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Cell C’s majority owner, Blu Label, plans to list Cell C on the JSE and has entered into a binding implementation agreement relating to the restructuring of Cell C’s pre-listing.
Following a period of troubled ownership, Blu Label said that the listing will help show the strengths of both entities, with investors now able to own a direct stake in Cell C.
Blu Label added that the restructuring will ensure the Cell C management team has the appropriate incentive structure per the listing preparation.
It believes the Cell C listing will enhance its value and restore its shareholder value.
Cell C’s independent access to capital markets may support further growth and finance acquisitions or investments.
The group is also undergoing a massive change and has adopted a capital-light structure, which runs off MTN’s network.
Cell C is then a service provider for several other major MVNOs, including Capitec Connect, which now has over 1 million users.
The net asset value of Cell C is R8.3 billion as of 31 May 2025, with its operating profits attributable to Cell C standing at R1.6 billion.
Even so, the group’s latest financials showed it was technically insolvent, with negative equity of R1 billion.
However, with a potential listing on the cards, Cell C has summarised its financial outlook. It also provided a new capital structure that is aligned to support its business model:
Table of contents [Show]
Net revenue growth
The first part of the update included the group’s plan to increase net revenue growth.
This includes increased subscriber growth across its mobile business.
The group is also loooking for an improved average revenue per user (ARPU), driven by a high-avlue customer model across its prepaid and postpaid customers.
It is also looking for growth in wholesale revenue through MVNO customers and enterprise opportunities.
- Near-term = Low to mid single digits
- Medium-Term = Mid single digits
EBITDA margin
Regarding its earnings before interest, taxation, depreciation and amortisation, the group is looking for growth in its margin accretive revenue segments.
It is looking for growth in margin accretive revenue segments, while its costs should grow in line with market and business needs to support growth.
It is also looking for operational cost control measures to deliver further efficiencies.
- Near-term = Low twenties
- Medium-Term = Mid twenties
EBIT Margin
Regarding the group’s earnings before interest and taxation margin, the group focuses on reducing its depreciation as a % of revenue over time.
- Near-term: Around mid-teens
- Medium-term: Mid- to high-teens
Capital intensity ratio
Regarding the Capital intensity ratio, the group will continue its focus on a capex-light operating model.
Going forward, the group will also be customer-facing and focused on the customer experience.
Capital intensity ratio • Continued focus on a capex-light operating model • Capex going forward to be customer-facing and focused on the customer experience.
- Near-term = Mid single digits as a % of revenue
- Medium-term = Low to mid single digits as a % of revenue
Capital structure
Finally, the group is working on a market-appropriate dividend policy, which looks to pay around 30 to 50% of its free cash flow.
The group has also acknowledged an ongoing commitment to sustainable leverage.
- Near-term = Dividend payout of 30 – 50% of free cash flow
- Medium-term = <1.0x net debt to EBITDA
Despite the restructuring of Cell C, no official announcement has been made over Cell C’s listing on the JSE.
Issued on BusinessTech by Luke Fraser | https://businesstech.co.za/news/telecommunications/839135/cell-cs-big-plans-for-south-africa/
