Lesaka Technologies, Inc. (Nasdaq: LSAK; JSE: LSK) today released
results for the first quarter ended September 30, 2023 (“Q1 2024”).
Performance Highlights for Q1 2024:
- Revenue of $136.1 million (ZAR 2.5
billion)1 in Q1 2024, compared to $124.8 million (ZAR 2.1 billion)1
for the first quarter ended September 30, 2022 (“Q1 2023”). In
South African Rand (“ZAR”) revenue grew 19%, driven by strong
year-on-year growth in both the Merchant and Consumer
Divisions.
- A return to operating profitability
with an operating income of $0.2 million (ZAR 4.2 million) for the
quarter, improving from an operating loss of $4.7 million (ZAR 80.0
million) in Q1 2023, driven by the turnaround in the Consumer
Division and growth in the Merchant Division.
- The net loss continued to narrow,
at $5.7 million (ZAR 105.6 million)1. This compares to a net loss
of $10.7 million (ZAR 183.2 million)1 in Q1 2023 and represents a
42% improvement in ZAR.
- Group Adjusted EBITDA, a non-GAAP
measure and reconciled in Attachment B, of $8.7 million (ZAR 162.5
million)1 representing an improvement of 108% compared to the Q1
2023 Group Adjusted EBITDA of $4.2 million (ZAR 71.9 million)1. In
ZAR Group Adjusted EBITDA increased by 126%.
- Continued year-on-year growth in
profitability in the Merchant Division, delivering Segment Adjusted
EBITDA of $8.1 million (ZAR 150.2 million)1 in Q1 2024 compared to
$7.9 million (ZAR 135.2 million) in Q1 2023, an increase of 11% in
ZAR. The outlook remains positive as the Merchant business extends
its footprint in Southern Africa’s informal market.
- The Consumer Division reported its
fourth consecutive quarter of profitability, delivering Segment
Adjusted EBITDA of $2.5 million (ZAR 46.6 million)1 in Q1 2024,
compared to a loss of $1.4 million (ZAR 23.9 million)1 in Q1 2023.
With the divisional turnaround complete, initiatives to grow the
Consumer Division are yielding positive results with revenue
increasing 13% in ZAR, off a reduced cost base and in a challenging
operating environment.
- Continued momentum in achieving
positive net cash provided by operating activities of $3.4 million
(ZAR 63.2 million) in Q1 2024, compared to net cash used in
operating activities of $7.7 million (ZAR 131.2 million) in Q1
2023.
- Guidance for fiscal 2024
re-affirmed.
Lesaka Group CEO Chris Meyer
said: “It has been yet another encouraging quarter for us. We
achieved a major milestone by returning to profitability at an
operating level for the quarter.”
Mr. Meyer added, “In a tough economic environment the continued
growth in all our key revenue drivers demonstrates the resilience
of our business model and the relevance of our services to our
customers. We will continue to innovate and extend the positive
impact we are having on the lives of South Africa’s small merchants
and grant beneficiaries as the digitalization trend in the informal
economy continues.”
(1) Average exchange rates applicable for the
quarter: ZAR 18.71 to $1 for Q1 2024, ZAR 17.13 to $1 for Q1 2023
and ZAR 18.74 to $1 for Q4 2023. The ZAR weakened 9.2% against the
U.S. dollar during Q1 2024 when compared to Q1 2023 and (0.2%) when
compared to the prior sequential quarter (Q4 2023).
