Director’s Cut: Dylan Bradfield - Blue Label’s “electricity unicorn” and the next big SA breakout

Blue Label’s long-awaited reset is underway. In this Director’s Cut, Sharenet Wealth portfolio manager Dylan Bradfield unpacks Cell C’s first post-listing results, Telkom’s resurgence through Openserve, and the potentially game-changing move: Blue Label selling independent power to municipalities. With dividend potential, fintech growth and energy optionality all in play, Bradfield explains why Blue Label remains his top pick..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.BizNews Reporter.When Dylan Bradfield speaks about Blue Label, he does not sound like someone chasing a quick trade. He sounds like someone who has been waiting patiently.Bradfield, portfolio manager at Sharenet Wealth, was early on Blue Label when sentiment was poor and the Cell C separation still uncertain. Now Cell C has listed, Telkom has delivered a strong trading update, and Blue Label has quietly secured the ability to sell independent power producer electricity to nearly 100 municipalities. For Bradfield, that energy move could be the real kicker.“It’s the unicorn,” he says. “It’s the unknown.”Blue Label’s electricity strategy has been three to four years in the making. The company has worked municipality by municipality, building the infrastructure to distribute prepaid electricity properly and clean up leakages in the system. Thousands of workers have been deployed to deal with illegal connections and fix metering issues. Now the bigger prize comes into view: distributing IPP power directly into those municipal systems.For a country long stuck in an Eskom monopoly, that route to market matters.“We’ve been waiting for independents to break through,” Bradfield explains. “This gives them a way in.”Early estimates suggest the electricity division could generate revenue of R300 million to R400 million a month, with strong margins. That is before it scales. Bradfield is careful not to overpromise. Timelines remain uncertain. Rollout could take months or longer. But strategically, he sees it as transformative, both for Blue Label and for South Africa’s broader economy.This comes as Cell C, now separately listed, delivered its first set of results. Bradfield describes them as complicated but broadly in line with expectations. IPOs often front-load costs. There were once-off adjustments, inter-company clean-ups and accounting noise that inflated EBITDA figures. Strip those out, he says, and the underlying business is tracking as expected.Prepaid contracts with major retailers are coming through. The MVNO segment continues to grow at more than 20 percent. That growth, in his view, remains underappreciated by the market.But it is Telkom that has surprised many investors. Once regarded as the sluggish incumbent, Telkom’s Openserve fibre business is now more than half of group revenue. Data growth is steady. Margins are holding. EBITDA is solid.Bradfield believes Openserve alone could be worth more than half of Telkom’s current market capitalisation. Transactions in the fibre space suggest meaningful valuation upside. A full sale seems unlikely given regulatory and competition constraints. A strategic stake, perhaps 30 or 40 percent to a competitor, feels more plausible.That optionality is real. But it is Blue Label that remains his preferred long-term play.Why?Balance sheet repair is a big part of it. The separation from Cell C allows Blue Label to get back to basics. Historically, its treasury function delivered strong earnings uplift by buying airtime and data in bulk at discounts and recycling capital efficiently. That engine stalled while capital was tied up in Cell C support. Now that cash can be redeployed.“When a fintech business starts growing,” Bradfield says, “it can grow 20, 30, even 40 percent a year.”Blue Label sits at the intersection of fintech, telecom distribution and now energy. The market, in his view, is discounting too much of that optionality.There is also the dividend angle. Both Cell C and Blue Label could become meaningful dividend payers within the next 12 to 16 months. Debt levels have fallen sharply. Net debt is modest relative to peers. Capital allocation discipline is front of mind.Of course, risks remain. The Cell C history is fresh. Investors remember insolvency fears. The recent listing did not command the premium some expected. Markets want proof before rerating.Bradfield accepts that. He expects earnings to provide clarity. Once the separation effects wash through and investors see clean numbers, he believes the risk-reward profile becomes compelling.Telkom offers shorter-term optionality. Cell C may surprise if operational momentum continues. But if forced to choose one stock for a business portfolio today, Bradfield does not hesitate.“Still Blue Label,” he says.It is a call grounded less in hype than in structure. A repaired balance sheet. A core treasury engine restarting. A growing MVNO platform. And an electricity strategy that could open an entirely new revenue stream at scale.South African markets are not short of noise. Load shedding headlines may have faded but economic pressure persists. Investors are cautious. Capital is selective.In that environment, companies with multiple levers matter. Blue Label, in Bradfield’s assessment, now has several.Energy is the headline. Fintech is the engine. Telecom distribution remains the base.The unicorn may still be unknown. But it is no longer invisible.

Director’s Cut: Dylan Bradfield - Blue Label’s “electricity unicorn” and the next big SA breakout

Related Stories