Blu Label Unlimited Group Limited (BLU) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Thank you for joining us remotely, and I trust you're safe and adjusting well to our new working conditions. Moving on to the highlights for the 12 months ended 31st of May 2020. At our last results presentation in February 2020, we stated that we're going back to basics and cleaning up the business. We've done just that by completing the sale of Blue Label Mobile and the handset division of 3G and have used the proceeds of the net ZAR 698 million to reduce debt. Debt has been reduced by ZAR 902 million. Blue Label has been very resilient during lockdown, given the essential nature of many of our products. Revenue, including the PINless, ticketing, gaming and other gross amounts has increased by 7% to just under ZAR 60 billion. Gross profits declined 2%, largely as a result of further moves into digital. Our online sales and margins have improved further due to early settlement discounts. The decline of ZAR 100 million in core headline earnings from trading operations was partly attributable to the starter pack distribution, our gaming vouchers and ticketing being negatively impacted during the initial lockdown period as a result of the COVID-19 pandemic. This also resulted in the group incurring a general increase in allowances raised for expected credit losses. Furthermore, exposure to the Edcon Group amounted to ZAR 41 million, net of taxation, has been provided in full. Of this amount, ZAR 21 million relates to the closure of the WiConnect retail stores, which I'll go through more later. The group is, however, solid, with reduced debt and constantly improving cash flow, which increased from a negative position to ZAR 1.3 billion for the year. Moving on to our revenue, debt and cash flow. As all of you know, historically, Blue Label's major income streams have been airtime, electricity and interest earned. As you can see from this slide, despite a significant increase in debt levels during the 2018 financial year, following the Cell C and 3G acquisitions with a consequent reduction in our interest earned, there has, nevertheless, been a consistent growth in revenue. Clearly, cash generation was impacted. In the current year, we have actively reduced interest-bearing debt levels by ZAR 902 million, beyond the net proceeds of ZAR 698 million received from the sale of Blue Label Mobile and the 3G handset division. Cash flow has, therefore, improved strongly. In post COVID-19 and the successful Cell C recap, we should be in a position to resume our dividend and buyback programs. We need to stress how imperative it is to preserve cash, given COVID-19. None of us know where this is going and what may happen if we get a disastrous second or third waves of this virus. The negative economic impact has been extreme, and we are still navigating what the future may or may not look like. As much as we know all of you would like a firm stake in the ground now regarding dividends and buybacks, in our minds, it is just a little too early to make that firm commitment. We will, however, reconsider it at the Board after the recap is successful, and hopefully, at our next Board meeting early in the new year. Moving on to COVID-19 impacts. Blue Label moved quickly to adjust to working from home conditions, including a fully functioning remote customer interaction center as we showed our resilience by continuing to deliver essential services, including electricity, airtime, data and other digital services, as well as providing financial and transactional services. The COVID-19 lockdown has not impacted negatively on airtime, data and electricity sale volumes. The group's digital expertise has enabled uninterrupted access to all of our products and services through banks, formal retailers, independent retailers, petroleum forecourts and spaza shops across South Africa. Interestingly, we have noted an increase in the productivity of our people as they strive to continue delivering innovatively, and we're proud to have launched new digital products and services despite the COVID chaos. The group retail business, WiConnect, starter pack distribution, gaming vouchers and ticketing, were negatively impacted during the initial lockdown period. Starter pack distribution and gaming voucher trading volumes are now back to pre COVID-19 levels. COVID-19, however, had a significant negative impact on the retail operations of WiConnect. WiConnect's financial feasibility was impacted by the losses directly attributable to the lockdown and by the uncertainty of the duration of the pandemic. A decision was made to cease the operations of the WiConnect retail stores. This resulted in a negative impact of ZAR 318 million on the group's basic earnings and ZAR 183 million impact on headline and core earnings for the year ended 31st of May. The actual cash outflow required for the closure of the stores will, however, be confined to approximately ZAR 30 million. Challenging economic conditions and unfavorable trading environment, margin compression as a result of reduced incentives from the networks and an increase in product costs exacerbated by COVID-19 necessitated impairment of goodwill in Blue Label Connect of ZAR 157 million, a partial impairment in Glocell Distribution of ZAR 57 million and a fair value downward adjustment of the Glocell loan, net of taxation, of ZAR 47 million. I'm proud of the technical prowess of the company and its people, and we look forward to emerging from the COVID-19 crosses with reduced costs of acquisition and further improved innovation and flexibility. Moving on to the performance of SA Distribution. In the previous slide, I spoke about some of our product performances. This slide is highlighting the continuing changes in consumer buying patterns. Off-line or digital purchasing continues to grow for our core products, airtime and electricity. We have previously said that we expect this trend to continue, and COVID-19 appears to have, in fact, accelerated this move. Interestingly, our value-added services products are growing strongly in retail, informal and into a less extent, petroleum markets. Money transfer products have shot the lights out in informal markets. The lockdown can only have contributed to the growth. Blue Label remains a magnet for