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BUSINESS MODEL
AND STRATEGIC
OBJECTIVES
LEADERSHIP
GOVERNANCE
SHAREHOLDERS’
INFORMATION AND
ADMINISTRATION
OPERATING
PERFORMANCE
FINANCIAL
PERFORMANCE
BLUE LABEL INTEGRATED ANNUAL REPORT 2014
35
CONVERSATION WITH JOINT
CHIEF EXECUTIVE OFFICERS
CONTINUED
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Retail Mobile Credit Specialists:
We announced
the acquisition in December 2013 and completed
the transaction in April 2014. The initial cash
consideration was R299 million, with an additional
amount of R15.4 million paid in June 2014. RMCS
affords us access to new distribution channels for
the sale of both the RMCS and Blue Label ranges
of products and services. Integration of the
business and its people have now been completed.
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Viamedia:
Post year-end we announced the
purchase of a 75% stake for an initial
consideration of R144.4 million. Additional
payments up to R103.1 million on a piecemeal
basis will be payable if warranted profits are
achieved over the next three years. A further
R112.5 million will be payable if stretch targets are
achieved over and above the warranted profits.
Through Viamedia’s unique technology platform it
sells mobile entertainment and information services
to consumers.
EXPANDING OUR PRODUCT RANGE
TO INCLUDE THREE MORE
CATEGORIES OF PRODUCTS AND
SERVICES
In addition to distributing prepaid airtime and
electricity, we have now introduced two more
categories of products and services, as our plan to
extend financial inclusion to more communities
continues to unfold:
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Ticketing:
Following the purchase of TicketPros,
an advanced ticketing engine, we entered the
event and transport ticketing during the financial
year. At launch, TicketPros became the exclusive
partners of Cricket South Africa, the Blue Bulls and
Western Province Rugby. Hence our reach
into selected sports sponsorships. This was
complimented by sponsorship of the South African
T20 Cricket team.
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Financial Services:
The main service is bill
payments, which offers additional pay points for
the top national Bill Issuers, as well as the major
Municipal and Local Councils through the universe
of the Group’s merchants. Other products include
EFTs, money transfers, mobile banking and white
label money wallets. Towards the end of 2013 we
announced a merchant acquiring agreement with
ABSA bank and MasterCard providing merchants
in the informal retail sector with card acceptance
terminals. MasterCard also supports the POS
acquiring terminal roll-out destined for areas
where banks cannot find value in deploying their
own terminals.
TURBULENCE IN THE SOUTH AFRICAN
MARKET
Ultimately, the economic health of consumers in
certain LSM groups, particularly those affected by
industrial action, gives us occasional cause for caution.
Our policy on margin compression remains consistent.
Any change in price is passed onto the distribution
channel, although we acknowledge it does place
pressure on our distribution planning, as merchants
then seek more value-added products and services
from us. Cognisant of change, our recent analysis of
the route to market is informing us as to where to
build on existing strengths, and is identifying new
opportunities to entrench our distribution footprint
in urban and rural areas – be it in independent and
wholesale channels or petroleum forecourts.