Summary Financial Metrics
Three months ended
|
Three months ended |
|
|
|
|
|
|
|
|
|
Sep 30, 2023 |
|
Sep 30, 2022 |
|
Jun 30, 2023 |
|
Q1 ’24 vs Q1 ’23 |
|
Q1 ’24 vs Q4 ’23 |
|
Q1 ’24 vs Q1 ’23 |
|
Q1 ’24 vs Q4 ’23 |
(All figures in USD ‘000s
except per share data) |
USD ‘000’s(except per share
data) |
|
% change in USD |
|
% change in ZAR |
Revenue |
|
136,089 |
|
|
|
124,786 |
|
|
|
133,149 |
|
|
|
9 |
% |
|
|
2 |
% |
|
|
19 |
% |
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss) |
|
228 |
|
|
|
(4,671 |
) |
|
|
(6,631 |
) |
|
|
nm |
|
|
nm |
|
|
nm |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to
Lesaka |
|
(5,651 |
) |
|
|
(10,696 |
) |
|
|
(11,909 |
) |
|
|
(47 |
%) |
|
|
(53 |
%) |
|
|
(42 |
%) |
|
|
(53 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP loss per share ($) |
|
(0.09 |
) |
|
|
(0.17 |
) |
|
|
(0.19 |
) |
|
|
(48 |
%) |
|
|
(53 |
%) |
|
|
(44 |
%) |
|
|
(53 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group Adjusted EBITDA(1) |
|
8,719 |
|
|
|
4,199 |
|
|
|
8,449 |
|
|
|
108 |
% |
|
|
3 |
% |
|
|
127 |
% |
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fundamental loss per share
($)(1) |
|
- |
|
|
|
(0.08 |
) |
|
|
(0.04 |
) |
|
|
nm |
|
|
nm |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully-diluted weighted average
shares (‘000’s) |
|
63,805 |
|
|
|
62,445 |
|
|
|
63,805 |
|
|
|
2 |
% |
|
|
- |
|
|
|
n/a |
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average period USD / ZAR
exchange rate |
|
18.71 |
|
|
|
17.13 |
|
|
|
18.74 |
|
|
|
9 |
% |
|
|
(0 |
%) |
|
|
n/a |
|
|
n/a |
(1) Group Adjusted EBITDA, fundamental loss and
fundamental loss per share are non-GAAP measures and are described
below under “Use of Non-GAAP Measures—Group Adjusted EBITDA, and
—Fundamental net loss and fundamental loss per share.” See
Attachment B for a reconciliation of GAAP net loss attributable to
Lesaka to Group Adjusted EBITDA, and GAAP net loss to fundamental
net loss and loss per share.
Factors Impacting Comparability of Q1
2024 and Q1 2023 Results
- Higher revenue:
Our revenues increased 19% in ZAR, primarily due to an increase in
low margin prepaid airtime sales and other value added services, as
well as higher transaction, insurance and lending revenues, which
was partially offset by lower hardware sales revenue in our POS
hardware distribution business given the lumpy nature of bulk
sales;
- Operating income
generated: Operating income was achieved following years
of operating losses as a result of the various cost reduction
initiatives in Consumer implemented in prior periods as well as the
contribution from Connect;
- Higher net interest
charge: The net interest charge increased to $4.5 million
(ZAR 83.1 million) from $3.6 million (ZAR 62.1 million) primarily
due to higher interest rates; and
- Foreign exchange
movements: The U.S. dollar was 9% stronger against the ZAR
during Q1 2024 compared to the prior period, which adversely
impacted our U.S. dollar reported results.
Results of Operations by Segment and
Liquidity
Our chief operating decision maker is our Group
Chief Executive Officer and he evaluates segment performance based
on segment earnings before interest, tax, depreciation and
amortization (“EBITDA”), adjusted for items mentioned in the next
sentence (“Segment Adjusted EBITDA”). We do not allocate once-off
items, stock-based compensation charges, certain lease charges,
depreciation and amortization, impairment of goodwill or other
intangible assets, other items (including gains or losses on
disposal of investments, fair value adjustments to equity
securities, fair value adjustments to currency options), interest
income, interest expense, income tax expense or loss from
equity-accounted investments to our reportable segments. See
Attachment B for a reconciliation of GAAP net income before tax to
Group Adjusted EBITDA.
Merchant
Merchant Division revenue was $121.4 million in
Q1 2024, up 21% compared to Q1 2023 in ZAR. Segment revenue
increased due to the increase in low margin prepaid airtime sales
and other value-added services, which was partially offset by lower
hardware sales revenue given the lumpy nature of bulk sales. The
increase in Segment Adjusted EBITDA is primarily due to higher
sales activity, which was partially offset by lower hardware sales.