foot traffic into shops, and our job is to keep strengthening that pool by offering more and more products of the same infrastructure. The portfolio of products and services differentiates from our competitors in informal markets and remains a drawcard for entry into the corporate market. Moving on to our channel performance in SA. The COVID shutdown has been devastating for many of our clients and has accelerated the move to digital buying habits. The corporate channel, including banking, continues to take market share. And as I've said before, the banks remain true powerhouses in South Africa. Unlike many other African countries, consumers appear to be most comfortable having digital wallets restricted to banking channels. This may change as the market becomes more sophisticated, but in my view, the banks will be difficult to dislodge. The petroleum market remains stagnant and price-sensitive as many traders use this market as a cash flow rather than a profit center. We have, however, secured new retail and financial customers who we expect to contribute to our FY '21. The lockdown did have an impact on our starter pack distribution but appears to be coming back online now. We continue to develop systems to identify and secure quality customers, reduce our churn and, of course, incentivize retention. A lot of focus has been put into community groups like churches and stockpile associations where we can design bespoke incentivation bundles. We moved very swiftly to get our customer interaction center operational remotely as soon as we went into lockdown. This center is vital for maintaining intelligent vigilance of our customer behavior, dealing with any technical issues and making customer aware that we are always there for them. It also reduces our cost of servicing customers and assist in making sure that devices are being used to their full capacity. The center continues to improve on its performance, and customers have indicated that they're happy with our new approach. Moving on to our informal market with financial inclusion remains Blue Label's driving philosophy. We launched Blue Label back in the late '90s to take advantage of the explosive growth in prepaid airtime and to make sure that all South Africans could access this product safely and conveniently. Financial inclusion remains our driving philosophy. We need to take more down to local communities so they can do more with the cash they have and save transportation costs. Our informal base of traders continues to grow. And if you look at the graph on the right of the slide, you can see the explosive growth of financial service products into this market. Other products are also growing, and we look forward to ticketing returning strongly once the lockdown eases further. Ticketing is a differentiator for Blue Label and is a significant drawcard for both merchants and customers. We have launched 2 new products, which should increase convenience and flexibility for our customers. The first one, RINGAS, a universal prepaid airtime voucher, capable of redemption on any of the 4 major South African mobile networks; and secondly, the BLU VOUCHER, a single secure prepaid voucher allowing consumers to pay, deposit and top-up their accounts with any of our online partners. The customer interaction center is vital for this market and provides us with intelligent analysis of merchant trading patterns, which assists in the targeting of both product and credit into this market. We pride ourselves in being particularly proactive with regard to training and marketing support for our traders as we aggressively grow market share. Moving on to CEC or the Comm Equipment Company. We have decreased debt by ZAR 950 million over the past year, and debt stood at ZAR 716 million as of 31st of May 2020. What is important to notice from a sustainable income generative perspective is that despite the significant debt decrease, the book has only decreased by ZAR 185 million from ZAR 2.94 billion at the end of May. Strong collections and better deal structures from Cell C have led to an improved book. As I've told you in the past, this is one of the companies to watch very carefully in the Blue Label stable. We are proactive. We are changing how we deliver goods and what we can offer as a service of the product and to our merchants as well as our customers. Moving on to Cell C's turnaround strategy. The turnaround strategy is driving positive change in the business, and the Cell C of the future will be lean, agile and highly responsive. We have put in a liquidity platform to take us to the time of Gatsby or rather known as a recapitalization of Cell C. Our network strategy, implementation of the extended roaming agreement with MTN commenced on the 1st of May 2020, and enables network innovation, promote sufficient network infrastructure, utilization and sustainable investment in network infrastructure. From operational rationalization, the company has taken active steps to reduce its focus on pure revenue and subscriber growth to focus on profitable long-term growth. There's unrelated focus on cost-cutting and is a change in the operating model from build, own and run everything to focused investment, partnering and a buy our services. On the Cell C recapitalization, it is a complex restructure with multiple stakeholders involved. Good progress is being made, and the final step will be in the term sheets. Moving on to the operational overview for June 2019 to May 2020. We maintained revenue while rightsizing the customer base and improved EBITDA. This is aligned to the last set of results reported by Cell C and indicates that the turnaround strategy is delivering improved operational efficiencies with the positive impact of these changes flowing through during the latter 6 months of the reporting period. The evolution of the customer base in pursuit for profitability. This graph tells the story of how Cell C is focused on profitable and long-term growth and has made significant strides in this regard. There is a focus beyond pure revenue and subscriber growth. While there's been a decrease in the customer base, service revenue remains comparable year-on-year. Cell C plans on doing their own road show and their own presentation to the market by the first week of October. I'll now hand you over to Mark.

