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BUSINESS MODEL
AND STRATEGIC
OBJECTIVES
LEADERSHIP
GOVERNANCE
OPERATING
PERFORMANCE
SHAREHOLDERS’
INFORMATION AND
ADMINISTRATION
FINANCIAL
PERFORMANCE
BLUE LABEL INTEGRATED ANNUAL REPORT 2014
107
DIRECTORS’ REPORT
The directors have pleasure in presenting the Group and Company annual financial statements of Blue Label
Telecoms Limited (Blue Label Telecoms or the Company) and its subsidiary, associate and joint venture companies
(the Group) for the year ended 31 May 2014.
PRINCIPAL ACTIVITIES AND STRATEGY
Blue Label Telecoms’ core business is the virtual distribution of secure electronic tokens of value and transactional services
across its global footprint of touch points. The Group’s stated strategy is to extend its global footprint of touch points, both
organically and acquisitively, to meet the significant demand for the delivery of multiple prepaid products and services
through a single distributor, across various delivery mechanisms and via numerous merchants or vendors.
FINANCIAL RESULTS
The Group recorded a net profit after tax attributable to equity holders for the year ended 31 May 2014 of
R450 million (2013: R425 million). Full details of the financial position and results of the Company, the Group
and its segments are set out in the annual financial statements and Group annual financial statements. The Group
and Company annual financial statements for the year ended 31 May 2014 were approved by the Board and signed
on its behalf on 19 August 2014.
GOING CONCERN
The financial statements have been prepared on the going concern basis, since the directors have every reason to
believe that the Blue Label Telecoms Group and the Company have adequate resources in place to continue in
operation for the foreseeable future.
ACQUISITIONS
On 7 April 2014 The Prepaid Company Proprietary Limited, a wholly owned subsidiary of Blue Label Telecoms Limited,
purchased the entire share capital of Retail Mobile Credit Specialists Proprietary Limited for R299 million plus an additional
amount of R31.4 million if certain profit warranties are achieved. Of this additional amount R15.4 million has been paid on
2 June 2014. Refer to note 26.1 of the Group annual financial statements for further information.
On 31 January 2014 Blue Label Telecoms Limited acquired a further 18% of Africa Prepaid Services Proprietary Limited,
increasing its holding to 90%. Refer to note 26.2 of the Group annual financial statements for further details.
SHARE CAPITAL
Full details of the authorised, issued and unissued capital of the Company at 31 May 2014 are contained in note 13
of the Group annual financial statements. There were no shares issued during the financial year ended 31 May
2014 (2013: nil).
SUBSEQUENT EVENTS
Subsequent to year-end, dividend number 5 was declared and approved by the Board.
In August 2014 Blue Label Telecoms completed a transaction in which it acquired 75% of Viamedia Proprietary Limited
(‘Viamedia’). The purchase consideration is for an initial sum of R144.4 million plus additional amounts totalling up to
R103.1 million if warranted profits are achieved by Viamedia during the forthcoming 36 months. If the warranted profits
are not achieved, the above additional payments will be abated on a pro-rata basis. A further R112.5 million or part
thereof will be payable if stretched targets over and above the warranted accumulated profits over the next three years
are achieved.