Good afternoon, everyone. Thank you for joining us at the presentation of our audited financial results for the year ended May 31st, 2023. There can be no doubt that 2023 has been one of the most difficult and challenging periods, not only for us as a group, but also for our consumers, our business partners, our suppliers, and the communities within which we operate. This period was marked by escalated market volatility, increased inflation, growing interest rates, and higher levels of load shedding. All of these factors resulted in contracted consumer confidence and spending. While all these macroeconomic conditions impacted directly and indirectly on our business and strategy, our group successfully navigated a very complex and challenging operating environment by increasing our gross revenue generated by 6%, from ZAR 72.3 billion- ZAR 76.9 billion. This impacted positively on an increase in group gross profit by 19%.
Operationally, we also noted a 17.6% growth in the number of transactions we have done across the group during this year. While we continue to invest in our trader base and ensure that we partner with the most profitable, we have seen an 8% increase in our trader base. Load shedding. During the financial year, June 1, 2022- May 31st, 2023, we had a total of 305 days of load shedding. During this period, there were six months with some form of load shedding every day, with electricity availability being confined to between 50%- 55% of full capacity. As a result, we had around 32 days of total load shedding during this period, more than a month where electricity was not needed or consumed. This ultimately impacted on our revenue across our products, as some network operators are impacted.
This also means that our products could not be available during the time, as some merchants could not connect their devices and distribute our product. Our strategy. The essential nature of our products and services, the strength of our distribution network, our powerful brands, the continuous investment in our platforms, our continued focus on customer centricity, and the creativity, innovativeness, and capability of our team remain the most important ingredient to our success and our resilience. Focusing on the above, we continue to experience strong growth in our own proprietary offerings, particularly Blu Voucher that has seen some 300% growth over the last year, and Ringers that has reached half a million daily consumers.
We also had to reexamine our distribution model and have started a process of right-sizing to ensure that our products and services are not only available to those who need it, but also accessible at a reduced financial and effortless cost. In some cases, we have redesigned the logos of some of our customer-facing brands to bring it in line with current market trends and make it more recognizable as we compete, in some cases, against international brands. We have also reworked the business model to present our clients with a more comprehensive and compelling product and service offering. We are determined to meet our obligations to our consumers by investing in the reliability of our products, trust in our name, and as a result, we will obtain greater brand recognition and reassert our social license.
We are building and expanding our platforms to ensure that we are able to aggregate data across platforms and offerings to ensure that we build a FinTech ecosystem second to none in the country, while we also focus on the immediate needs of our customers and provide them with what they need and when they need it. We believe that our strength lies in the amazing team we have built over the years, a team with complementary skills committed to a common purpose. While we continue to recruit and attract the skills required as we evolve and change, we will also ensure that we reward excellence and invest upskilling to ensure versatility and adaptability. Let us now turn to our main revenue generators and those subsidiaries and business units that are strategically important to the group. Blue Label Distribution.
When considering Blue Label Distribution performance, you would note that its cost optimization program has achieved significant value, delivering close to ZAR 20 million in efficiencies. The revenue assurance program has also generated equally remarkable results, delivering an incremental ZAR 23 million in gross profit through different initiatives, with BLD Formal exceeding its revenue targets, bolstered primarily by the performance of formal retail, petroleum, convenience, and retail independent segments. Before we look at our channel and product performance, it is important that I draw your attention to the continued shift from pinned to pinless data and airtime. This means that end consumers no longer have to leave the comfort of their homes or offices in order to buy our products, as they can now transact conveniently through predominantly banking apps and ATMs.
As a consequence, you would note that all our other segments are under pressure, while growth is recorded in retail independence and aggregator segments, but strongest growth was experienced in the financial institution segment. We do foresee that this trajectory will continue for the next few years. The Formal Retail Independent segment performed well following a cleanup exercise across the regions, shifting the merchants mix to higher value, more profitable merchants, and focusing service models accordingly. This, in turn, improved working capital generation. As cautioned earlier, all products have seen solid growth except for pinned airtime and data. The steady growth experience in gaming gives reason for optimism, and we're noting the strong growth on this product category and the steep declines in pinned airtime and data. We expect it to overtake pinned airtime and data within the next few years in volume sales and in revenue.
Our ability to innovate, remain ahead of the game, and to bring new and exciting products to the market is best viewed through the performance of Ringers and Blu Voucher, two products that we have developed in-house and have made available to the market throughout our entire distribution network. There is no doubt that load shedding has a continuous negative impact on our operations, and we estimate that around ZAR 30 million in gross profit was lost as a result of the worsening stages of load shedding during the financial year. The rand/ U.S. dollar exchange rates had a negative impact on our international money transfer volumes, but they will continue to broaden the number of offerings in the space to give the market a safe, convenient, and affordable alternative to submit money offshore. CEC.
CEC's strategy is become the service provider of choice through the provision of innovative and value-adding solutions to their customers. This will be achieved through the acquisition and retention targets, strong growth in the post-paid base, and delivering an industry-leading customer service. Due to the successful execution of its strategy, CEC has also recorded strong growth at gross profit and NPAT levels over the past four years. Moreover, during the period under review, CEC introduced new Elevate contract plans that are simplified and more competitive, and they also introduced a 36-month contract that enables customers to affordably upgrade their handsets. Addressing their supply chain efficiencies, they have improved stock holding, new outbound logistic partners, and improved their inventory management model, while at the same time retaining strong focus on OEM relationships to improve their product offering.