Thanks, Brett. Moving on to Cigicell. We see another stellar performance from Cigicell in electricity, where gross electricity continued to grow and show resilience by increasing 13% to ZAR 22.7 billion. We have seen a change in consumer buying patterns as people are starting to work more from home during the COVID period of lockdown level 5. We're seeing people that are recharging more in the mornings rather than the evenings as they're spending more time at home. And what we have seen is the increase in spend during this time as well. We saw strong results during March, April and May and also focused on launching what we call a FBE token, a Free Basic Electricity token, which allows people to reload and top-up their Free Basic Electricity through a USSD or WhatsApp mechanism. This helps with annual registration and allows indigent consumers to receive safe and convenient FBE tokens on a monthly base. The business is made up of 2 streams: revenue collection and revenue protection. And our revenue collection side focuses on the sales of prepaid water and electricity tokens. Our bill payment solution also now falls under this division, offering most bill payments, including the likes of traffic pods. We also provide an ERP and billing software to help run the back office of municipalities and also are focusing on bulk buying of our tokens. Where necessary, we're offering project funding at minimal risk. On the revenue protection side, we look at doing electricity and water meter audits and replacement, credit control services and data cleansing to ensure that the correct amounts are being billed to the correct people. We offer geospatial services and indigent registration services. Moving on to Blue Label Data Solutions. COVID-19 severely interrupted operations for both us and our consumers, especially over April and May. We had to furlough about 800 of our own call center agents during this period. Intensive efforts have been made to get our agents to work from home and slowly integrate them back to work as the lockdown reduces from level 5 to level 2. Currently, we have over 526 agents working from home and 400 back in the office. The long-term intention would be that about 50% of our staff would work from home in the future and 50% of our staff would work from the office. BluNova is the custodian of all Blue Label's data. It provides intelligent data analytics, consumer profiling to provide intelligent leads to our internal companies. We have recently deployed FICA, which is a world-leading decisioning engine, becoming a leading practitioner of data and decision science in South Africa. Our opt-in database sits at about 28 million people, growing by 100,000 per month. We've also focused on strengthening our in-house compliance and legal expertise to ensure that we can deal with all the various acts at POPIA and CPA and others. COVID has forced every company to look at lowering the cost of acquisition and finding new customers. And this, we can help them achieve utilizing data science. Ticketpro was on track for its most profitable year until COVID struck at crippling the industry as there were no events, expos, concerts and travel. We used this time to rebuild, technically develop and improve our systems and infrastructure. We also continue to expand the largest ticketing footprint in South Africa. Whilst in lockdown, we launched an online streaming platform called Covid Zero to maintain relevance. This provides artists and fans a platform to share content safely. Covid Zero empowers artists to not only raise funds for themselves but also charities for the less fortunate. To date, we have bought thousands of face masks, hand sanitizers and food parcels. Many shows that have been streamed on Covid Zero can also be found now on box office. In November 2020, we plan to launch South Africa's first truly all-in-one fan-based experience platform, innovating the events industry. This will allow for online streaming, cashless payment solutions, WiFi at events. We've also innovated an NFC transport technology solution, making commuter travel safe and more secure. Moving on to technology. Blue Label is a technology company. One of our key drivers for our future is digital innovation, and this has stood us well in the disruption caused by COVID. Through our digital capabilities, we have accelerated our go-to-market strategies in our digital transformation pipeline, while entrenching our entrepreneurial culture and ensuring that we keep improving on being an agile company, which will ensure that we're able to deliver on our strategic growth objectives. We've innovated new tokenized products, food vouchers with cash redemptions, virtual vouchers for partner redemptions like BLU VOUCHER, an airtime voucher called RINGAS, and we're allowing consumers ready digital redemption mechanisms via USSD or online. We've also expanded our consumer experience with a universal bus flow, which allows our customers to walk into an environment and pick a bus ticket based on cost, depending on which route they want to go, which is quite innovative in this country. We also added a whole lot of new long-haul bus transport companies. Hyperautomation assists and improves the merchant and customer experience, and we've expanded our stack of software to empower the citizen developers to fast track our go-to-market strategy. Employees have also been enabled to fully work from home. We continue the expansion of our digital footprint by growing our active points of presence by over 5% in the main market, retail and petroleum channels. We enable payments mechanisms into trusted consumer apps to purchase our various products. We've also created the ability to white label our tech offerings and develop bespoke content and services required in specific communities. Our technology, security, risk and compliant. The specific concentration on scalability and platform refractory. To ensure high-speed throughput, we've expanded our hybrid cloud strategy, further enabling uptime of business-critical solutions, infrastructure and software investments to improve stability and ensure future capability and capacity requirements. We've also simplified our integration mechanisms to enable our future strategy of an open integration gateway and marketplace. Significant investments were made for additional redundancy, improved stability, business continuity. We've recently deployed an Activ Activ environment, which will ensure that we have an always-on environment. Transaction success rates have increased beyond 99%. Our transaction volume growth are over 20% on an annualized basis, and we've had a 71% reduction in production defects from prior years. We focus on new frameworks for cybersecurity and governance as security is a top priority, hence ensuring additional vigilance and compliance with all the various acts, POPI, GDPR and the Electronic Communications Act. Compliance and vulnerability checks have been enhanced and further entrenched in our approach to enable a data-driven model. We have defined our technology road maps to ensure our future strategy is achieved, and our increased security investments have resulted in a zero impact and reliable ecosystems of our platforms in our landscape. Thank you, everyone. I'll now hand you over to Dean to take you through our financials.