Connect records a significant proportion of its airtime sales in
revenue and cost of sales, while only earning a relatively small
margin. This significantly depresses the Segment Adjusted EBITDA
margins shown by the business. Our Segment Adjusted EBITDA margin
(calculated as Segment Adjusted EBITDA divided by revenue) for Q1
2024 and Q1 2023 was 6.6% and 7.2%, respectively.
Consumer
Consumer Division revenue was $15.6 million in
Q1 2024, 13% higher in ZAR compared to Q1 2023 and. Segment revenue
increased primarily due to more transaction fees generated from the
higher EPE account holders base, higher insurance revenues, and an
increase in lending revenue as a result of an increase in loan
originations. This increase in revenue, together with the cost
reduction initiatives initiated in fiscal 2022 and through fiscal
2023, have translated into a turnaround in the Consumer Division
and the realization of sustained positive Segment Adjusted EBITDA
for four consecutive quarters. Our Segment Adjusted EBITDA (loss)
margin for Q1 2024 and 2023 was 15.9% and (9.3%), respectively.
Group costs
Our group costs primarily include employee
related costs in relation to employees specifically hired for group
roles and costs related directly to managing the US-listed entity;
expenditures related to compliance with the Sarbanes-Oxley Act of
2002; non-employee directors’ fees; legal fees; group and US-listed
related audit fees; and directors’ and officers’ insurance
premiums. Our group costs for Q1 2024 decreased compared with the
prior period due to lower external audit, legal and consulting fees
and lower provision for executive bonuses, which was partially
offset by higher employee costs.
Cash flow and liquidity
As of September 30, 2023, our cash and cash
equivalents were $35.1 million and comprised of U.S.
dollar-denominated balances of $2.2 million, ZAR-denominated
balances of ZAR 586.7 million ($31.0 million), and other currency
deposits, primarily Botswana pula, of $1.9 million, all amounts
translated at exchange rates applicable as of September 30, 2023.
The increase in our unrestricted cash balances from June 30, 2023,
was primarily due to a positive contribution from our Merchant and
Consumer operations, which was partially offset by the utilization
of cash reserves to fund certain scheduled repayments of our
borrowings, purchase ATMs and safe assets, and to make an
investment in working capital.
Outlook for the Second Quarter 2024 (“Q2
2024”) and Full Fiscal Year 2024 (“FY 2024”)
While we report our financial results in USD, we measure our
operating performance in ZAR, and as such we provide our guidance
accordingly.
For Q2 2024, the quarter ending December 31,
2023, we expect:
- Revenue between ZAR 2.65 billion
and ZAR 2.75 billion.
- Group Adjusted EBITDA between ZAR
170 million and ZAR 180 million.
We re-affirm our outlook for FY 2024, the year
ending June 30, 2024. We expect:
- Revenue between ZAR 10.7 billion
and ZAR 11.7 billion.
- Group Adjusted EBITDA between ZAR
680 million and ZAR 740 million.
Management has provided its outlook regarding
Group Adjusted EBITDA, which is a non-GAAP financial measure and
excludes certain charges. Management has not reconciled this
non-GAAP financial measure to the corresponding GAAP financial
measure because guidance for the various reconciling items is not
provided. Management is unable to provide guidance for these
reconciling items because they cannot determine their probable
significance, as certain items are outside of the company's control
and cannot be reasonably predicted since these items could vary
significantly from period to period. Accordingly, reconciliations
to the corresponding GAAP financial measure is not available
without unreasonable effort.
Earnings Presentation for Q1 2024
Results
Our earnings presentation for Q1 2024 will be posted to the
Investor Relations page of our website prior to our earnings
call.
Webcast and Conference Call
Lesaka will host a webcast and conference call
to review results on November 8, 2023, at 8:00 a.m. Eastern Time
which is 3:00 p.m. South Africa Standard Time (“SAST”). A replay of
the results presentation webcast will be available on the Lesaka
investor relations website following the conclusion of the live
event.