Turning to their performance when measured against acquisitions and renewals, you will note that their subscriber acquisitions have consistently outperformed their target of 18,000 new subscribers each month, and they have now adjusted this target to 21,000 new subscribers each month. While renewals remain stable, when viewed in conjunction with churn, you will observe that the contracts are renewed. The contract base invariably continued to be active on a month-to-month basis. On to Cell C. While the operating business was challenged during this reporting period, the business showed resilience and countered struggling revenue via closely monitoring costs. Although significant milestones have been reached, liquidity constraints have resulted in subdued investment in key operational initiatives that were planned for this financial year. Revenue declined due to a challenging operating landscape, mainly affecting the prepaid business, leading to a decline in subscriber base.
Operational challenges that had severe impact on the company's revenue included the unavailability of SIM cards, network outages as a result of load shedding, and stagnant customer acquisition. Operating expenses, however, declined by 20% year-on-year, in line with a tight cost management approach. The competitive landscape continued to drive data prices down. This, coupled with the increased data usage, resulted in a lower ARPU versus the 2022 financial period. However, ARPU was high comparative to the industry, despite a reduced base indicating high spend per customer. The business mix has also shifted within the financial period, with the reduction of voice usage in line with global norms. With the aim of driving focus and growth, Cell C has identified five distinct big bets. Namely, the strengthening of its internal and external engagements to rebuild confidence with all their stakeholders and within the telecommunication industry.
Building customer confidence by addressing the network and customer perceptions thereof. Returning to growth by promoting its compelling customer value proposition off the back of improved network and customer acquisition. Addressing cash flow and liquidity constraints, and by consolidating the brand position in the market. I will now hand you over to Mark. Our Joint Chief Executive Officer will continue with the focus key subsidiaries. Thank you.
Good afternoon, everyone. It is always a great pleasure to update the market with key developments within our group, to share some achievements, and to provide an overview of our performance. Moving on to Cigicell. As Brett has already explained during his introduction, load shedding had a major impact on particularly the performance and revenue generation of Cigicell. Load shedding, as a matter of course, contributed to a slight reduction in Cigicell's revenue. While the company had consistently delivered compound revenue growth averaging 17% from 2018 until 2022, electricity face value sales grew by only 3% this year due to lower consumption as a result of the low electricity availability factor, while net commissions earned declined by 16%. At this point, it is important to note that Cigicell gets paid commission on kilowatts used and not on revenue, hence this decline.
Looking at the face value sales, we roughly estimate that load shedding had a negative impact on municipalities of around ZAR 2 billion. Price competition and reduction in usage drew margins down, and instability in some municipalities led to indecision. All of these factors had a negative impact on the earnings of Cigicell. On the positive side, however, they managed to deliver on our SLAs, including some of our revenue assurance projects, and learned valuable lessons on how the latter can be quantified with manageable deliverables. The deployment of state-of-the-art technology for indigent management and vetting and credit control have also shown a significant hike, as well as increases in collection.
As you would know, there are an estimated 10 million STS approved prepaid electricity meters throughout South Africa that need to be updated in the form of two 20-digit codes, which must be entered into the meter to reset the base date. Eskom is responsible for more than six million of these meters, while municipalities and metros are responsible for updating of around four million of these. These updates need to be completed by November 24th, 2024. C2HL has over the last few years acquired the necessary capacity and capability to ensure that Eskom and the responsible local authorities reach this deadline, because if we do not achieve 80% by then, it would have dire impacts on the income generation abilities of local municipalities, as meters will not be able to recharge unless they are updated.
C2HL, on the other hand, because of its leadership role in revenue assurance, can assist when contracted to do so, as this process is most critical for its business and customers to ensure electricity continuity. Turning our attention to BluNova, our data consolidation, insight, and decisioning arm. BluNova continues to focus primarily on key projects for Cell C and CEC and continues to focus on external monetization initiatives. In doing so, they have established BluAdvance that has migrated to an internally developed platform for advances and AltBureau, the data distributor within the group, as well as external third parties. During previous presentations, we made mention about BluAdvance and how it would revolutionize the buy now, pay later market. We have developed this cloud-based software application that manages consumer risk on microfinancial transactions. Its USP is simple and compelling. It de-risked and faster startups with an Inana score.
It has pre-existing integrations across BLT products and has access to BLT's distribution footprint for advance recovery. While we only launched a service offering a few months ago, we can already see the uptake. With the potential of reaching more than 7.5 million people with electricity advances when they need it most, BluAdvance has, in this POC, provided a consumer base with over ZAR 10 million in electricity advances and processed more than 600,000 transactions that include both advances and repayments. Access to the service is through an easy-to-use USSD and web channels with automatic repayment done through existing BLD channels. AltBureau, on the other hand, is a bureau and distributor of one of the largest sets of alternative data in South Africa.
It connects data subscribers to a wide range of unconventional data sources by collecting, processing, and analyzing alternative data publishers in a compliant way across risk assessment, contractability, and digital lifestyle categories and solutions. Secondly, using data science and data engineering, it publishes data features and predictive data models in stores that may be consumed through live API batch services and web self-service portals using modern cloud technologies to help clients understand market trends, consumer behavior, and competitive dynamics. Lastly, it enables financial inclusion by providing first-time credit access to those who historically did not qualify for credit. Moving on to Transaction Junction. There is no doubt that electronic payments are a booming industry in South Africa as well as the continent.
It is estimated that Africa's e-payments industry across domestic and cross-border payments is generating more than $25 billion in revenue annually, of which more than $15 billion was domestic electronic payments. This was generated from around 50 billion individual transactions, totaling more than $850 billion of transactional values. By growing its merchant base over the last five years at an annual average of 32%, Transaction Junction is certainly an African leader, expanding its market share aggressively. When considering the 27.5% average annual growth in the rand value of all transactions and the 500% surge in e-commerce revenue contribution, it is indeed clear that Transaction Junction is becoming more important in our world.