Good afternoon, ladies and gentlemen. The performance of the Blue Label Group was resilient in an adverse economic environment. In spite of certain restrictions caused by the COVID-19 pandemic, the group has continued to deliver essential services, including electricity, airtime, data and other digital services, as well as providing financial transactional services. The lockdown regulations and the downturn in economic activity have not impacted negatively on airtime, data and electricity sales volumes. The financial highlights for the year ended to the 31st of May 2020 were as follows: successful completion of the disposal of the Blue Label Mobile Group and the handset division of 3G Mobile; revenue of ZAR 21.1 billion; on inclusion of the gross amount generated on PINless top-ups, prepaid electricity, ticketing and gaming, the effective increase equated to 7% from ZAR 56 billion to ZAR 59.9 billion; gross profit of ZAR 2.12 billion; increase in gross profit margins from 9.21% to 10.05%; EBITDA of ZAR 1.21 billion net of extraneous expenditure; net cash generated from operating activities of ZAR 1.3 billion against cash utilized of ZAR 81 million in the prior year; interest-bearing borrowings reduced to ZAR 2.3 billion from ZAR 3.2 billion in the comparative year; core headline earnings of ZAR 0.8613 per share on exclusion of the negative contributions by the ceased operations of WiConnect and fair value downward adjustments. Core headline earnings for the year ended 31st of May 2020 amounted to ZAR 562 million, equating to core headline earnings of ZAR 0.6271 per share. Core headline earnings for the year ended 31st of May 2019 amounted to a loss of ZAR 2.78 billion, equating to a negative ZAR 3.0477 per share. The predominant negative contributions to group earnings in the prior year were attributable to Cell C trading losses, the impairment of its property, plant and equipment, the impact of the derecognition of its deferred tax asset, and the consequent impairment of Blue Label's total investment therein; with fair value downward adjustments on the complete exposure relating to SPV1 and SPV2 and the Glocell loan; there were partial impairments of goodwill relating to Viamedia and Blue Label Connect and an partial impairment of the investment in the SupaPesa joint venture; an impairment of Blue Label's total investment in the Oxigen India NGO group, including 2DFine Holdings Mauritius, as well as providing for loan impairments and guarantees payable thereon; there was expenditure within the retail division of the WiConnect stores and once-off expenditure and income. The predominant negative contributions to group earnings in the current year were attributable to: with fair value downward adjustment of the Glocell loan, an unrealized foreign exchange loss on the USD 20 million liquidity support provided to SPV2; there was extraneous expenditure within the retail division as a result of the closure of the WiConnect store; and once-off expenditure and income. On exclusion of these extraneous costs of ZAR 210 million in the current year and ZAR 3.66 billion in the comparative year, core headline earnings from trading operations declined by ZAR 100 million, 11% from ZAR 872 million to ZAR 772 million, resulting in core headline earnings of ZAR 0.8613 per share. Core headline earnings from the current year after the exclusion of extraneous cost comprised ZAR 632 million from continuing operations and ZAR 140 million from discontinued operations. The decline in core headline earnings of ZAR 100 million was primarily attributable to starter pack -- the starter pack distribution, gaming vouchers and ticketing being negatively impact during the initial lockdown period as a result of the COVID-19 pandemic. This included the group having to incur a general increase in allowance raised from expected credit losses and the exposure to the Edcon Group amounting to ZAR 41 million net of taxation. Of this amount, ZAR 21 million related to WiConnect retail stores. Group revenue generated by continuing operations within the group declined by 10% to ZAR 21.1 billion. As only the gross profit earned on PINless top-ups, prepaid electricity, ticketing and gaming is recognized as revenue, on imputing the gross revenue generated thereon, the effective growth in revenue equated to 7% from ZAR 56 billion to ZAR 59.9 billion. Of the gross revenue, telcos accounted for 58% and nontelco products and services for 42%. Gross profit declined by 2% from ZAR 2.17 billion to ZAR 2.12 billion partially limited due to an increase in margins from 9.21% to 10.05%. The increase in EBITDA of ZAR 568 million was attributable to the movement in extraneous costs of ZAR 679 million. In the current year, these costs amounted to ZAR 388 million, of which ZAR 66 million pertained to the fair value downward adjustment of the Glocell loan, ZAR 49 million to the unrealized foreign exchange loss on the USD 20 million SPV2 liquidity support, there was ZAR 157 million to an impairment of goodwill relating to Blue Label Connect, ZAR 57 million to the partial impairment of goodwill relating to Glocell distribution and ZAR 59 million to once-off expenditure. The comparative year included extraneous costs of ZAR 1.1 billion, of which ZAR 874 million pertained to the fair value losses relating to SPV1, SPV2 and the Glocell loan, and ZAR 193 million to guarantees payable and loan impairments recognized on behalf of Oxigen Services India. On exclusion of these extraneous costs, both in the current and comparative years, EBITDA declined by ZAR 111 million to ZAR 1.21 billion. No further fair value losses relating to the SPVs, with the exception of the unrealized foreign exchange loss on the USD 20 million SPV liquidity support were recognized in the current year, as the exposure there to was fully accounted for as at the 31st of May 2019. As the carrying value of Blue Label's investment in Cell C was fully impaired for the year ended 31st of May 2019, the financial results of Cell C did not have any impact on Blue Label's earnings for the current year. The Blue Label Group generated positive cash flows from its trading operations for the year ended 31st of May 2020. This, together with the proceeds received from the disposal of the 3G handset division and the Blue Label Mobile Group, have been applied to reduce interest-bearing debt, resulting in the strengthening of the group's balance sheet. Moving on to the balance sheet. Total assets decreased by ZAR 1.7 billion to ZAR 10.4 billion, of which noncurrent assets accounted to ZAR 1.1 billion and current assets for ZAR 0.6 billion. The net decrease of ZAR 21 million in investments in and loans to associates and joint ventures comprised the group's net share of profits totaling ZAR 15 million; its share of the movement in foreign currency translation reserves amounting to ZAR 11 million; offset by loan decreases of ZAR 21 million; disposals of ZAR 21 million and the dividends received of ZAR 6 million. Of the net decrease in intangible assets and goodwill of ZAR 1 billion, ZAR 53 million was attributable to the impairment of goodwill relating to the disposal of the handset division of 3G Mobile and Blue Label Mobile; ZAR 682 million to the disposal of these subsidiaries; ZAR 151 million to the amortization of intangibles; ZAR 259 million to the impairment of goodwill; and ZAR 22 million to disposal of intangibles. These decreases were offset by additions to intangible assets of ZAR 31 million and foreign currency adjustments of ZAR 29 million. The material net decline in current assets included decreases in inventory of ZAR 938 million and trade and other receivables of ZAR 328 million, offset by increases in cash and cash equivalent of ZAR 629 million and advances to customers of ZAR 200 million. The stock turn from continuing operations equated to 11 days compared to 21 days for the financial year ended 31st of May, 2019. The debtors collection period from continuing operations increased to 57 days compared to 50 days for the financial year ended 31st of May 2019. Net profit attributable to equity holders amounted to ZAR 124 million, contributing to accumulated capital and reserves of ZAR 2.5 billion. Net borrowings decreased by ZAR 917 million. Trade and other payables decreased by ZAR 760 million, with average credit terms from continuing operations equating to 80 days compared to 78 days for the financial year ended 31st of May, 2019. Moving on to the cash flow. Cash generated from trading operations totaled ZAR 1.7 billion. Working capital movements comprised an increase in trade receivables of ZAR 148 million; an increase in advances to customers of ZAR 65 million; and a decrease in trade payables of ZAR 397 million; offset by a decrease in inventory of ZAR 795 million. After incurring net finance cost and taxation, net cash generated from operating activities amounted to ZAR 1.3 billion. Net cash flow from investing activities amounted to ZAR 454 million, primarily attributable to the receipt of funds net of cash disposed, amounting to ZAR 698 million from the disposal of the 3G handset division and the Blue Label Mobile Group; proceeds received on the disposal of capital assets of ZAR 34 million; dividends received from associates and joint ventures of ZAR 6 million; offset by the purchase of intangible assets of ZAR 31 million; capital expenditure of ZAR 139 million; and net loans granted of ZAR 127 million. Cash flows utilized for financing activities amounted to ZAR 1.1 billion, of which ZAR 902 million related to the net decrease in borrowings; a dividend payment of ZAR 67 million to noncontrolling interests; lease payments of ZAR 53 million; the settlement of a financial guarantee amounting to ZAR 44 million; treasury shares acquired of ZAR 46 million; offset by ZAR 34 million from the dilution of shares in a subsidiary. Cash and cash equivalents accumulated to ZAR 2 billion as of the 31st of May, 2020. I would like to take this opportunity of expressing our appreciation to the Board for their support throughout the year. Thank you. The floor is now open to questions.