Webcast Details
- The results webcast can be accessed by using the following
link: https://bit.ly/48M4stP
Participants using the webcast will be able to ask questions by
raising their hand and then asking the question “live.”
Conference Call Dial-in:
- US Toll-Free: +1 253 215 8782 or +1 301 715 8592
- South Africa Toll-Free: + 27 87 551 7702 or +27 87 550
3946
Participants using the conference call dial-in will be unable to
ask questions.
Use of Non-GAAP Measures
U.S. securities laws require that when we
publish any non-GAAP measures, we disclose the reason for using
these non-GAAP measures and provide reconciliations to the most
directly comparable GAAP measures. The presentation of Group
Adjusted EBITDA, Group Adjusted EBITDA margin, fundamental net
(loss) income, fundamental (loss) earnings per share, and headline
(loss) earnings per share are non-GAAP measures.
Non-GAAP Measures
Group Adjusted EBITDA is net income (loss)
before interest, taxes, depreciation and amortization, adjusted for
non-operational transactions (including loss on disposal of
equity-accounted investments), loss from equity-accounted
investments, stock-based compensation charges, lease adjustments
and once-off items. Lease adjustments reflect lease charges and
once-off items represents non-recurring expense items, including
costs related to acquisitions and transactions consummated or
ultimately not pursued. Group Adjusted EBITDA margin is Group
Adjusted EBITDA divided by revenue.
Fundamental net loss and fundamental loss per
share
Fundamental net loss and loss per share is GAAP
net loss and loss per share adjusted for the amortization of
acquisition-related intangible assets (net of deferred taxes),
stock-based compensation charges, and unusual non-recurring items,
including costs related to acquisitions and transactions
consummated or ultimately not pursued.
Fundamental net loss and loss per share for
fiscal 2024 also includes an impairment loss related to an
equity-accounted investment and a reversal of allowance for
doubtful loan receivable. Fundamental net loss and loss per share
for fiscal 2023 also includes a net gain on disposal of
equity-accounted investments, unrealized currency loss related to
our non-core business which we are in the process of winding down
and an impairment loss related to an equity-accounted
investment.
Management believes that the Group Adjusted
EBITDA, fundamental net (loss) income and fundamental (loss)
earnings per share metrics enhance its own evaluation, as well as
an investor’s understanding, of our financial performance.
Attachment B presents the reconciliation between GAAP net loss
attributable to Lesaka and these non-GAAP measures.
Headline (loss) earnings per share
(“H(L)EPS”)
The inclusion of H(L)EPS in this press release
is a requirement of our listing on the JSE. H(L)EPS basic and
diluted is calculated using net (loss) income which has been
determined based on GAAP. Accordingly, this may differ to the
headline (loss) earnings per share calculation of other companies
listed on the JSE as these companies may report their financial
results under a different financial reporting framework, including
but not limited to, International Financial Reporting
Standards.
H(L)EPS basic and diluted is calculated as GAAP
net (loss) income adjusted for the impairment losses related to our
equity-accounted investments and (profit) loss on sale of property,
plant and equipment. Attachment C presents the reconciliation
between our net (loss) income used to calculate (loss) earnings per
share basic and diluted and H(L)EPS basic and diluted and the
calculation of the denominator for headline diluted (loss) earnings
per share.
About Lesaka (www.lesakatech.com)
Lesaka Technologies, (Lesaka™) is a South
African Fintech company that utilizes its proprietary banking and
payment technologies to deliver superior financial services
solutions to merchants (B2B) and consumers (B2C) in Southern
Africa. Lesaka’s mission is to drive true financial inclusion for
both merchant and consumer markets through offering affordable
financial services to previously underserved sectors of the
economy. Lesaka offers cash management solutions, growth capital,
card acquiring, bill payment technologies and value-added services
to formal and informal retail merchants as well as banking,
lending, and insurance solutions to consumers across Southern
Africa. The Lesaka journey originally began as “Net1” in 1997 and
later rebranded to Lesaka (2022), with the acquisition of Connect.
