Get started
BLUE LABEL TELECOMS LTDBLUE LABEL TELECOMS LTDBLUE LABEL TELECOMS LTD

BLUE LABEL TELECOMS LTD

No trades
See on Supercharts
Overview Financials News
Ideas
Discussions Technicals Seasonals

BLU trade ideas

Our opinion on the current state of BLUETEL(BLU)Blue Label Telecoms (BLT) is a company with a primary focus on selling secure tokens of value, such as airtime, starter packs, and electricity. A significant aspect of its business strategy has been its involvement with Cell-C, in which it acquired a 45% stake in September 2016. The performance of Blue Label's results has been heavily influenced by the financial health of Cell-C. In April 2019, S&P Global Ratings downgraded Cell-C's debt to CCC- from CCC+, citing an "unsustainable" capital structure. The acquisition of Cell-C has been a substantial investment for Blue Label, costing R7.55 billion, of which R3.9 billion was financed through the issuance of 272 million shares. The high level of debt at Cell-C, which stands at R8.9 billion, presents a significant challenge, especially considering that this debt is almost three times Blue Label's market capitalization, which is under R3 billion. On 25th August 2021, Blue Label announced that it had secured new financing for Cell-C, providing some relief to the company. On 22nd September 2022, the company further announced that Cell-C would undergo a recapitalization with a R1.03 billion injection from Blue Label, raising its stake in Cell-C to 49.5%. This announcement had a positive impact on Blue Label's shares, reflecting investor optimism. Despite the challenges, Blue Label has managed to achieve positive cash flows and benefited from the sale of its 3G handset division, which contributed to a reduction in debt levels. In its results for the year ended 31st May 2024, Blue Label reported a 23% decline in revenue, but headline earnings per share (HEPS) increased to 76.08c from 45.55c in the previous year. The company attributed the decline in core headline earnings at Cell-C to factors such as the expiration of certain elements of the revenue-sharing agreement in November 2022, increased expenditure related to the distribution agreement, and higher amortization of handset subsidies. We had recommended waiting for a break through the downward trendline before considering an investment. That breakthrough occurred on 29th February 2024 at a price of 360c. Since then, the share price has risen to 525c, representing a gain of 45.8% over six months. This upward movement indicates positive momentum, but the share remains influenced by the ongoing developments at Cell-C and the broader financial health of the company.
JSE:BLU
by PDSnetSA
Our opinion on the current state of BLUETEL(BLU)Blue Label Telecoms (BLT) is a company that specializes in selling secure tokens of value, such as airtime, starter packs, and electricity. A significant part of its operations has been influenced by its 45% stake in Cell-C, acquired in September 2016. The acquisition, which cost R7.55 billion, including R3.9 billion paid through the issuance of 272 million shares, has had a substantial impact on Blue Label's financial performance due to the challenges faced by Cell-C. Cell-C's financial troubles became evident when S&P Global Ratings downgraded its debt to CCC- from CCC+ in April 2019, citing an "unsustainable" capital structure. With Cell-C's debt levels reaching R8.9 billion, nearly three times Blue Label's market capitalization (less than R3 billion), the situation became a significant concern. However, on 25th August 2021, Blue Label announced that it had secured new financing for Cell-C. Further, on 22nd September 2022, the company disclosed a R1.03 billion recapitalization of Cell-C, increasing its stake in the telecom to 49.5%, which positively impacted Blue Label's share price. Despite these challenges, Blue Label has managed to achieve positive cash flows and benefited from the sale of its 3G handset division, which helped reduce its debt levels. In its results for the six months ending 30th November 2023, the company reported a 23% decline in revenue and a 22% drop in headline earnings per share (HEPS). The company attributed this decline mainly to a R119 million decrease in contributions from the Comm Equipment Company (CEC), though other group entities saw a R19 million increase compared to the prior period. In a trading statement for the year ending 31st May 2024, Blue Label estimated a HEPS increase of between 73% and 77%. The company explained that, excluding the positive contributions of R66 million in the current year and the negative contributions of R523 million in the comparative year (primarily due to the Cell-C recapitalization transaction), core headline earnings declined by R312 million (34%) from R925 million to R613 million. Technically, Blue Label's share price had been in a downward trend until it broke through the trendline on 29th February 2024 at 360c. Since then, the share price has risen to 505c, marking a gain of 40% in under six months.