Good afternoon, everybody. Thank you for coming on the web and on the call to Blue Label's year-end results for May 2020. Hope you and your families are all good and safe and healthy through this really difficult time. I'll now open it up to questions. We'll deal with the questions on the call first.

We have a question from [ Philip Short ], who is a private investor.

I have 3 questions. I was going to ask them back to back. On the first one, maybe if you can just update us on what trading has been like in June, July. I've seen another airtime player showing double digits or 20% growth year-on-year on their sales. Just wondering are you guys in? That's question one. Question two, your net debt-to-EBITDA is sitting now at about 0.3x, which is pretty low. But I do realize that you got to see cash on hand to do bulk buying. My question is, would you guys -- once you do post recap to reinstate the dividends or a buyback, would you guys look to actually tap into debt to do a buyback? So what type of net debt-to-EBITDA levels are you looking at? And then just lastly, Brett, you talked about CEC, but there's just 1 slide on it. Maybe you can just give a little bit of detail on the book that's reduced by ZAR 185 million, but -- or sorry, the debt reduced by ZAR 950 million, but the book only by ZAR 185 million.

Let me start your first question. Trading for June and July has been solid. The only one, obviously, as we've mentioned in the past, is our ticketing side that was really hammered severely during COVID. Of course, there was no transport ticketing. There was no game ticketing or event ticketing. We have seen a slow comeback on the transport ticketing side, which is really good. Obviously, on the game ticketing, it will slowly open but not much. And of course, as you know, in the event ticketing nothing happening. What's been really positive there is the innovative ideas that our team has come up with. If you guys go to transco, have a look at DSTV, we already got 2 streaming programs on DSTV. It's really well received at the moment. So we are coming up with innovative ideas. So we'll push through the COVID on the ticketing side. But on the electricity side, the data and the airtime trading is solid. We see no slowdown, which is good. And we don't expect any slowdown. So what we are seeing, as we've always told you in the past, please measure our revenue from both the PIN and the PINless as you have to impute the PINless back into our revenue line because it's just really a matter of how people are transacting and their difference. And overall, our revenue was up, as you saw, 7% for the year. So for the year good, for June and July, I think, pretty solid, and we see no slowdown in it. The other impact that was not really on our revenue line, but our starter pack side, which we obviously were hammered in the months of April and May due to not being able to get out any new SIM packs. That had an effect on our GP line and our profits directly related to COVID. But proudly tell you that from June onwards and July, we pre COVID numbers and actually a little bit ahead, which is good. On your second question, I think, we went to the market. We told you back to basics. We really have strategized around this. We really have stuck to our guns. We think the underlying core performance, as management, we think, is pretty solid. And what we were trying to do on the debt and what we finally achieved actually was a bit better, to be honest. Obviously, the sale of BLM went through even though there was COVID, the 3G sale went through just before COVID in February, all according to plan and exactly what we had promised the market, along with great trading through the time and great generation of cash. We brought our debt levels down actually a little bit below to than what we thought we would. Are we comfortable with it? Absolutely. Are we looking to decrease even more? Not really. We think our debt-to-EBITDA ratio, not that we ever believe it was totally out of sync, but obviously, with what happened with Cell C, we found ourselves having to make sure we realigned it, which we did. So our debt-to-EBITDA ratio is definitely in line and powerful. Will we look to dividends and share buybacks? Absolutely. I think, in fairness to everyone in the world and in South Africa, there are 2 things that we are looking to, just very short term. One is the recapitalization of Cell C, which I'll touch on later, I'm sure in a question that -- I know it's taken longer than we promised everyone, but this has been extremely complicated. And I think people just have to appreciate the complexity of it. And I think really just play out this year, more of the same. We don't know what lies around the corner with COVID. Although we are trading well, and we are, I would say, pretty excited for the next 12 months, we have a lot in the pipeline. I think you've got to take a cautious view. So for us, it's about the recap, which we believe will take place this year. It's about getting to December, getting through December, I guess, this year and reconvening as a Board in January, February. And then looking at 2 things -- 3 things. The first 2, as you say, is dividends and share buybacks, especially at the price -- you've always had our view of the price. And as a share buyback would be better than any acquisition we could do, not that we're trying to do any acquisition, by the way. And the third thing is, obviously, once our debt is where it is and everyone is comfortable, the recapitalization has taken place, I have no doubt we'll have a look at taking on more debt, if necessary, to trade. So only trading debt, not debt for acquisition or anything. So yes, I think in answer to your question, we've taken all of it extremely seriously. And really just playing out this year. As I said, the 2 things is the recap. And the second one is, of course, just being cautious around COVID. On your third question around CEC, I know I've mentioned in the past that this is one for everyone to really watch because we are doing some really interesting products and things in this company, and it's already proven to be a very, very serious business. We basically have 3 revenue streams in it, and we will look to even increase that into the future. The first revenue stream, as you're all aware, is the postpaid book. The second one is DSTV decoders. And the third one is what we're looking around doing in the municipality world with endless opportunity there. We are looking at another 2 or 3 opportunities in it. Just to remind you, we don't take debt on like a normal institution. So we're not putting Blue Label at any risk. Our debt is very different. It's income-driven. We have a single entity that stands good for it after the actual consumer themselves. So we have a double line. So it's really a different model. The RP and the systems behind it are, we think, extremely smart. I mean it's a company that only employs 9 people, just to tell you in total. And it delivered over ZAR 200 million of net profit for the group. I know some of the questions are coming through. So I just want to touch on one of them because -- just to avoid confusion. CEC was part of a bigger group, which was 3G. And we had reported 3G as a whole, which obviously included the whole handset division of it. As you know, that's the handset division that we disposed of in February for ZAR 604 million, which was ZAR 544 million in the equity value and then the remaining NAV that was collected of ZAR 60 million. So we got to ZAR 604 million. So on a like-for-like comparative basis, if you take last year to this year or rather take the first half to the second half, we made approximately after tax ZAR 213 million. So an after-tax amount, which is obviously becoming a very considerable amount in our group and with a lot of great opportunities in the future, CEC is a good one for us. Hope that answers it full. I think if there's anything more you want to know specifically about CEC, we can always have a conversation after this with pleasure.

There are no further questions on the conference call, sir.

Okay. So I will move to questions that have been sent through to us. Just refreshing. Okay. The first question is from [ Amit Singh ]. Hello, Amit. How are you? What is the group's sustainable inventory level, assuming ticketing, et cetera, return soon? Please provide a more recent inventory balance. I'll answer that as well. So obviously, just to remind you, in certain products, we hold the inventory. So in the form of ticketing, we don't hold inventory. Inventory is held in the PIN world and mainly in the telcos world. Our sustainable level is around ZAR 400 million to ZAR 600 million, which you would have seen, we -- one of the other things we said to the market. We see inventory as cash, and that's exactly what it is. We brought our inventory down considerably for the year, and that's obviously one of the ways of just converting that inventory into cash. Our sustainable amount, as I said, is between ZAR 400 million and ZAR 600 million, and we are approximately sticking to that at the moment. That doesn't discount, [ Amit ], a point in time where we do bulk buying. So everything is about timing. We might do a deal that falls part of a half year that we're ending in or full year. But as a whole and as a concept, it's the ZAR 400 million to ZAR 600 million, but it doesn't stop us from doing bulk buying. And the bulk buying amounts we can do up to whatever amount makes sense for both us and who we're buying it from. So I hope that answers the question. The next question is from [ Manura Carver ] from Nedbank. Please, can you explain in more detail the reason for the qualified ordered opinion? How is Cell C's ability to continue as a going concern affect Blue's ability to continue operating as a going concern, given that you have written the asset down to zero? Handing over to Dean.

Hi, everyone. I think it's vital that we take you through this qualification. If I can take you back to May 2019, if you recall, we had 3 qualifications or 3 points of qualification on our opinion. As everyone recalls, we wrote down our asset of Cell C, which was ZAR 6.1 billion, which we wrote down to zero. When we did that, we, as Blue Label, assumed the going concern assumption. And thus, when you write-down the asset, you need to first equity account the losses down and the remaining amount you need to impair. So if you will recall, we impaired ZAR 2.5 billion, and we wrote down equity accounted ZAR 3.6 billion of the ZAR 6.1 billion. The qualification was that if Cell C was not a going concern or proves not to be a going concern, the auditors couldn't say whether those 2 lines were correct. So the full amount of ZAR 6.1 billion was correct, but they qualified the 2 lines on the basis that the one line could be more or the other line could be less. The second point, which we qualified, was in terms of your HEPS calculation, you would add back the impairment of Cell C. So they qualified that, that amount added back maybe incorrect or it is correct, but they cannot verify it currently. And the third point was in Note 0.21 -- 2.1 in the summarized condensed financial statement we give both the income statement and balance sheet of Cell C. So they have to qualify that, that note may be materially incorrect. So if we look at the effects on the current year, where the qualification comes as we're saying, the prior year figures, those 2 lines as well as the prior year notes has been qualified. And the qualification in the current year is that we still need to include Note 2.1, which shows the income statement and balance sheet of Cell C. So we're qualifying that, that note may be materially incorrect. It does not affect. That's the vital point. It does not affect Blue Label's income statement, balance sheet and cash flow. It's specifically related to Cell C continuing as a going concern, and it has no effects on the results that we presented in our financial statements.

