Finweek English Edition - - INVESTMENT -

SELL SBG Se­cu­ri­ties re­cently re­leased a new re­port on the JSE-listed tech­nol­ogy group, of­fer­ing a 12-month price tar­get of R7.70/share. This fol­lows the re­lease of full-year f inan­cial re­sults for 2013. SBG told clients: “We ex­pect Blue Label to re­duce the rate of pre­paid sub­scriber base ac­qui­si­tions, low­er­ing our in­vest­ment pro­file slightly and off­set­ting neg­a­tive short-term EPS ad­just­ments. Our un­changed tar­get price im­plies a rolling 12-month exit P/E mul­ti­ple of 10.8 times, slightly be­low its his­tor­i­cal mean price-toear­ings (P/E) mul­ti­ple of 11.5 times. We re­main cau­tious re­gard­ing ex­pec­ta­tions re­lated to cash dis­tri­bu­tions be­yond the or­di­nary div­i­dend, given we be­lieve the group will most likely con­tinue to seek growth in SA (via op­por­tunis­tic sub­scriber base ac­qui­si­tions), utilise cash to se­cure air­time in­ven­tory dis­counts and make fur­ther in­vest­ments in Mex­ico and In­dia.”

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