These achievements are possible because while their products and services are uniquely designed for the conditions and consumer needs on our continent, the continued expansion of their distribution network also represents a substantial opportunity to capitalize on an ever-growing catalog of digital products and third-party services. This not only strengthens the cross-selling opportunities within its existing merchant base but also extends them to potential future clients. In an effort to diversify its product and solution offerings across various geographical territories, Transaction Junction has made significant investment in enhancing its technology infrastructure. These improvements relate to technological choices, strategy, and infrastructure and seek to align them with current and future trends. Moving on to Ticketpro. Over the last three years, as a direct result of COVID-19 and its lockdown restrictions, Ticketpro has transformed itself into more than just a ticketing company.
Understanding that an event is an experience to be remembered, and with the fan at the center of what they do, Ticketpro relooked its service and product offerings to cater for each and every need of the fan. With this one-stop approach, the fan is now able to book a bus or a flight to an event, book his ticket to the event, and book his accommodation and/or car rental if the event is in a different place. Also, this fan can buy air time and data as well as electricity through one of the many solutions Ticketpro has on offer. To the event planner, Ticketpro is now able to sell their tickets, assist with marketing across the Blu Label platforms, help with access control, and enable them to book accommodation, travel, and cars for artists, sports stars, and performers.
There are now nine different brands under Ticketpro, each and every one catering to a different demand. Some of the major improvements of their offering include the introduction of Ticketpro Travel, which was launched during the past year. Ticketpro Travel affords South African access to the cheapest flights, accommodation, and car rental, and the agents can compile packages for both local and international travel with a focus on hotels and B&Bs closest to the venue where the events or match will take place. Ticketpro Travel is the first OTA that is able to integrate cryptocurrency as a payment solution and its improved content engine, its ability to deliver richer content through direct integrations, it is able to provide far cheaper rates to their customers.
Ticketpro Travel Solutions, the B2B side, is able to, through its partnership with Spotnana, automate travel bookings and deliver it seamlessly to a single platform that is integrated into more than 165 different APIs. Ticketpro Travel Solutions have also successfully completed the global inventory integration, as well as the integration with major international airlines, and is currently integrating into Travelstart content layer. This would give greater access to low cost and direct pricing options that would further enhance the solution. Looking at Ticketpro Bus, we can announce that the smart tap and auto fare collection solution was successfully launched on all Putco buses on the Soweto route. This includes around 600 buses, more than 40,000 unique passenger taps on the solution in a day. It is anticipated that other routes will be launched during the next few months.
It has also completed integration and certification on the National Department of Transport, SANRAL ABT solution, and will be launching top-ups for passenger cards for Yarona in Rustenburg and Leeto La Polokwane in Polokwane. Ticketpro Bus have also added four new carriers to their long-distance bus portfolio, taking the total to 12. Moving on to IT. During the previous financial year, and as presented during our interim results, the group embarked on a holistic digital business transformation journey that involved using digital thinking to fuel waves of business innovation to promote one or more of four key business outcomes. Unlocking opportunities for profitability and, where possible, exponential growth. Realizing greater efficiencies and optimization. Building our brand equity and market reputation, and increasing shareholder value and returns.
We developed our group digital business transformation strategy, which set out our broader vision for a digitally transformed business, together with a blueprint and roadmap to guide us through the transition. Operationalizing this strategy will see us transform our products to amplify customer and business value while modernizing our technology platform and empowering our people to enable this value creation. Throw in a global pandemic that has catalyzed the shift towards digital midnight, we now found that the business within Blu Label Telecoms needs to urgently answer one or more of three key questions. How do we accelerate our shift towards becoming a business that is holistically digital by default? How do we amplify our current digital business transformation efforts to realize greater, more tangible customer business and citizen value that really moves the needle?
How do we use digital thinking to activate the new customers, new products and services, new markets, new paths to markets, new businesses, and new ecosystems? This group's digital business transformation strategy has been designed to provide leadership and management teams across the group with a directional framework and playbook to enable them to answer these key questions. The first wave of our digital business innovation activities produced many innovative and exciting ideas for creating new customer and business values across the group. This has enabled us to create a solid innovation pipeline with the first batch of prioritized concepts currently undergoing market testing and validation. On our outlook, this presentation explains how our products, platforms, people, partnerships, and performance have allowed us to deliver on our strategy, and in turn producing positive results.
Bringing them all together, ensuring that they work in a synchronized fashion and are complementary to one another in a strategic imperative. Things are, however, getting better. Our economy is showing signs of recovery, and on load shedding, we are pleased to note that the energy availability factor has improved to 58% during the last few weeks, and the National Energy Crisis Committee has completed or made good progress on about 60% of the actions that were set out in their energy activation plan. Harnessing the changing and improving economic conditions and ensuring that we continue to exploit the many opportunities of growth, success, and innovation will remain our focus and intent on doing this in the following ways. Our entrepreneurial spirit and ingenuity are found in our ability to bring innovative products and services that would complement our array of essential services to the mass market.
We will, as a result, continue to look at areas of growth by developing margin-accretive products that are both needed and essential in nature. In support of the above, we will continue to grow our distribution network with the sole aim of bringing our products and services closer to where they are needed, and of partnering with those who would enable us to do so at a much more affordable rate. Aligned to the above, we continue to expand our partnership model to ensure that all merchants, intermediaries, and points of sale are able to reap the full benefit of our offerings across the group. Because our ecosystem rests upon the delivery of world-class platforms, we will continue to invest in the integrity of our competitiveness of our platforms by focusing on security features, reliability factors, and dependence.
If we focus on the above, we will retain our competitive edge and market leadership roles that are anchored in our customer centricity, while at the same time, we will make sure that our team is capable and able to respond to the changing societal and economic demands. Thank you. I will now hand you over to Dean Suntup, our Chief Financial Officer, who will take you through our financial results.