Thank you, Dean. I hope that answers the question. Moving on to the next question from [ Nick Dreyfus ]. Guys, please, can you run us through the longer-term plans with CEC in the book? Expectation was for the Cell C postpaid portion of the book to run off. Is this still the plan? [ Nick ], the longer-term plan of CEC is to build our book. There's a question further on down, just by the way, which is quite similar to yours, so I'll try answer them both in one. We hope it grows. We -- our model behind it has the capital to do it. It's -- we have 2 very separate treasuries in Blue Label, just to tell you that. We have a main Blue Label treasury, which is a treasury that controls absolutely everything in the group, except for CEC. We then have a CEC treasury, which is a stand-alone treasury, so treasury A and B. They work completely independently of each other, and they're not reliant on each other. So I think that's very important to understand, and we will keep them separate for exactly that reason. So one is we hope to book increases. Our model shows with the increase what it means, and the proof will be in the pudding of what we show. The runoff of the Cell C book is a great question. It is still ongoing and is still happening. It will be running off. As you know it, there'll still be Cell C subscribers. It's how the book is done, and the growth will come through what we call book B, which is a new book. So where we expect growth is on the DSTV decoders. We expect that to stay pretty consistent to where it is. We're happy with the amount invested in it. Although there's opportunity for more in DSTV decoders, we are comfortable with that amount. On the postpaid book, we are happy to go larger in the deal struck that -- deal contract that we have. And on the municipality side that we will bring more information as our proof of concepts finish and that we're ready to go. We'll show you what we're doing on the municipality sides as well. So I think in short, we hope our book grows. We have the capital separate for it, so we're not going to dig into the core business, or harm the core business. In fact, it will help it tremendously because they complement each other tremendously. And yes, you will see the wind down of book A and the start of book B, which we hopefully commences -- which we told you was meant to commence already, will commence by the 1st of November. So I hope that answers your question. Next one is also from [ Nick ]. Slide 22, full year prepaid airtime data and related revenue grew 5%. Second half declined by 2% year-on-year in the context of service revenue growth reported by the telcos. Please can you provide some detail on this number. Can I see Slide 22, please? Or just give me the numbers there. [ Nick ], so you're correct. We declined from around ZAR 17.2 billion, down to ZAR 16.9 billion, which is 2%. So not much of a decline, but yes, a decline of 2%. Obviously, on the products that never had any revenue that stopped entirely from a ticketing point of view from a gaming point of view, and from all the products that were affected directly by COVID. As we said to you from an airtime and data perspective, we are seeing some great growth, and we haven't seen a slowdown in June and July. Moving on to the next question from Myuran Rajaratnam. Can you talk to the reasons for the unwind in inventory? Furthermore, is the inventory unwind likely to reverse CEC book? What is your expectation with...? Okay. So CEC, I'll come to next, what is our expectation of the size. I think we've answered enough on CEC for now and given you a nice look into what we're doing there. The decrease in inventory is really what we are doing is less bulk buying as we generate more cash and start to create a war chest of cash again. We've converted a lot more of our inventory into cash, doing a lot less bulk buying. But yes, as you rightfully say, there's a point in time in the year that this will reverse. Hopefully, it does reverse because bulk buying is extremely good for us as a group. It's extremely good for us from a GP level and, of course, the bottom line level. So we'll try and maintain it at the ZAR 400 million to ZAR 600 million mark, as we said, and should it increase, it will be because of bulk deals that we're doing across the board with all of our products, not just on telcos. And I think that's a very important statement to make. This is not just a telcos play of bulk buying. In fact, it's across the board for the first time. Moving on to the next question is from [ Paul Woodburn ]. SA telco distribution, why are the independents declining so much? Is this Blue specific? Have we lost market share to FLASH or just the overall market shift into PINless? So [ Paul ], when we spoke about the independents declining, we spoke about it specifically and only in the COVID period. We're in the COVID period of the end of March to almost level 3 lockdown. They were a lot of foreign independents that weren't allowed to trade. They never got licenses to trade. There were a lot of independents that couldn't open. So it's not that they're declining at all. In fact, the market is shifting extremely into 2 places. One is into the independent world. And the second one is into the bank world or the online world. So that's where the shift is taking place. The decline, as I said, is specific to COVID and for specific reasons, as I've explained to you, but our independents grew by around 50% to 60%, our distribution points for the year. So a really big number. And we don't expect any slowdown. So we go in really hard into the independent world, not only on the product that you know. I think what's important is independents are becoming a distributor of all our products. So that's very exciting. On the part of FLASH, just to deal with it, FLASH is a great competitor. As you know, they are part of the Pep (sic) [ Pepkor ] Group. There is a place in South Africa for FLASH. There's a place in South Africa for Blue Label. And I have no doubt we will go up against each other for many, many years to come, and we look forward to the competition. The next question is from [ Shane Watkins ]. What is your goal in the Cell C recap? Are you just trying to keep the company operating, so that you can continue to trade with them as an essential business partner? Or do you also want to try recover some value from your equity stake, which is completely written off? [ Shane ], I cannot express this to you enough. We have only one objective, and that is to recover all our money, just by the way. Can we recover it? Time will tell. I think we are down the road and down a long road. This recap has been extremely complexed. When you're dealing with 2 Chinese banks, you're dealing with 2 Chinese vendors, you're dealing with listed bondholders, you're dealing with unlisted bondholders, you're dealing with Lebanese banks and you're dealing with South African banks. I know we have promised to have this over the line sooner. It's not through lack of effort. The effort being put into this, you can't put in more. And we really believe the inroads we have made are tremendous. We are right there near the term sheet part of it, the umbrella agreement, as you would call it. And as I said, we are really expecting this to be done this side of the year. We are not doing it to keep operating. That's part of it. But we are doing this to make sure that the money we lost for shareholders, we get it back. So we will and we are going to try our best, and we are winning at the moment to recapitalize. That's project Gatsby that you would have read. That's project Gatsby to recapitalize Cell C, and we are confident that we will reverse the wrongs we did to shareholders in writing off this investment. Next question is from [ Paul Woodburn ]. I think I've answered the question on CEC, [ Paul ], so not to repeat it again. If there's anything more that you want on CEC, obviously, as we say, we're always happy to take it offline and deal with it later with you. Moving to [ Nick Dreyfus ]. Blue spent ZAR 5.5 billion on Cell C. Let me just read it -- which has been written off down to 0. What is the possibility of the recovery? Can you run through some options that are going to help the valuation? So [ Nick ], I think we've answered most of your question. Sorry, I'm just trying not to repeat the same questions or the same answers twice. We will, obviously, in time, give you all the information that you require to remodel it. Very difficult for us to give you it at this time is -- if there's a little bit of uncertainty of how the umbrella looks, who's getting what, who is not getting. But we, as I said, are very close to that position. And as soon as we can release information that can help you all with the revaluation or how we see it at least of Cell C, of course, we will release that information as soon as possible. Next question is from [ Paul Woodburn ]. And I'll hand it to Mark. What are the product examples of financial services and gaming, be that sell through your platform?