As Lesaka, the business continues to grow its systems and
capabilities to deliver meaningful fintech-enabled, innovative
solutions for South Africa’s merchant and consumer markets.
Lesaka has a primary listing on NASDAQ
(NasdaqGS: LSAK) and a secondary listing on the Johannesburg Stock
Exchange (JSE: LSK). Visit www.lesakatech.com for additional
information about Lesaka Technologies (Lesaka ™).
Forward-Looking Statements
This press release contains certain statements
that may be considered forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and such statements are subject to the safe harbor created by those
sections and the Private Securities Litigation Reform Act of 1995,
as amended. Such statements may be identified by their use of terms
or phrases such as “expects,” “estimates,” “projects,” “believes,”
“anticipates,” “plans,” “could,” “would,” “may,” “will,” “intends,”
“outlook,” “focus,” “seek,” “potential,” “mission,” “continue,”
“goal,” “target,” “objective,” derivations thereof, and similar
terms and phrases. Forward-looking statements are based upon the
current beliefs and expectations of our management and are
inherently subject to risks and uncertainties, some of which cannot
be predicted or quantified, which could cause future events and
actual results to differ materially from those set forth in,
contemplated by, or underlying the forward-looking statements. In
this press release, statements relating to future financial results
and future financing and business opportunities are forward-looking
statements. Additional information concerning factors that could
cause actual events or results to differ materially from those in
any forward-looking statement is contained in our Form 10-K for the
fiscal year ended June 30, 2023, as filed with the SEC, as well as
other documents we have filed or will file with the SEC. We assume
no obligation to update the information in this press release, to
revise any forward-looking statements or to update the reasons
actual results could differ materially from those anticipated in
forward-looking statements.
Investor Relations Contacts:Phillipe
WelthagenEmail: phillipe.welthagen@lesakatech.comMobile: +27 84 512
5393
FNK IR: Rob Fink / Matt Chesler, CFAEmail: lsak@fnkir.com
Media Relations Contact:Janine Bester
GertzenEmail: janine@thenielsennetwork.com
LESAKA TECHNOLOGIES, INC. |
Unaudited Condensed Consolidated Statements of
Operations |
|
Unaudited |
|
Three months ended |
|
September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
(In thousands) |
|
|
|
|
|
|
REVENUE |
$ |
136,089 |
|
|
$ |
124,786 |
|
|
|
|
|
|
|
EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold, IT processing, servicing and support |
|
107,490 |
|
|
|
100,528 |
|
Selling, general and administration |
|
22,515 |
|
|
|
22,931 |
|
Depreciation and amortization |
|
5,856 |
|
|
|
5,998 |
|
|
|
|
|
|
|
OPERATING INCOME (LOSS) |
|
228 |
|
|
|
(4,671 |
) |
|
|
|
|
|
|
REVERSAL OF ALLOWANCE FOR
DOUBTFUL EMI LOAN RECEIVABLE |
|
250 |
|
|
|
- |
