Shares in JSE-listed technology group Blue Label Telecoms rose 22% over the past week. This after falling heavily during July after reports surfaced, indicating that its turnaround strategy at CellC was failing to gain traction.
There was no significant corporate news-flow during the week suggesting that there had been any material change.
In terms of media coverage, there were two main stories involving Blue Label this week:
- Government has given more clarity around spectrum in South Africa and opening up the playing field to more operators. Market commentators suggest that policy clarity will help operators provide greater access to all players. Duncan McLeod from TechCentral unpacks it here.
- Blue Label Ventures has taken a 26% stake in sports analysis startup Mobii – article here.
Key Metrics:
Blue Label trades on a forward price to earnings multiple of around 5 times earnings (Based on previous full-year earnings), but all eyes will be on the impact of CellC which swung earnings by over R1bn in the previous 6 month cycle.
If the CellC earnings were stripped out, the group would have delivered 55c for the 6 month period.
The group Net Asset Value sits at R9.67, compared to a share price of R4.30.
At the end of the November reporting period, the group sat with Cash / Cash Equivalents of R949m, representing about 96c of the net asset value.
Consensus forecast
Analyst consensus forecast on Blue Label remains a “Buy” according to Profile Data / Sharenet.