by NERSA-approved tariff adjustments and inflationary increases linked to kWh usage.
Gross ticketing revenue declined by R174 million (13%), resulting in a decline in commissions earned of R11 million. The decline was driven by a reduction in sales of music festivals and concerts, which have historically generated lower margins offset by a growth in commuter bus channel revenues.
Gross revenue from universal vouchers increased by R3.4 billion (22%) from R15.3 billion to R18.7 billion, underpinned by the continued expansion of BluVoucher sales through financial institution channels.
BLU's reported results include Cell C's equity-accounted contribution for the three months ended 31 August 2025, its consolidated results for the three months ended 30 November 2025, and CEC's results for the full six-month period, as the disposal became effective only at the end of November 2025.
For the period from 1 December 2025 to 31 May 2026, following the partial disposal of Cell C, which resulted in Cell C transitioning from a subsidiary to an associate, Blu Label accounts for its investment in Cell C using the equity method. Accordingly, BLU's reported results for the six months ended 31 May 2026 include its 49.53% share of the Cell C Group's profits, which incorporate CEC's results.
| REPORTED FINANCIAL RESULTS | Group May 2026 R'000 |
Group May 2025 R'000 |
Growth R'000 |
Growth % |
||
| Revenue | 13 052 808 | 14 050 177 | (997 369) | (7%) | ||
|---|---|---|---|---|---|---|
| EBITDA | (4 765 413) | 1 604 090 | (6 369 503) | (397%) | ||
| Net (loss)/profit after tax attributable to equity holders of the parent | (4 882 394) | 2 484 243 | (7 366 637) | (297%) | ||
| Headline earnings adjustments | 5 638 482 | 1 612 163 | 4 026 319 | 250% | ||
| Headline earnings | 756 088 | 4 096 406 | (3 340 318) | (82%) | ||
| Core headline earnings | 797 862 | 4 147 296 | (3 349 434) | (81%) | ||
| SHARE PERFORMANCE: | ||||||
| Earnings per share (cents) | (539.73) | 276.52 | (816.25) | (295%) | ||
| Headline earnings per share (cents) | 83.58 | 455.96 | (372.38) | (82%) | ||
| Core headline earnings per share (cents) | 88.20 | 461.63 | (373.43) | (81%) | ||
Included in headline earnings adjustments for the year ended 31 May 2026 is a net loss of R5.6 billion, which is added back in determining headline earnings. This comprises a net loss of R5.19 billion relating to the Group's investment in Cell C, impairments of goodwill of R201 million, impairments of intangible assets and fixed assets of R116 million, a loss on disposal of assets of R29 million, and a loss on disposal of a subsidiary of R105 million.
The net loss of R5.19 billion relating to Cell C comprises a loss of R6 billion recognised on the disposal of TPC's investment in Cell C and CEC following Cell C's listing at a market capitalisation of R9 billion, partially offset by a gain of R841 million on the remeasurement of the previously held interest on TPC's acquisition of control of Cell C in September 2025.
Included in headline earnings adjustments for the year ended 31 May 2025 is a net loss of R1.6 billion attributable to the Group's share of historical impairments recognised by Cell C of R3.144 billion, partially offset by the reversal of the impairment previously recognised on Blu Label's investment in Cell C of R1.559 billion.
The Statement of Financial Position remains materially simplified following the successful implementation of the Cell C pre-listing restructuring and subsequent listing, with much of the historic complexity associated with Cell C funding instruments and restructuringrelated transactions now unwound.
Key structural changes include:
Key balance sheet movements related to the above:
Financial assets at fair value through profit or loss of R372 million were reallocated to the investment in Cell C following the completion of TPC's acquisition of SPV1 and Gramercy's shareholdings in Cell C, subsequent to receiving Competition Commission approval.
Investment in associates and joint ventures increased from R1.8 billion to R5 billion, driven primarily by Blu Label's investment in Cell C. The opening investment in Cell C of R1.7 billion was deemed to be disposed of at fair value upon Blu Label obtaining control of Cell C. Following Cell C's listing on 27 November 2025, the Group disposed of a portion of its shareholding, resulting in the loss of control and deconsolidation of the Cell C Group (including CEC), while retaining a significant minority interest accounted for as an associate at an initial fair value of R5.9 billion.
The Group's share of Cell C's profits for the six months from December 2025 to May 2026 amounted to R379 million, resulting in the investment in Cell C accumulating to R6.3 billion.
Of this amount, R1.4 billion, representing a 15.95% interest in Cell C sold to Sisonke Growth Partners in November 2025, has been reclassified as a noncurrent asset held for sale within current assets, leaving a balance of R4.8 billion recognised within investments in associates and joint ventures.