JSE:BLU
by PDSnetSA
Our opinion on the current state of BLUBlue Label Telecoms (BLT) is a company with a significant stake in Cell-C, a telecommunications provider in South Africa. The performance of Cell-C has a substantial impact on Blue Label's overall results. Since acquiring a 45% stake in Cell-C in September 2016, Blue Label's financial performance has been closely tied to the performance of Cell-C. However, Cell-C has faced challenges, including high levels of debt and a downgrade of its credit rating by S&P Global Ratings in April 2019 due to an unsustainable capital structure. To address these challenges, Blue Label Telecoms has been actively involved in recapitalizing Cell-C. For instance, in September 2022, Blue Label announced a recapitalization plan involving a R1.03 billion injection from Bluetel, increasing its stake in Cell-C to 49.5%. This move was received positively by the market, leading to an increase in Blue Label's share price. Blue Label Telecoms has also taken steps to improve its own financial position, including achieving positive cash flows and divesting its 3G handset division to reduce debt levels. In its financial results for the six months ending November 30, 2023, Blue Label reported a decline in revenue and headline earnings per share (HEPS). The decrease in core headline earnings was primarily attributed to a decrease in the performance of Comm Equipment Company (CEC), partially offset by improvements in other entities within the group. Technical analysis indicated a break through the downward trendline for Blue Label Telecoms' share price on February 29, 2024, signaling a potential turnaround. Since then, the share price has experienced a notable increase. Additionally, the resignation of Douglas Stevenson as CEO of Cell-C in March 2023 could signal changes within the company's leadership and strategy, which might impact Blue Label Telecoms' future performance. Overall, Blue Label Telecoms' fortunes are closely tied to the performance of Cell-C, and the company's ability to navigate challenges in the telecommunications industry will be critical for its future success. Investors should monitor developments in both companies closely.
JSE:BLU
by PDSnetSA
Our opinion on the current state of BLUBlue Label Telecoms, a company known for selling secure tokens of value such as airtime, starter packs, and electricity, has faced significant challenges, particularly due to its investment in Cell-C. Acquiring a 45% stake in Cell-C in September 2016 for R7,55 billion, Blue Label's financial performance has been closely tied to the fortunes of the mobile operator. Cell-C's financial struggles, highlighted by S&P Global Ratings' downgrade of its debt to CCC- in April 2019, have placed considerable pressure on Blue Label. With Cell-C's debt reaching R8,9 billion, nearly three times Blue Label's market capitalization, the sustainability of Cell-C's capital structure has been in question. Efforts to stabilize Cell-C have included obtaining new financing and a significant recapitalization in September 2022, with Blue Label injecting an additional R1,03 billion to increase its stake to 49.5%. These moves, along with the sale of Blue Label's 3G handset division, have aimed to improve cash flow and reduce debt levels. Despite these efforts, for the six months ending on 30th November 2023, Blue Label reported a 23% decline in revenue and a 22% drop in HEPS, attributing the core headline earnings decline primarily to a decrease in Comm Equipment Company (CEC). The challenges facing Blue Label and Cell-C underscore the complexities of the telecommunications industry, especially for companies dealing with high levels of debt and competitive markets. As Blue Label continues to navigate these challenges, investors and stakeholders will be closely watching for signs of recovery and stability. The resignation of Douglas Stevenson as CEO of Cell C in March 2023 adds another layer of uncertainty to the company's future direction. For those considering investing in Blue Label Telecoms, it may be prudent to wait for a clear sign of improvement in the company's financial health and strategic direction.
JSE:BLU
by PDSnetSA
Our opinion on the current state of BLUBlue Label Telecoms (BLT) operates in the telecommunications sector, focusing on the distribution of secure tokens of value, including airtime, starter packs, and electricity. A significant development in its corporate journey was the acquisition of a 45% stake in Cell-C in September 2016, making Cell-C's performance a pivotal factor in Blue Label's financial results. In April 2019, S&P Global Ratings downgraded Cell-C's debt rating due to concerns about its unsustainable capital structure, highlighting the challenges faced by Blue Label in improving Cell-C's profitability. The acquisition cost of Cell-C's stake amounted to R7.55 billion, partially financed by issuing 272 million shares worth R3.9 billion. Cell-C's debt escalated to R8.9 billion, nearly tripling Blue Label's market capitalization, which stands at less than R3 billion. Despite these challenges, Blue Label announced new financing arrangements for Cell-C on 25th August 2021, followed by a significant recapitalization on 22nd September 2022, where Blue Label injected R1.03 billion into Cell-C, increasing its stake to 49.5%. This move positively impacted Blue Label's shares, reflecting investors' optimism about Cell-C's future. Blue Label has managed to maintain positive cash flows, aided by the sale of its 3G handset division, which contributed to reducing debt levels. For the fiscal year ending on 31st May 2023, the company reported a revenue of R18.6 billion and a profit of R288.1 million, a decrease from R1091.1 million in the previous year. This decline was attributed to the recognition of accumulated losses from Cell-C, capped at R1.329 billion, which includes a partial reversal of the initial impairment of Blue Label's investment in Cell-C and additional investments amounting to R366 million. For the six months ending on 30th November 2023, Blue Label estimated HEPS to be between 45.87c and 45.95c, a significant improvement from 2.09c in the previous period, largely due to the recapitalization of Cell-C. However, Blue Label's share price has experienced a downward trend since August 2022. A notable turnaround occurred on 23rd November 2023 when the share price broke through the downward trendline at 343c, subsequently rising to 355c. On 23rd March 2023, the company announced the resignation of Douglas Stevenson as CEO of Cell C effective 31st March 2023, marking another significant change in the company's leadership. Given the recent improvements and strategic initiatives, Blue Label Telecoms appears to be navigating its challenges with Cell-C, offering potential value to investors willing to monitor its progress closely.