|
|
|
|
|
|
|
GAIN ON DISPOSAL OF
EQUITY-ACCOUNTED INVESTMENT |
|
- |
|
|
|
248 |
|
|
|
|
|
|
|
INTEREST INCOME |
|
449 |
|
|
|
411 |
|
|
|
|
|
|
|
INTEREST EXPENSE |
|
4,909 |
|
|
|
4,036 |
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAX
EXPENSE |
|
(3,982 |
) |
|
|
(8,048 |
) |
|
|
|
|
|
|
INCOME TAX EXPENSE |
|
264 |
|
|
|
31 |
|
|
|
|
|
|
|
NET LOSS BEFORE LOSS FROM
EQUITY-ACCOUNTED INVESTMENTS |
|
(4,246 |
) |
|
|
(8,079 |
) |
|
|
|
|
|
|
LOSS FROM EQUITY-ACCOUNTED
INVESTMENTS |
|
(1,405 |
) |
|
|
(2,617 |
) |
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO
LESAKA |
$ |
(5,651 |
) |
|
$ |
(10,696 |
) |
|
|
|
|
|
|
Net loss per share, in
United States dollars: |
|
|
|
|
|
Basic loss attributable to
Lesaka shareholders |
$ |
(0.09 |
) |
|
$ |
(0.17 |
) |
Diluted loss attributable to
Lesaka shareholders |
$ |
(0.09 |
) |
|
$ |
(0.17 |
) |
LESAKA TECHNOLOGIES, INC. |
Unaudited Condensed Consolidated Balance
Sheets |
|
Unaudited |
|
(A) |
|
September 30, |
|
June 30, |
|
2023 |
|
|
2023 |
|
|
(In thousands, except share data) |
ASSETS |
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
Cash and cash equivalents |
$ |
35,141 |
|
|
$ |
35,499 |
|
Restricted cash |
|
19,865 |
|
|
|
23,133 |
|
Accounts receivable, net of allowance of - September: $170; June:
$509 and other receivables |
|
27,939 |
|
|
|
25,665 |
|
Finance loans receivable, net of allowance of - September: $4,393;
June: $3,582 |
|
35,735 |
|
|
|
36,744 |
|
Inventory |
|
27,754 |
|
|
|
27,337 |
|
Total current assets before settlement assets |
|
146,434 |
|
|
|
148,378 |
|
Settlement assets |
|
26,352 |
|
|
|
15,258 |
|
Total current assets |
|
172,786 |
|
|
|
163,636 |
|
PROPERTY, PLANT AND EQUIPMENT,
net of accumulated depreciation of - September: $35,331; June:
$36,563 |
|
27,663 |
|
|
|
27,447 |
|
OPERATING LEASE
RIGHT-OF-USE |
|
5,655 |
|
|
|
4,731 |
|
EQUITY-ACCOUNTED
INVESTMENTS |
|
2,253 |
|
|
|
3,171 |
|
GOODWILL |
|
133,139 |
|
|
|
133,743 |
|
INTANGIBLE ASSETS, net of
accumulated amortization of - September: $33,619; June:
$30,173 |
|
117,595 |
|
|
|
121,597 |
|
DEFERRED INCOME TAXES |
|
9,859 |
|
|
|
10,315 |
|
OTHER LONG-TERM ASSETS,
including reinsurance assets |
|
77,822 |
|
|
|
77,594 |
|
TOTAL
ASSETS |
|
546,772 |
|
|
|
542,234 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
Short-term credit facilities for ATM funding |
|
19,754 |
|
|
|
23,021 |
|
Short-term credit facilities |
|
8,983 |
|
|
|
9,025 |
|
Accounts payable |
|
13,595 |
|
|
|
12,380 |
|
Other payables |
|
35,105 |
|
|
|
36,297 |
|
Operating lease liability - current |
|
1,722 |
|
|
|
1,747 |
|
Current portion of long-term borrowings |
|
3,630 |
|
|
|
3,663 |
|
Income taxes payable |
|
1,292 |
|
|
|
1,005 |
|
Total current liabilities before settlement obligations |
|
84,081 |
|
|
|
87,138 |
|
Settlement obligations |
|
25,362 |
|
|
|
14,774 |
|
Total current liabilities |
|
109,443 |
|
|
|
101,912 |
|
DEFERRED INCOME TAXES |
|
45,713 |
|
|
|
46,840 |
|
OPERATING LEASE LIABILITY -
LONG TERM |
|
