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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
95
FINANCIAL DIRECTOR’S
REPORT
CONTINUED
FINANCIAL REVIEW
EBITDA increased by 10% to R788 million, emanating
from revenue growth of 2% to R19.4 billion, an
increase in gross profit margins of 0.26% and limiting
additional overheads to 3%. Headline earnings per
share increased to 67.98 cents.
The gross profit margin increase was mainly
attributable to the application of cash resources to
bulk inventory purchases at favourable rebates and
early settlement discounts. Further growth was
attributable to increases in commissions earned on
the distribution of prepaid electricity, with turnover
generated on behalf of the utilities, escalating to
R8.8 billion.
Share of net losses of R57 million from associates
and joint ventures, mainly attributable to BLM,
negatively impacted headline earnings by 9 cents per
share. Expenditure incurred by BLM on the roll-out of
point-of-sale devices on a national scale is in line with
its strategy to enhance its product and service
offerings, the benefits of which are expected to
materialise in the future.
In April 2014, the Group acquired RMCS, an
enhanced service provider of telecommunication
products and services, content, data and allied
activities, via physical and virtual mediums. This
acquisition will afford the Group access to new
channels for the distribution of both RMCS and its
products and services.
Cash resources accumulated to R1.2 billion of which
R907 million was generated from operating activities.