Good afternoon, ladies and gentlemen. The highlights for the year ended May 31st, 2023 were as follows. Revenue of ZAR 18.9 billion. On inclusion of the gross amount generated on pinless top-ups, prepaid electricity, ticketing, and gaming, the effective increase equated to 6%, from ZAR 72.3 billion- ZAR 76.8 billion. Gross profit increased by 19% to ZAR 3.48 billion. Increase in gross profit margin from 16.46%- 18.41%. Successful conclusion of Cell C recapitalization transaction in September 2022. Core headline earnings for the period was ZAR 0.4555 per share. Excluding the extraneous contribution of ZAR 523 million in the current year, primarily resulting from the recapitalization transaction of Cell C, and ZAR 214 million in the prior year, core headline earnings per share increased by 9% to ZAR 1.0483 per share, compared to ZAR 0.9656 per share in the prior year.
The core businesses of Blu Label Group has shown consistent growth in revenue, gross profit, and core headline earnings per share for the year ended May 31st, 2023. The predominant extraneous contributions to the May 2023 basic, headline, and core headline earnings per share are primarily associated with the recapitalization transaction of Cell C. Core headline earnings for the year ended May 31st, 2023 amounted to ZAR 402 million, equating to core headline earnings of ZAR 0.4555 per share. In the comparative year, core headline earnings amounted to ZAR 1.061 billion, equating to core headline earnings of ZAR 1.2101 per share. Excluding the extraneous contributions of ZAR 523 million in the current year and non-reoccurring income of ZAR 214 million in the prior year, core headline earnings increased by ZAR 78 million, 9%, from ZAR 847 million- ZAR 925 million.
Core headline earnings per share increased by 9%, from ZAR 0.9656 per share in the prior year to ZAR 1.0483 per share. The extraneous contributions to group earnings in the current year were primarily attributable to the accounting treatment relating to the recapitalization transaction of Cell C emanating from expected credit losses and fair value movements of ZAR 88 million. Loss on modification of financial instruments of ZAR 57 million, primarily due to the renegotiation and reclassification of the CEC deferral amount of ZAR 1.1 billion owed by Cell C from trade and other receivables to loans to associates and joint ventures. Finance costs of ZAR 322 million, resulting from increased borrowings relating to the airtime sale and repurchase obligations, as well as the issue of Class A preference shares. Finance income of ZAR 238 million, resulting from a loan to Cell C for its debt funding requirements.
There was a partial reversal of ZAR 962.5 million relating to the initial impairment of ZAR 2.5 billion of Blu Label's investment in Cell C as at the May 31st, 2019, in line with the improvement in its equity valuation. The recognition of the group's share of Cell C's net accumulated losses for the period from June 1, 2019- May 31st, 2023, limited to ZAR 1.329 billion, being the aggregate of the partial reversal of the initial impairment of ZAR 962.5 million of Blu Label's investment in Cell C, as well as an additional investment therein amounting to ZAR 366 million, and the accounting implications of the termination of the Air Advantage put option obligation for the acquisition of up to 40% of the shares therein, resulting in a fair value gain of ZAR 22 million.
Group revenue increased by ZAR 1.1 billion, 6%, to ZAR 18.9 billion. However, as only the gross profit earned on printless top-ups, prepaid electricity, ticketing, and gaming is recognized as revenue, on inputting the gross revenue generated from these sources, the effect of gross in revenue equated to ZAR 4.5 billion, 6%, resulting in total revenue of ZAR 76.8 billion compared to the prior year of ZAR 72.3 billion. Gross profit increased by ZAR 552 million, 19%, from ZAR 2.931 billion- ZAR 3.483 billion, corresponding to an increase in margins from 16.46%- 18.41%. This increase in margins can partially be attributable to the growth in printless top-ups, prepaid electricity, ticketing, and gaming, where only the gross profit earned thereon is recognized as revenue. Furthermore, load shedding has been a significant challenge faced by our organization in recent times, which is entirely out of management's control.
It has negatively impacted on the sale of prepaid electricity, prepaid airtime, starter packs, and our call center operations, all of which are significant revenue streams for the group. The frequent power outages imposed by external factors have adversely affected our operational efficiencies, resulting in disruptions, delays, and additional costs. While the management team has worked diligently to mitigate the effects of load shedding, it has disrupted the availability and accessibility of these essential services to our customers and has negatively affected our overall financial performance. The demand for these product offerings have experienced a decline, resulting in a significant reduction in revenue. The unpredictability and intermittent nature of load shedding have made it challenging for customers to conveniently purchase these products, especially during the second half of the financial year when the country experienced Stage 4 and higher levels of load shedding.
EBITDA increased by ZAR 91 million, 7%, from ZAR 1.372 billion- ZAR 1.463 billion, excluding the extraneous contributions of ZAR 146 million in the current year and non-reoccurring income of ZAR 326 million in the prior year. Excluding the ZAR 145 million cost attributable to learnership initiatives in the current year and ZAR 65 million in the prior year, EBITDA increased by ZAR 171 million, 12%, from ZAR 1.437 billion- ZAR 1.608 billion. The benefits thereof is realized through income tax savings resulting from Section 12H allowances claimed for these learnerships.
Moving to the balance sheet. Total assets increased by ZAR 1.4 billion- ZAR 14.7 billion. Of which non-current assets accounted for ZAR 2.2 billion, offset by a decline in current assets of ZAR 811 million. Non-current assets included an increase in loans to associates and joint ventures totaling ZAR 1.9 billion, along with investments in associates and joint ventures, which increased by ZAR 7 million. Additionally, advances to customers increased by ZAR 263 million and deferred taxation asset by ZAR 82 million. Loans receivable increased by ZAR 16 million and capital expenditure net of depreciation by ZAR 29 million.
