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# Blu Label’s earnings have plunged more than 80% after its Cell C deal - but it says accounting is to blame
- URL: https://www.businessbagel.com/blu-label-earnings-cell-c-accounting/
- Published: 2026-08-18T02:30:00.000Z
- Updated: 2026-08-18T02:29:59.000Z
- Description: The prepaid airtime group blames accounting for an earnings drop of more than 80%, then published a Cell C-free version that lands lower still.
- Author: Christian Maidman
- Tags: Companies, Business Bagel News

Blu Label Unlimited told shareholders on Friday that earnings for the year to 31 May will fall by more than 80%. The prepaid airtime and ticketing group, which used to be called Blue Label Telecoms, says almost none of that is about how much airtime it sold, and points instead at what happened to its stake in Cell C.

The problem is a rule about ownership. When a company takes control of another one it has to fold that business into its own accounts, and when it gives control up it has to take it out again and book the difference. Blu Label did both to Cell C inside a single financial year.

Its subsidiary The Prepaid Company got competition approval to take control of Cell C on 3 September last year, ran the mobile operator inside the group for about three months, and booked an R841m gain on revaluing the stake it already held. At the end of November, alongside Cell C's own listing, it sold down to 49.47% and handed Comm Equipment Company to Cell C, which put the whole thing back outside the group. Headline earnings per share, the cleaned-up profit figure listed companies here have to report, are guided at 79.02c to 88.14c, down from 455.96c. Earnings per share go from a 276.52c profit to a loss of about 540c.

## The number that was meant to help

So Blu Label published a version with Cell C and Comm Equipment Company stripped out: R9.4bn of revenue, R677m of net profit and core headline earnings of 75.33c a share. That sits below the 83.58c to 92.82c range it was published to explain. Taking Cell C out of the maths makes the earnings smaller, which suggests Cell C was adding to them in the months it sat inside.

## The second half

Then there is the shape of the year. At the halfway mark Blu Label reported adjusted revenue of R5bn and core earnings of 44.19c. Set that against the full-year guidance and the six months to May come out at roughly R4.4bn of revenue and about 31c of core earnings, weaker on every line.

The shares closed just under 1% down on Friday at R8.12 and are off almost 22% so far this year. The audited figures are due on 26 August.