4,081 |
|
|
|
3,138 |
|
LONG-TERM BORROWINGS |
|
130,587 |
|
|
|
129,455 |
|
OTHER LONG-TERM LIABILITIES,
including insurance policy liabilities |
|
2,253 |
|
|
|
1,982 |
|
TOTAL
LIABILITIES |
|
292,077 |
|
|
|
283,327 |
|
REDEEMABLE COMMON STOCK |
|
79,429 |
|
|
|
79,429 |
|
EQUITY |
|
|
|
|
|
LESAKA EQUITY: |
|
|
|
|
|
COMMON STOCK |
|
|
|
|
|
Authorized: 200,000,000 with $0.001 par value; |
|
|
|
|
|
Issued and outstanding shares, net of treasury: September:
63,638,912; June: 63,640,246 |
|
83 |
|
|
|
83 |
|
PREFERRED STOCK |
|
|
|
|
|
Authorized shares: 50,000,000 with $0.001 par value; |
|
|
|
|
|
Issued and outstanding shares, net of treasury: September: -; June:
- |
|
- |
|
|
|
- |
|
ADDITIONAL
PAID-IN-CAPITAL |
|
337,490 |
|
|
|
335,696 |
|
TREASURY SHARES, AT COST:
September: 25,244,286; June: 25,244,286 |
|
(288,238 |
) |
|
|
(288,238 |
) |
ACCUMULATED OTHER
COMPREHENSIVE LOSS |
|
(196,081 |
) |
|
|
(195,726 |
) |
RETAINED EARNINGS |
|
322,012 |
|
|
|
327,663 |
|
TOTAL LESAKA EQUITY |
|
175,266 |
|
|
|
179,478 |
|
NON-CONTROLLING INTEREST |
|
- |
|
|
|
- |
|
TOTAL
EQUITY |
|
175,266 |
|
|
|
179,478 |
|
|
|
|
|
|
|
TOTAL LIABILITIES,
REDEEMABLE COMMON STOCK AND SHAREHOLDERS’ EQUITY |
$ |
546,772 |
|
|
$ |
542,234 |
|
(A) Derived from audited consolidated financial statements.
LESAKA TECHNOLOGIES, INC. |
Unaudited Condensed Consolidated Statements of Cash
Flows |
|
Unaudited |
|
Three months ended |
|
September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
(In thousands) |
|
|
|
|
|
|
Cash flows from
operating activities |
|
|
|
|
|
Net loss |
$ |
(5,651 |
) |
|
$ |
(10,696 |
) |
Depreciation and amortization |
|
5,856 |
|
|
|
5,998 |
|
Movement in allowance for doubtful accounts receivable and finance
loans receivable |
|
1,525 |
|
|
|
1,049 |
|
Movement in interest payable |
|
1,764 |
|
|
|
26 |
|
Fair value adjustment related to financial liabilities |
|
(34 |
) |
|
|
63 |
|
Gain on disposal of equity-accounted investments |
|
- |
|
|
|
(248 |
) |
Loss from equity-accounted investments |
|
1,405 |
|
|
|
2,617 |
|
Reversal of allowance for doubtful loans receivable |
|
(250 |
) |
|
|
- |
|
Profit on disposal of property, plant and equipment |
|
(36 |
) |
|
|
(208 |
) |
Facility fee amortized |
|
227 |
|
|
|
249 |
|
Stock-based compensation charge |
|
1,759 |
|
|
|
1,462 |
|
Dividends received from equity accounted investments |
|
- |
|
|
|
21 |
|
Increase in accounts receivable and other receivables |
|
(2,345 |
) |
|
|
(2,943 |
) |
Increase in finance loans receivable |
|
(488 |
) |
|
|
(3,581 |
) |
Increase in inventory |
|
(479 |
) |
|
|
(279 |
) |
Increase (Decrease) in accounts payable and other payables |
|
375 |
|
|
|
(438 |
) |
Increase in taxes payable |
|
308 |
|
|
|
642 |
|
Decrease in deferred taxes |
|
(562 |
) |
|
|
(1,394 |
) |
Net cash provided by (used) in operating
activities |
|
3,374 |
|
|
|
(7,660 |
) |
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
Capital expenditures |
|
(2,809 |
) |
|
|
(4,501 |
) |