However, these increases were offset by a reduction of ZAR 12 million in rights-of-use assets, ZAR 9 million in financial assets at fair value through comprehensive income, ZAR 20 million in financial assets at fair value through profit and loss, as well as ZAR 47 million in intangible assets and goodwill. The increase of ZAR 1.9 billion in loans to associates and joint ventures primarily related to the recapitalization of Cell C and comprised the following. Debt funding of ZAR 1.03 billion that was required by Cell C to effect the compromise offer made by it to certain of its secured lenders. Of this amount, ZAR 915 million was accounted for as a loan to an associate and ZAR 118 million as an investment in Cell C.
The latter being congruent with the fair value of the additional 9.53% shareholding acquired as part of the recapitalization process. There was a loan of ZAR 111 million originating from TPC's participation in the reinvestment instrument acquired at nominal value, and the CEC deferral amount, whereby the existing claim of ZAR 1.1 billion owed by Cell C was renegotiated to be repaid by the latter in 60 equal monthly capital installments. This claim was reclassified from trade and other receivables to loan to associates and joint ventures at its initial fair value of ZAR 1.035 billion. Of this amount, ZAR 220 million is accounted for in current assets. The significant net reduction in current assets includes declines in trade and other receivables amounting to ZAR 1.7 billion, as well as a decrease of ZAR 1.4 billion in cash and cash equivalents.
These decreases were offset by an increase in inventory amounting to ZAR 1.7 billion, advances to customers by ZAR 327 million, loans to associates and joint ventures by ZAR 215 million, and financial assets at fair value through profit and loss by ZAR 47 million. The ZAR 1.7 billion decrease in trade and other receivable is predominantly related to a decline in CEC's trade receivable balances from Cell C. This reduction was attributable to the settlement of an obligation owed to CEC, reducing it to an amount of ZAR 1.1 billion, with this deferred amount being reclassified as loans to associates and joint ventures. Excluding the trade debtors relating to CEC, the debtors collection period increased to 40 days compared to 28 days reported for the year ended May 2022.
The increase in inventory of ZAR 1.7 billion was primarily attributable to the groups purchasing ZAR 1.2 billion of Cell C prepaid airtime as part of the recapitalization transaction. This purchase was necessitated in order to assist Cell C with its working capital requirements. Net profit attributable to equity holders amounted to ZAR 269 million, resulting in accumulated capital and reserves of ZAR 4.4 billion. Non-current liabilities grew by ZAR 1.5 billion, comprising an increase in borrowings of ZAR 1.37 billion relating to the airtime sale and repurchase obligation totaling ZAR 278 million. The issuance of Class A pref shares amounting to ZAR 172 million, and an increase in non-current portion of the group's working capital facilities of ZAR 918 million. Furthermore, financial liabilities through profit and loss increased by ZAR 62 million, deferred taxation liabilities by ZAR 19 million, and lease liabilities by ZAR 14 million.
The increase in financial liabilities held at fair value through profit and loss of ZAR 62 million related to the issuance of Class B preference shares to the lenders, and the recognition of the SPV5 derivative liability in line with the recapitalization transaction. Current liabilities decreased by ZAR 326 million, mainly due to the reduction in trade and other payables totaling ZAR 433 million, lease liabilities by ZAR 28 million, deferred revenue by ZAR 26 million, and financial liabilities at fair value through profit and loss by ZAR 22 million. However, this decrease was offset by an increase in borrowings of ZAR 136 million and an increase in current tax liabilities of ZAR 47 million. The reduction in trade and other payables of ZAR 433 million primarily related to a decrease in CEC's trade payable balances owed to Cell C.
This decrease occurred concurrently with a decline in trade receivables, which resulted from the settlement of the obligation by Cell C to CEC to an amount of ZAR 1.1 billion. Average credited terms were 114 days as compared to 124 days for the financial year ended May 31st, 2022. The net increase of ZAR 136 million in current borrowings is related to the current portion of the airtime sale and repurchase obligations totaling ZAR 710 million. This increase was offset by a decrease in the current portion of the group's working capital facilities amounting to ZAR 574 million.
This reduction resulted from extending the terms of these facilities, consequently classifying them as non-current borrowings. The decrease in current financial liabilities held at fair value through profit and loss related to a release of ZAR 22 million, due to the termination of their Air Advantage put option obligation. Moving on to the cash flow statement. Cash generated from trading operations amounted to ZAR 203 million. Working capital movements included an increase in inventory of ZAR 1.7 billion and advances to customers of ZAR 590 million.
These increases were offset by decreases in trade receivables of ZAR 656 million and trade payables of ZAR 38 million. After incurring net finance costs of ZAR 490 million and taxation of ZAR 215 million, net cash utilized in operating activities amounted to ZAR 502 million. The increase in inventory of ZAR 1.7 billion was attributable to the group purchasing ZAR 1.2 billion of Cell C prepaid airtime as part of the recapitalization transaction. Congruent with this acquisition of airtime, Cell C settled amounts owing to CEC, resulting in a significant decrease in trade receivables of ZAR 656 million.
Cash generated from operating activities would have amounted to ZAR 1.3 billion on a normalized basis, excluding net finance costs of ZAR 238 million, the excess Cell C inventory purchase of ZAR 1.4 billion, and the settlement of a lessor amounting to ZAR 161 million, all in line with the recapitalization transaction. Net cash flows utilized in investing activities amounted to ZAR 2.4 billion, primarily attributable to the purchase of intangible assets amounting to ZAR 936 million, net loans granted to associates and joint ventures of ZAR 898 million, and an increase in the investment in Cell C of ZAR 366 million. Of the ZAR 936 million invested in intangible assets, ZAR 429 million pertained to costs incurred by the groups in terms of the subscription income sharing arrangement, and ZAR 403 million pertained to costs incurred by the group in terms of the subscriber acquisition costs.