So we have a whole host of different products, a lot of the gaming -- online gaming products. We allow them to buy vouchers from us and then redeem them on their various playing platforms. Money transfers a lot in the static regions, allow people to buy vouchers and then send money across border to wherever, Zimbabwe, Botswana. All those regulatory frameworks are then handled by the suppliers of those products. So we're actually a distributor for them. There are other products. We do lotto through our environment. We're looking at various insurance types of products that we can sell on behalf of third parties. We're looking at products where we provide a neutral platform, if you want to call it a virtual debit card type of scenario, to allow any person with a small product offering to allow cash consumer to buy their product and redeem it against there. So the whole world is opening now for cash consumer to buy a product that he can trade with online.

Thank you, Mark. The next one also from [ Paul ] for you. What is Mexico worth?

Well, as we stated in our press release that we're in the final throngs of disposing of our share in Mexico. Once that is finalized, we will disclose exactly what the amount that we sold it for. At this stage, we cannot disclose it.

Thank you. Next one is from Brad Virbitsky. Would you talk about the economics of the on-premise and online top-ups are different? How much of the online top-ups are from Capitec? And why don't the banks go directly to the telcos at some point? So the economics, Brad, are -- in the online world are actually better for us than the off-line world as the off-line world comes with a lot more expenses. So it's not that the online is a great margin to start, but it's that the expenses that sits around the online world are better. So as more and more product goes into the online world, better for the networks, better for Blue Label. So the economics are better overall. So I think that answers the first question. How much of it goes through Capitec we can't disclose as we don't for any of our customers the exact percentage. Capitec, as you know it, is a great distribution, great partner. They continue to grow. We have most of our products in Capitec, and the partnership has really grown from strength to strength, and I'm sure it will grow into the future, but we do all the banks, by the way. Capitec is one of them. We have an SKU in every bank in the country. From one SKU to all the SKUs they do. So I think that's important. I think your next question is one that's been asked to us for 15 years, and that is why don't banks, retailers, why doesn't everyone go directly? And it's very simple, and I think it's going to become more and more. Customers, merchants want a neutral aggregator. They don't want to have 5 links into 5 different networks, 272 links into municipalities, 315 to bus companies and so on and so forth. It's much easier to come through a neutral aggregator like Blue Label who has the balance sheet to sustain whatever growth, whatever stock, whatever it is that you require. The service is excellent. And of course, our technology is excellent and is up there with whatever you would require as a bank or a retailer. And at the end of the day, we keep our piece. It's like a switch fee. And when you work out that to pay us our switch fee or to go do it all yourself, it will cost you more and more and more. Secondly, you don't have to worry about the inventory. If you sell 1 of it or if you sell 1 million of it, we do all the thinking. And because we're the aggregator across the whole entire market and across all the products, it will always make sense for a neutral aggregator. And we think not only has our model and vision of a neutral aggregator been spot on, but we think it's becoming more and more prevalent. And we think more and more retailers and more and more banks will go through a neutral aggregator. Think of us as the toll gate. Every time you go, you pay our little switch, you, as the bank, keep 95% of the margin. We keep in our switch fee. And I think when you weigh it up for what we do, what we deliver, what we offer and what we charge, it makes 100% sense across the board. The next question is from Ed Peinaar. How are you, Ed? I haven't seen you for a while. A quick one or so point on Cell -- just some color on -- points on Cell C. When you say done within this year, is that May 2022 in the next 3 months? Ed, we mean the next 3 months. By December of this year is really our goal. And hopefully, we can update you as we go along. It's definitely not May of next year. Is Cell C's operating performance going to be disclosed soon? Any sense that the loan recapitalization is causing operational strain? So first of all, what we mentioned is -- Zaf? Sorry.

Yes. Brett. I'm on. Yes.

Sorry. You heard the question. Sorry, guys, Zaf Mahomed, the CFO, is on the call. Zaf, would you like to answer the question really on how the trading has been? And when do you expect to disclose your results?

So we're going to disclose the results end of September, beginning of October. And as per the last set of results, we'll do ours to the end of June, which is our 6 months because we have a different year-end to you. So the results that are included with Blue Label is the 12 months to May. We will be releasing our first half to June results end of September, beginning of October. So to answer Ed's questions, no, operationally, we're doing very well. While Blue Label and Brett, in particular, has been working on the recapitalization, we've been focusing on liquidity, our network strategy and the operational rationalization in our business. And I think we've really been focused on what we did in the last 6 months of last year, which we reported on, which was to really focus on our customer base. So in the 12 months to May, you would have noticed that we dropped our customers by ZAR 4.1 million. That's only a ZAR 346 million drop in our service revenue. So on a 26% drop in customers, we only had a 2% drop in our service revenue. To put it another way, if you were to offer us ZAR 346 million in revenue and 4 million customers, would we take it? We'd say no. So it was always part of our strategy to go back to our core business, which is focusing on our prepaid customers, making sure that we add value to those customers. And that's why you see in our results that our EBITDA improved by just over 10%. Obviously, one of them was getting rid of unprofitable customers and all of the costs that go with it. i.e., acquisition costs, costs of distribution in particular. So we've taken all of those costs out. And then at an operating level, we've continued with our -- taking out nonessential operating costs and taking the fat out of the business. We completed a Section 189 on our senior management and reduced 30% of our headcount in that space. We are now in the process of shutting down 120 nonprofitable stores. We're looking at a different way of dealing with our customers. You see the banks doing something similar. And so that Section 189 will take 1,000 people of our headcount and a further 500 and 120 stores. So post the Section 189 process, we expect to have about 1,000 employees on a turnover of between ZAR 12 billion and ZAR 14 billion. So that's been the plan. As I said, we've been focusing on operations while Blue Label has been focusing on the recapitalization. We're confident that they will deliver on that. We have a liquidity road map to get us there. So, Ed, to answer your question, operationally, we're doing really well. We're generating positive cash. And I think that's what I can say. Brett, over to you.