JSE:BLU
by PDSnetSA
Our opinion on the current state of BLU.Blue Label Telecoms (BLT) is a company which has interests in selling secure tokens of value - such as airtime, starter packs and electricity. It bought 45% of Cell-C in September 2016 thus its results have been substantially determined by that company's results. In April 2019, S&P Global Ratings downgraded Cell-C's debt to CCC- from CCC+ because its capital structure was "unsustainable". The total cost of acquiring its stake in Cell-C was R7,55bn, R3,9bn of which was paid for by the issue of the 272m shares. Obviously, much depends on its ability to improve the profitability of Cell-C. Debt levels at Cell-C are up to R8,9bn. So Cell-C's debt is almost three times Blue Label's market capitalisation which is less than R3bn. On 25th August 2021 the company announced that it had obtained new financing for Cell-C. I On 22nd September 2022 the company announced that Cell-C would be re-capitalised with a R1,03bn injection from Bluetel bringing its stake in Cell-C up to 49,5%. The announcement caused Bluetel shares to rise. The company has been achieving positive cash flows and had the benefit of the sale of its 3G handset division - which helped to bring down debt levels. In its results for the six months to 30th November 2022 the company reported revenue up 8% and headline earnings per share (HEPS) up 14%. The company said, "Excluding the extraneous contributions of R421 million in the current period and non-recurring income of R148 million in the prior period, as illustrated in the underlying tables, core headline earnings increased by R55 million (14%) from R400 million to R455 million. Core headline earnings per share increased by 13% from 45.68 cents per share in the prior period to 51.72 cents per share". In a trading statement for the year to 31st May 2023 the company estimated that HEPS would decline by bwteen 62% and 66% as a result of the recapitalisation of Cell-C. Technically, the share has been falling since August 2022. We recommend waiting for a break through the downward trendline. On 23rd March 2023 the company announced that Douglas Stevenson had resigned as CEO of Cell C with effect from 31st March 2023.
JSE:BLU
by PDSnetSA
$JSEBLU - Blue Label Telecoms: A Very Bearish New OutlookThe telecoms look to be in for some pain in the short-term and Blue Label will unlikely to be spared. After sharing my outlook on Vodacom and Telkom yesterday as well as MTN last week, it was time to take a deeper look into Blue Label. Starting with the rally from the March 2020 all-time low of 152 to 750, this advance is best labelled as a three wave move (ABC) therefore making it corrective in nature. The sell-off from 750 for wave (A) was a strong and clear five wave impulse. The wave (B) correction was short-lived and price made a new low at 368, followed by a recovery to 483. At market open this morning, 368 was breached meaning it was not the bottom and this has triggered an update of the wave count. Looking at the bigger structure of the bear from 750, price seems to be declining in a zigzag pattern (ABC) and the stock is in the early-mid stages of wave 3 of (C). If this outlook is correct, price could decline further towards the 200 region. A break above 483 will invalidate this outlook. Until proven wrong, short the rallies.
JSE:BLUShort
by Loyiso_BlaqueSoros_Mpeta
$JSEBLU - Blue Label Telecoms: Recovery PlayBLUE had a strong sell-off in August 2022 from the peak of 750 zac. The decline to 435 zac unfolded in a clear five wave impulse pattern. What is uncertain is whether this sell-off is wave A, implying further downside, or wave C, implying 435 zac is a significant bottom. What matters in the short-term is after a five wave sell-off, as a minimum, price should recover in three waves. From the 435 zac low, price has made a sequence of higher highs and higher lows and price action is starting to look impulsive with strong volume. The current wave outlook favours that the share is in the early stages of wave (iii). There is also bullish MACD/price convergence between the lows of wave 3 and wave 5 and the MACD is gaining momentum, breaking above the zero-line. Aggressive traders can use 463 zac as a stop-loss level but the bullish short-term outlook will be invalidated once price breaks below 435 zac. I will keep a lookout for a trading update as BLU is expected to release Interim Results on Thursday, 23 Feb 2023.
JSE:BLULong
by Loyiso_BlaqueSoros_Mpeta
Blu: Another Worthy of a NibbleBlu is due a yearly low price, 9 May 2022 is plausible but not ideal as price has retraced most of the gains since then (black arrow). A strong cycle is one where higher lows take place for longer. If Blu can go lower than black arrow it would be most ideal setup for a thrust higher to recent highs. A double bottom on the green arrow is next best thing but would need careful & further analysis on a daily time frame to ensure profits are not evaporated before taking them.
JSE:BLULong
by runyamhere
$JSEBLU - Blue Label Telecoms: Trading The Reverse DivergencesBlue Label has been trending upwards in a choppy manner recently. The MACD indicator has been providing pretty accurate trading signals in this choppy market. Classis divergence is when price makes new higher highs but the MACD makes lower highs and is viewed as bearish. The lesser known reverse divergence is when price makes higher lows but the MACD makes lower lows and is R5.65viewed as bullish. The MACD has given a buy signal. trade recommendation buy-stop @ R5,67 stop-loss @ R4,66 take-profit @ R7,50
JSE:BLULong
by Loyiso_BlaqueSoros_Mpeta