The net loans granted to associates and joint ventures of ZAR 898 million included net loans of ZAR 896 million relating to Cell C. This amount comprised the ZAR 950 million debt funding and the ZAR 111 million originating from TPC's participation in the reinvestment instrument, acquired at nominal value, offset by ZAR 128 million of capital repayments by Cell C. The additional investment of ZAR 366 million comprised ZAR 25 million of notes acquired in SPV1, a loan of ZAR 223 million provided to SPV4, both of which are secured by shares in Cell C, and ZAR 118 million of new money loan attributable to the acquisition of a further 9.53% of the issued share capital of Cell C.
Cash flows generated from financing activities amounted to ZAR 1.4 billion, of which ZAR 1.5 billion related to the net increase in borrowings and ZAR 67 million from the issuance of Class B preference shares, the proceeds of which were applied to the Cell C recapitalization transaction. These amounts were offset by lease payments of ZAR 42 million and the purchase of treasury shares amounting to ZAR 66 million. Cash and cash equivalents accumulated to ZAR 1.3 billion at the May 31st, 2023. We would like to extend our gratitude to the Blu Label board of directors, the staff, suppliers, customers, and business partners for their ongoing support and dedication to the group. Thank you. The floor is now open to questions.
Good afternoon, everybody, and welcome to Blu Label's results presentation for our year ended May 31st, 2023. With us, obviously, is Mark and Dean Suntup, our Chief Financial Officer, as you know. But really happy for the first time to bring Jorge, as you would have all heard, the new Chief Executive Officer of Cell C, and very proud and privileged to have him on board, and look forward to our journey with him as the new Chief Executive Officer of Cell C. I'll open it up. It's open already. If you've got any questions, please send them through, and I will start with the first one, which is from Philip Short. How do you see your path to de-leveraging and towards the timing of dividends and/or share buybacks? Number one.
Number two, in the media this week, Jorge was quoted as Cell C needing to target 15% of South African telco revenue share for Cell C or ZAR 27 billion. What is the revenue now, and what are the objective ways Cell C can reach this target? Number three, for Cell C, could we please organize a separate investor call where we can go through the numbers, as we haven't seen any figures for a while? Okay, so I'll start with question number one and then hand it over to Jorge for two and three. Our path for de-leveraging Blu Label is identical to what we spoke to you about six months ago. As you're fully aware, we have a facility with CEC, and we keep that completely separate of ZAR 1.9 billion.
It's not connected to the main facility of Blu Label, and the one doesn't work with the other, and they're not liable for each other. So we really use it to run our book of CEC, and it will remain in place, and in time, hopefully increase actually as we grow our book. So CEC, I'd like to leave separate. On the Blu Label one, where I think the question is aimed towards, we have Facility A and Facility B. Our Facility A is our long-term facility, which has been in place for a good on 15 years, 16 years, which currently is on ZAR 1.4 billion. We have intention of de-leveraging that by ZAR 240 million through our own choice. Therefore, taking it by September of next year, down to ZAR 1.16 billion.
On our Facility B, which was the money raised in essence for the Cell C transaction of ZAR 1.6 billion, we are de-leveraging it, as you know, on a monthly basis. So by October this year, we will have already been down to half of it, and by September of next year, it will be at zero. So in summary, by September, October of next year, we expect the total facilities in Blu Label Group to be ZAR 1.16 billion, and the entire Cell C money raised for the recap paid back. From the point of view of share buybacks and dividends, I would like to say that should this path run exactly how we intend it to run, and as of now it is, so from a monthly perspective, we are on target.
I would like to think that by results presentation next year, the board of Blu Label will take it very seriously, either in the form of share buybacks or dividends, or as we've mentioned in the past, a hybrid between the two, and, hopefully, reinstate one of the two or both. Over to you, Jorge.
Thanks very much, and thank you. Lovely to be here and be part of this. I think just some context, we had the media roundtable this week just talking a little bit about the first 60 days in the office. A couple of questions were posed about returning to profitability and sustainable profitability and growth at that, where we are today, and I thought it was important to share that we're really wanting to chase revenue market share, not subscribers. There's a multi-SIM environment, and so we talked a little bit of our strategic pillars, and so we need to really take full advantage of the prepaid environment. We've underperformed there. We have some really interesting and disruptive products that we want to take to market. I was also very clear that we don't intend to create the price wars.
It's not just pricing strategy on its own. It's really interesting products that are customer-centric, and we want to make sure that we do everything with the customer in mind. And of course, what would be a nice number, and hence what we said is, if we could get to a 15% revenue market share, that would be really, really good. At the moment, we're just above half of that, so there's lots of scope and lots of runway for that kind of growth. With our strategy around the MVNO pillar, I think it's critically important to protect what we've got. We've largely dominated in that space. So key to protect what we've got and obviously go after some further growth in the MVNO space. Now we really are embracing that. It's also one of the requirements from the spectrum obligation that had taken place in the last year.
We haven't done much in the enterprise space. We think there's an opportunity in that space as well. So really the intention is, first and foremost, as I said to the media before, is to create the most amazing culture in the country. So we want people to be knocking at the door that want to work for the organization because it's a really great place to work. And make sure that all stakeholder management and engagement really is done in a professional, ethical, and transparent way. So really just creating a great culture, a nice environment, some carving out of niche products, not starting a price war. We really believe we can do that. And as I had said, there's already some early green shoots taking place. And of course, it's really early days. It's 60 days in.
We think 18 months- 24 months is kind of the timeframe to see a different organization. But it is part of a broader recap plan, and we're kind of in year one of five. So we'll keep you posted. On the second part of the question in terms of financials, three years have been closed off in terms of apps, so we certainly can set that up going forward. But it hasn't been the case up until now, so happy to do that going forward.