Thank you, Zaf. Back to the questions from Myuran again, continuing with [ Amit's ] question. Bulk buying, on average, how many months do you take to trade out of the bulk board inventory? Myuran, every deal is different. We can buy bulk -- we can do a 1-month bulk buy. That's for the month we can go up to 6 months. So it's really mathematical. Every bulk buy that we do is profitable. There is nothing that's not profitable. And it's really the quantum of what we do a month, divided into what cash we might have available to what discount we can get, to what it will cost us. And if we had enough cash and it made sense, we would go up to 12 months. So we looked at anything in the past between 1 month and 12 months, but I would say, on average, you're looking at probably around about 3 months. The next question is from Ziyad Joosub. If possible, could you provide color on why the MTN roaming agreement will take 3 years for full transition for Cell C? Is there a road map or essential steps that need to occur for full rand transition to MTN? Over to you again, Zaf.

So you have to understand that we've got 6,000 towers, and those 6,000 towers are -- there is a finance lease expense line in our income statement. Obviously, they have different termination periods. So we agreed a 3-year transition plan to transition our radio access network across to MTN. So everything else remains the same. It's just our towers that are going to move across. We will cancel leases and over time decommission our equipment on the towers and start roaming on MTN's radio access network. That cannot be done on a simple switchover, as you can well imagine. We also don't want to end up having to do a roaming cost as well as having to spend money on finance leases. So that's why we agreed a transition phase with MTN. That process commences on the 1st of January next year. So we've gone live on Phase 2 from the beginning of May of this year. So we get all the benefits of Phase 2 and the transition we've agreed to start on the 1st of January, so that it coincides with our post recapitalization. And MTN has been very accommodating. And if you think that the results now that we've produced to the end of May are good, we expect the results to improve because we get what is effectively a CapEx for OpEx substitution in our income statement. In particular, you will see that the roaming cost will start to increase, but the operating costs come down and the finance leases come down and our CapEx goes up. So net-net, we are cash positive as a result of Phase 2 but the full benefits will only be felt when we are completely transitioned to the MTN radio access network.

Thank you, Zaf. Next question is from [ Philip Short ]. What is the latest carrying value for the Mexican business? Over to you, Dean.

[ Philip ], the carrying value would be ZAR 138 million as of the 31st of May.

Thank you, Dean. Next question is from [ Nick Dreyfus ]. Do Blue Label use EVA to guide asset allocation decisions? I can't see how Blue can add value invested in the CEC book. Given the high cost of equity allocation, capital in the book will destroy value. What strategies have Blue considered to reduce the cost of equity? The CEC book makes Blue capital intensive, which will hurt the P/E ratio. It is obvious to me that an asset-light business model will translate into a higher P/E. What is the cost of the renegotiated debt? So I think, [ Nick ], it's obviously a broad question. I think it deserves explanation to you and, obviously, happy to take it off-line with you. I don't think that you will see that it is anything of what you're saying. It is a business model that works not only in the cost of capital, but in the product that we are selling. So we work on both ends of the stick, but I think it's just important to delve into it in great detail with you off-line. It's a big question that deserves a big answer and happy to do with it and happy to deal with it off-line with you. Moving on to the next question, which is Brad Virbitsky. Would you talk more about the outlook for the SIM card distribution business? Is the decline here specific to COVID or are there any other drivers? Brad, the decline was 100% because of COVID. In the month of April, there was literally zero distribution. In the month of May, there was very little distribution. And as I said to you from June onwards, we have seen our SIM pack numbers revert back to pre COVID. I have no doubt that when you see the networks numbers, it will indicate exactly what I'm saying to you, which is the downturn would have been the months of COVID and that post COVID or the levels, at least, the SIM pack is back. I think our vision in SIM cards -- and that's a great question, and I'm not quite sure anyone has that exact answer now. I'll give you ours from a broad basis. We believe the way you see it today, which is in the pure SIM card distribution is probably around 2 to 5 years left in it. We will then be moving more and more to what you call a eSIM where it will be a very different way of connecting. It might be a neutral SIM, actually a hard SIM that is distributed on behalf of all the 4, 5 networks. So as time goes, we obviously engage in what's going on in the world heavily. We engage with the networks locally. But I think the short answer of your question is, as we all know it today, we've probably got around 2 to 5 years left of it, of which then it will adapt into a new model. Do we see our revenue side and our profit side decrease in the new model? Not at all. As in any product that we've ever done, as in any technology that we've ever done, we have to make sure that we're ready for what is next. We've got to make sure that we are capable to produce it, that we are capable to deliver it. So as time goes, I guess the market will be updated directly from the networks and, of course, from ourselves, and we'll watch the space, I guess, really carefully together. The last question is from [ Philip Short ]. Let me just check that there's no others. Yes. The last question is from [ Philip Short ]. Re Cell C, can you give us an idea of how much rent savings there are to be had as you do not renew tower deals with ATC, et cetera? [ Philip ]. I think any more questions on Cell C, let's -- and not through Blue Label, I think take it off-line directly. As we've said to you all in the past, Zaf and Douglas have offered their direct services, if I can use that word. Both Zaf and Doug will be on the road show. So for all of you that will be seeing you in the next couple of days, Doug and Zaf will be there so that you can ask them the questions directly. And any questions that you would like, our recommendation is please don't go through Blue Label, Nicola direct and directly to Cell C and deal directly with Douglas and Zaf and get the answers to the questions that you require. So just before I go, are there any more calls back on the line? Okay. I'm not sure our line is even there anymore. Okay. So just from us, Mark, myself and Dean, first of all, a big thank you to our Board and our Chairman. It's been a really interesting and tough 12, 18 months for us. Obviously, with the write-off of Cell C was not an easy time for us. We never got involved in the investment to write it off that I can tell you for sure. We always told you that our core is trading well. And I think once again, we have demonstrated that our core is strong and continues to be strong, and we believe it has lots of legs and lots of room to grow into the future, and really excited. On the Cell C side, we buckled down. The new management of Douglas and Zaf have been exceptional in our view. They've really gone back to basics in the word that Blue Label used. They've turned us into a positive Cell C for the first time probably in the history, cash generative for probably the first time in the history. Any fairness to them they can do as much as they can do under the circumstances. The big thing for them is the recap. And of course, as Blue Label, that's what we focused on tremendously. And as we mentioned to you, we really believe we are finally there, and we will recap it in the course of -- by the time this year is up, which is great news. Although longer than we told you, it will, I think, be welcome news to all of us. And hopefully, it will be behind us once and for all. And then the last thing I just want to touch on before I go is to the people of Blue Label because I think COVID has been an interesting time for all of us as people and as companies. But I just want to mention one thing and that is the productivity of Blue Label staff has been unbelievable, actually. And I would say that the productivity of Blue Label staff generally is very strong and very high. I don't know what the exact percentage is, but I would guess that our productivity is up by 20% or 30% since COVID, and well done to all the Blue Label staff. So look forward to seeing you all on our road show in the next couple of days and into the future. And from our side, wishing you all just safety and health, and thank you all.