The loss of control of the Cell C Group (including CEC) resulted in the full derecognition of CEC's assets and liabilities. This included a reduction in purchase price allocation intangible assets and goodwill of R444 million, together with a decrease in advances to customers of R1.6 billion. Interest-bearing borrowings declined by R1.7 billion following the derecognition of the CEC facility with African Bank.
Cash and cash equivalents increased by R143 million. This was primarily driven by proceeds of R2.7 billion received from the sell-down of a 30% shareholding in Cell C, based on an equity valuation of R9.0 billion. The proceeds have been applied towards the settlement of certain interest-bearing borrowings and other debt obligations and the payment of a dividend to Blu Label shareholders of R398 million.
Borrowings declined by R783 million, primarily due to the derecognition of the R1.7 billion African Bank facility, as detailed above, and the settlement of the current SPV 5, Gramercy and Pref A liabilities amounting to R668 million. These reductions were offset by the R1.5 billion bridging facility raised in September 2025.
As a result, the Group is positioned with a simpler and more transparent balance sheet and enhanced financial flexibility.
The statement of cash flows includes Cell C's consolidated results for the three months ended 30 November 2025.
Cash generated from trading operations, including three months of cash generated by Cell C, amounted to R424 million. Working capital movements comprised an increase in inventory of R698 million, an increase in advances to customers of R240 million and an increase in trade receivables of R216 million, partially offset by an increase in trade payables of R771 million. After net finance costs of R845 million and taxation payments of R141 million, net cash utilised in operating activities amounted to R561 million.
Net cash flows generated from investing activities amounted to R1.5 billion of which R2.8 billion related to the net proceeds raised on the acquisition and subsequent disposal of Cell C and CEC. This was offset by additional funds advanced to Cell C prior to listing amounting to R641 million, and the acquisition of additional Cell C shares amounting to R146 million. Net cash flows from investing activities were further offset by the purchase of intangible assets amounting to R474 million and the purchase of property, plant and equipment amounting to R141 million.
Cash flows utilised in financing activities amounted to R797 million. Lease repayments amounted to R765 million, including a R733 million lease settlement paid by Cell C to Dark Fibre Africa. Net inflows from borrowings amounted to R377 million. In addition, a dividend of R398 million was declared and paid to shareholders.
Cash and cash equivalents accumulated to R965 million at 31 May 2026.
The 2026 financial year has materially reshaped the Group. Cell C has been restructured and separately listed, and now stands on an independent footing, with its own capital structure and a transparent market valuation.
Blu Label commences the new financial year with materially reduced structural complexity and the Board's attention directed towards growing its operating businesses rather than towards resolving legacy exposures.
Core prepaid distribution and payments operations remain resilient, with management focused on protecting the Group's market-leading position, deepening client relationships and enhancing and executing on revenue assurance capabilities (including municipal payment enablement at scale).
Strategic investments are shifting from build-out to commercial execution, with Blu Energy progressing toward first contracted revenues on the back of an expanding municipal/commercial pipeline and project readiness. Blu Energy has secured a multi-year energy trading licence from NERSA, enabling participation in South Africa's power sector reform and the delivery of renewable energy solutions across municipalities and independent power producers.
An interim cash dividend of 43.56 cents per ordinary share (34.848 cents net of withholding tax) was declared in February 2026 and paid to shareholders during the year under review. Subsequent to the reporting date, on 25 August 2026, the Board declared a final cash dividend of 10.00 cents per ordinary share (8.00 cents net of withholding tax). Total dividends declared in respect of the 2026 financial year therefore amount to 53.56 cents per ordinary share, or 42.848 cents per ordinary share net of withholding tax. As the final dividend was declared after 31 May 2026, it has not been recognised as a liability in the financial statements for the year ended 31 May 2026.
Subsequent to year-end, the changes in the individual interest held directly and indirectly by the directors in the Company's share capital were as follows:
| Direct beneficial | Indirect beneficial | |||
| DIRECTOR | As at 31 May 2026 |
As at 30 September 2026 |
As at 31 May 2026 |
As at 30 September 2026 |
| BM Levy | 72 660 979 | 73 932 880 | 27 772 778 | 35 536 602 |
|---|---|---|---|---|
| MS Levy | 65 253 571 | 66 525 472 | 29 120 980 | 36 884 804 |
| DA Suntup | 6 731 700 | 7 405 346 | 177 778 | 177 778 |
The Blu Label Board would like to extend its gratitude to the staff, suppliers, customers and business partners for their ongoing support and dedication to the Group.
For and on behalf of the Board
DA SUNTUP CA(SA)
Financial Director
30 September 2026
BLU Label Unlimited Integrated Annual Report 2025