I think just to elaborate on that last point, I think we started this in our last time we spoke, but we are going to make sure that it's followed through now. And that is, of course, we're trying to keep Cell C separate to Blu Label because I think you deserve more information and more clarity. And therefore, we will set up a separate briefing with Jorge and his team where you can obviously sit down and ask questions only on Cell C and hopefully get all the answers that all of you are looking for. So that will be done. And Lionel from our office will liaise with Cell C's office. So please let him know if you want to be part of that, and it of course will be set up shortly. The second question is from David Eberle.
We analysts need to model the future cash flows of your business. How should we be thinking about the growth of the subscription sharing revenue going forward? There was not much of an investment in the second half 2023. What does CapEx look like? Dave, just on that, I think we are not going to get bogged down in numbers on Cell C, and not for any other reason than I think it deserves more airtime and more time. Therefore, can we use any of these Cell C questions to take it offline for a direct one-on-one meeting, or group meeting, or one-on-one meeting with Cell C and their team to answer all these questions in depth for you guys. The next one is from John Murray from Investec. The elephant in the room is Cell C. Post the recap of Cell C, Blu has more than halved.
Two questions. Question number one, what is the FCF of Blu after the assessed losses? Two, when can shareholders expect paying dividends and buybacks? Okay, so the part two, I think I have answered already. Question number one, what is the FCF for Blu after the assessed losses? I will hand that over to Dean.
Brett, sorry, can you just repeat the question?
The question is, what is the FCF of Blu after the assessed losses?
I am not sure with regards to the assessed.
Free cash.
Yeah, the.
After the assessed losses, I am not sure what it has to do with the assessed.
Yeah, because the assessed losses we do not have. Maybe I can just give a bit of insight into the cash flow. You would have noticed on our cash flow that our cash would have declined from ZAR 2.7 billion to, as at May 31st, 2022, to ZAR 1.3 billion at May 31st, 2023. The significant decline in that cash is a result of the following factors. Naturally, when we did the recapitalization transaction, we utilized a portion of our own working capital in order to fund the recapitalization process. We utilized ZAR 860 million of Blu Label Telecoms working capital. You would note that our inventory would have increased by just under ZAR 1.7 billion, the movement in the inventory. Initially, we went to the banks and obtained facilities.
As we mentioned, with the facilities that we obtained from the banking consortium, we utilized ZAR 1.2 billion to purchase inventory from Cell C, where we paid Cell C, and we stocked up on inventory for the bank obligations. If we look at the difference between the ZAR 1.7 billion and the ZAR 1.2 billion, we have excess Cell C inventory of our books of around about ZAR 500 million. I think just to reiterate, we did tell the market that it would result in us stocking up on more Cell C inventory, and this will be part of the unwind as we sell the stock, both to the banks and into the market into the future. Net finance costs would have increased by ZAR 239 million.
This relates particularly to the ZAR 1.6 billion that we borrowed from the banks, so naturally, we would have to pay out further interest, which is offset against the ZAR 1.1 billion that we have given Cell C, the interest income that we received therefrom. The last thing was the settlement of the lessor relating to the airtime purchase agreement. We paid ZAR 161 million. If we add up those amounts, it is just short of ZAR 1.8 billion. This is the major reason for the decrease in our cash. We also included a slide in the presentation which normalized the cash utilized from operating activities of ZAR -501 million. When you normalize that with the excess inventory, the net interest received, as well as the settlement of the lessor, the net cash generated from operations would be just over ZAR 1.3 billion.
Thank you, Dean. The next question is just do we sell cell phones? We do. We sell cell phones on both post-paid and prepaid, probably to the value of about ZAR 300 million a month. Across the board, from the cheapest, obviously, to the most expensive. The next question is from David again. "The advances to customers aging is looking quite a bit worse than in 2022. The 60-day+ bucket is sitting at ZAR 640 million, with 75% provision coverage. Can you shed a bit of light on what's happening? What underlying books does this affect? Are you seeing a similar credit performance with your subscription sharing book?" I hand it back to Dean.
Thanks, David. This book that it affects is our Cell C post-paid book on the contract side. As you mentioned, there was a significant increase of ZAR 300 million compared to the prior year. I think that the increase was twofold. One, we did grow our book quite significantly. The book has increased, so that would naturally result in the ECL as you look out into the future, so your ECL will increase based on the increased size of the book. The second thing, as you mentioned, is we did a cleanup process that involved a comprehensive base reconciliation, which did result in additional churn. If we look at that, there was an increase in the number of customers that churned prior to May 2023, and these customers were only written off in the first quarter of the new financial year.
I think the last thing is if we look at ECLs in general with regards to the current macroeconomic environment in South Africa, Cell C also increased their ECLs based on, I guess, heightened anticipated future losses as well as looking as load shedding, rising interest rates, and power outages in the country. Overall, those three factors resulted in the larger ECL that was required.
Thank you, Dean. Moving to Duarte. Howzit, Duarte? How are you? Your first question on the bad debts, I think Dean has answered it. The second part is, has this come through anything on the BluAdvance that we're doing? The answer is no. Just to answer the second part of your question there. Your next question is, re: your inventory on Cell C airtime, is that ahead of the commitments made in the recap? The answer is no. It's very similar to what we had planned, to have in stock and to build up over the first 24 months. The reason for it was really simple. If you recall, and not to state the obvious, but Cell C never raised any money inside Cell C. The money that was raised inside Cell C was the pre-purchase of stock.
And really what the methodology of it was to do, and is to do, was to not gear up Cell C anymore and definitely not gear up Blu Label anymore. It was more a mechanism of how to put cash into Cell C over 24 months in order to give them the cash flow, their requirement to turn the hockey stick to obviously then be on their own without having the problem of having to borrow and to gear up more. The next question is from Maren. Hello, Maren. How are you? You mentioned that CEC's gross profit and NPAT were up nicely. What is CEC's NPAT now? Over to you, Dean.
