Cell C makes strong JSE debut as shares rise 4% on first trading day

Cell C Holdings debuted on the Johannesburg Stock Exchange (JSE) on Thursday, marking a defining milestone in South Africa's telecommunications landscape and opening a new chapter in the company's turnaround journey.

The share price was seen trading 3.77% higher than the opening price, at R27.50 on Thursday midday, valuing the business at about R9 billion, with 340 million ordinary shares in issue.

The offer included 102 million sale shares, raising R2.7 billion for the selling shareholder, The Prepaid Company, which is a subsidiary of Blue Label Telecoms Group.

"This successful listing confirms our belief that a leaner, more agile operating model can compete effectively while keeping connectivity affordable for all South Africans. We've shown that purpose and profitability can coexist and win," said Cell C CEO, Jorge Mendes.

The offer also included a further allocation of 54.2 million shares to Sisonke Growth Partners as part of TPC and Cell C's commitment to empowerment. The total transaction value including the capital raise, and allocation to Sisonke Growth Partners was R4.1bn.

A statement from the group said, "This milestone reflects the successful delivery of Cell C's multi-year transformation strategy and reinforces the company's position as a sustainable, competitive, and purpose-driven force in South Africa's digital economy."

Over the past two years, Cell C has undergone a strategic reset centred on efficiency, customer value, digital inclusion and a financial turnaround.

"The company now operates on a lean, asset-light model that has restored financial health and strengthened competitiveness," the statement said.

For the year to May 31, 2024, pro-forma revenue came to R13.7bn, earnings before interest tax depreciation and amortisation was R3.7bn, net income after tax came to R3.5bn, while some R2bn in partner renegotiation savings had been unlocked.

Cell C today stands as a credible third force in a sector historically concentrated among two dominant operators, MTN and Vodacom.

Cell C's capex-light model leverages access to 28 000 radio sites serving 98.7% of South Africa's population, which enables customers to connect to the strongest available network, while freeing capital for innovation, service excellence, and competitive pricing.

"The separate listing allows Cell C to streamline its balance sheet, reinforce its growth strategy, and unlock long-term value. The business today is fundamentally stronger and more competitive than it was two years ago," said the chief financial officer El Kope.

The company serves customers through more than 7 900 retail partners, 100 branded stores, a fast growing wholesale business, and a diversifying enterprise portfolio with other revenue streams to accelerate growth.

"The JSE listing enhances transparency, strengthens governance structures, and opens avenues for value creation for new and existing shareholders. Cell C has guided to pay 30–50% of free cash flow to investors as dividends, with the first payout expected within the next 12-18 months," said Mendes.

"As we step into this new era, our focus is on delivering sustainable returns while being an ally to our customers, employees, partners, and investors," Mendes said.

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