Brett and Mark Levy's Blu Label warns earnings will crater more than 80%, but only on paper

Brett and Mark Levy are about to report a brutal-looking set of numbers, and almost none of it reflects how their business actually traded. Blu Label Unlimited Group, the prepaid and fintech distributor the South African brothers run as co-chief executives, warned on Friday that earnings for the year to May 31 will collapse by more than 80% and swing to a loss, the accounting aftershock of unwinding its stake in mobile operator Cell C.

In a trading statement, the group said headline earnings per share would fall 81% to 83%, to about 4.9 to 5.4 US cents (79.02 cents to 88.14 cents) from about 28 US cents (455.96 cents) a year earlier. Earnings per share, a wider measure, will swing from a profit of about 17 US cents (276.52 cents) to a loss of about 33 US cents (roughly 537 to 543 cents). Management stressed that this is not a trading story, but the product of how the Cell C restructuring and its listing pass through the books under accounting rules.

The distortion is real and mechanical. Blu Label's subsidiary took control of Cell C in September 2025, consolidated it for roughly three months, booked a gain of about $52 million (R841 million) on remeasuring its earlier interest, then relinquished control at the end of November when Cell C listed on the Johannesburg exchange. The company kept a 49.47% stake but stopped consolidating the operator, leaving the year littered with a partial consolidation, a one-off gain and losses on disposal.

To show what remains, the group offered a pro forma view that strips Cell C and related items out entirely. On that basis it would have earned revenue of about $580 million (R9.4 billion), core headline earnings of about $42 million (R681 million) and core headline earnings per share of roughly 4.6 US cents. That figure is smaller than the reported number it replaces, a reminder that Cell C was contributing to earnings during the months it sat inside the group, and the pro forma disclosures also point to a softer second half.

Investors appeared unbothered. Blu Label shares traded up slightly at about $0.51 (R8.28) shortly after the statement, a sign the market had long since priced in the accounting noise. The first clean look at the group without Cell C inside it will come with full results due on August 26, and it is those underlying numbers, rather than the headline loss, that will show what the Levy brothers are left running.