Yeah. So Maren, CEC would have grown by 13%. The net profit after tax was ZAR 368 million. Just to reiterate, you would have seen how we disclosed in our financials. I know it has confused the market, but the extraneous costs, because we looked at the CEC loan, which was at ZAR 1.1 billion, when we moved the loan out of trade receivables and into interest-bearing borrowings, we had to do a modification of that loan, which resulted in ZAR 64.5 million reduction in that loan. So when I say ZAR 368 million, that is after adding back that ZAR 64.5 million into CEC's actual results. But that would be where they would sit.
Thank you, Dean. Just across the board, we get a lot of questions on why aren't we doing share buybacks at this very low price? The answer is very simple, actually. In our contracts with the banks, we are restricted from doing share buybacks or dividends, which we've explained in the past. Therefore, the forecast, or rather the outlook that I've given you, is in line with where we believe the banks are, where the banks will be, and where we'll be 12 months from now, to do with both of those. The next one is for Dean again. The valuation of Cell C does not appear to been altered after mid-year, but surely macro circumstances have changed, not to mention operational inputs from the ops.
Yeah. So, just to put some context to it, if we look at what we did in November, is we had to assess in terms of IAS 36, we needed to assess whether there was any reversal of impairments or impairments of our investment in Cell C. Just to put context back, if you recall, in 2019, we wrote off Cell C, the investment of ZAR 5.5 billion, of which we wrote off. That breakdown would have been a ZAR 2.5 billion impairment of the investment in Cell C, and the remainder would have been written off against equity losses to zero. From then, June 1st, 2019, all the way up to November in 2022, the unrecognized losses amounted to ZAR 2.2 billion.
Now, when we looked at that point in time, we did a valuation of Cell C, and our valuation of Cell C would have been ZAR 1.5 billion as we indicated to the market. We then applied a distress factor of just over 51% to that amount. Sorry. It would have been ZAR 3.1 billion, of which we applied a distress factor of 51%. That would have taken us then to the ZAR 1.5 billion valuation of Cell C. Blu Label's share that we would equity account as an associate is just over 63.19%, and that amounted to an amount of ZAR 962 million. So in November, we actually did a reversal of the initial impairment of ZAR 2.5 billion, and we reversed back ZAR 962 million.
At the same point in time, we recorded further investments of ZAR 366 million, and at that point, we then take the past losses against this investment amount of ZAR 962 and ZAR 366 million, and we write our past losses against the revaluation of the investment, and we write our investment down to zero. When it came to May, what we are required to do is we do an assessment whether we need to further impair the investment or is there an indication of a further reversal of the ZAR 2.5 billion. Because the investment at the May 31st is sitting in our books at zero, there would be no further impairment. And when we looked at the valuation and did stress testing on the valuation, there wasn't a further uplift in our valuation of Cell C. So at that point, we keep the results the same.
What we do is we recognize any losses in that period, we would recognize that against the past unrecognized losses.
Thank you, Dean. Just a comment. A special thanks to the accountants and the IFRS hell they have created for us and you. Okay, taking as the last question is to Jorge. How is the Capitec MVNO initiative progressing?
Yeah, thanks very much. I am glad that question was asked actually, because, not only is it a strategic pillar for us, but I can emphatically say that it is progressing really well. Over one million SIMs have been issued. It is a true partnership. It is really at the beginning stages of what we believe is going to be huge success. We are partnering extremely well with Capitec. Of course, this is the beginning of many services that will be launched. There is a roadmap that is mapped out collectively, and we are partnering well with them. Expect bigger and greater things from this. But, I am very happy with where it is at the moment and really embracing the partnership. I think it is going extremely well.
Thank you, Jorge. I did say last question, but another one has come in. To you again, Jorge. From Nick Kricher. Nick, how are you? Can you provide some examples of the green shoots that you are seeing in Cell C?
Yes, sure. I think I am not going to talk numbers from a Cell C perspective, but if I take that we were seeing declining revenues in prepaid, we were seeing net negative growth in prepaid from a gross adds versus churn perspective. We have seen already in the first month of July through some base management and CVM activities that that is now not only stemmed the trend of downward but actually gone upwards. So there is revenue growth July on June. And also from a gross adds perspective, we have seen some movement positively so already north of 20 points July on June and then August on July as well. We have had a whole bunch of negotiations that have taken place with some business partners, SIM card suppliers, et cetera, and then commercializing that activity with distribution partners and so on.
That will start flowing through into the market now because it takes a couple of months before the product reaches the shelves. We have launched some new products. Supa Bonus is out. It is a new prepaid starter pack. Default proposition for all prepaid starter packs, that has gone live a couple of days ago, actually. We have launched a new product called Pocket Change. I think it is the first of its kind in the market where you simply have a choice of what to buy under ZAR 5, under ZAR 10, under ZAR 20, et cetera. So that is gaining some nice traction. But at the risk of giving a very operational, detailed report, I think those are just some examples of what is starting to trend really well. It is soon, so it is 60 days.
We have got to give it some time, but I am very happy with the progress so far, and we expect that to continue so we can get ourselves into a position of good growth and profitability in a sustainable way, as I have managed to say before.
Thank you, Jorge. Thank you, everyone. On behalf of Mark, Dean, and myself, first of all to the board of Blu Label and our chairman, Mr. Nestadt, thank you for your continued support throughout the year again. As we mentioned, it has not been an easy year. It has been a tough year for us as individuals, I am sure all of you, and for us as a country. But overall, I think we are pretty satisfied with our results from a Blu Label perspective. Obviously very satisfied with the recap of Cell C. And of course, very excited for Jorge and his team to see what they can do next for us on Cell C. So wishing you and your families only the best, of course, health, and look forward to catching up with all of you in the near future. Thank you.