Proceeds from disposal of property, plant and equipment |
|
284 |
|
|
|
417 |
|
Acquisition of intangible assets |
|
(135 |
) |
|
|
- |
|
Proceeds from disposal of equity-accounted investment |
|
- |
|
|
|
253 |
|
Loan to equity-accounted investment |
|
- |
|
|
|
(112 |
) |
Repayment of loans by equity-accounted investments |
|
- |
|
|
|
112 |
|
Net change in settlement assets |
|
(11,237 |
) |
|
|
(1,884 |
) |
Net cash used in investing activities |
|
(13,897 |
) |
|
|
(5,715 |
) |
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
Proceeds from bank overdraft |
|
59,574 |
|
|
|
146,068 |
|
Repayment of bank overdraft |
|
(62,793 |
) |
|
|
(136,922 |
) |
Long-term borrowings utilized |
|
2,471 |
|
|
|
1,059 |
|
Repayment of long-term borrowings |
|
(2,629 |
) |
|
|
(1,580 |
) |
Proceeds from issue of shares |
|
21 |
|
|
|
6 |
|
Acquisition of treasury stock |
|
- |
|
|
|
(185 |
) |
Net change in settlement obligations |
|
10,696 |
|
|
|
1,987 |
|
Net cash provided by financing activities |
|
7,340 |
|
|
|
10,433 |
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
(443 |
) |
|
|
(8,487 |
) |
Net decrease in cash,
cash equivalents and restricted cash |
|
(3,626 |
) |
|
|
(11,429 |
) |
Cash, cash equivalents
and restricted cash – beginning of period |
|
58,632 |
|
|
|
104,800 |
|
Cash, cash equivalents
and restricted cash – end of period |
$ |
55,006 |
|
|
$ |
93,371 |
|
Lesaka Technologies, Inc.
Attachment A
Operating segment revenue, operating
(loss) income and operating (loss) margin:
Three months ended September 30, 2023,
and 2022 and June 30, 2023
|
|
Three months ended |
Change - actual |
Change – constant exchange
rate(1) |
|
|
Sep 30, 2023 |
|
Sep 30, 2022 |
|
Jun 30, 2023 |
Q1 ’24 vs Q1 ’23 |
Q1 ’24 vs Q4 ’23 |
Q1 ’24 vs Q1 ’23 |
Q1 ’24 vs Q4 ’23 |
Key segmental data, in ’000, except margins |
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchant |
|
$ |
121,361 |
|
|
$ |
109,782 |
|
|
$ |
115,193 |
|
|
11 |
% |
|
5 |
% |
|
21 |
% |
|
5 |
% |
Consumer |
|
|
15,580 |
|
|
|
15,004 |
|
|
|
16,487 |
|
|
4 |
% |
|
(6 |
%) |
|
13 |
% |
|
(6 |
%) |
Subtotal: Operating segments |
|
|
136,941 |
|
|
|
124,786 |
|
|
|
133,149 |
|
|
10 |
% |
|
3 |
% |
|
20 |
% |
|
3 |
% |
Intersegment eliminations |
|
|
(852 |
) |
|
|
- |
|
|
|
- |
|
|
nm |
|
nm |
|
nm |
|
nm |
Consolidated revenue |
|
$ |
136,089 |
|
|
$ |
124,786 |
|
|
$ |
133,149 |
|
|
9 |
% |
|
2 |
% |
|
19 |
% |
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchant |
|
$ |
8,061 |
|
|
$ |
7,893 |
|
|
$ |
8,228 |
|
|
2 |
% |
|
(2 |
%) |
|
12 |
% |
|
(2 |
%) |
Consumer |
|
|
2,480 |
|
|
|
(1,394 |
) |
|
|
2,481 |
|
|
nm |
|
(0 |
%) |
|
nm |
|
(0 |
%) |
Group costs |
|
|
(1,822 |
) |
|
|
(2,300 |
) |
|
|
(2,260 |
) |
|
(21 |
%) |
|
(19 |
%) |
|
(13 |
%) |
|
(20 |
%) |
Group Adjusted EBITDA |
|
|
8,719 |
|
|
|
4,199 |
|
|
|
8,449 |
|
|
108 |
% |
|
3 |
% |
|
127 |
% |
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Adjusted EBITDA (loss) margin (%) |
|
|
|
|
|
|
|
|
|
|
|
Merchant |
|
|
6.6 |
% |
|
|
7.2 |
% |
|
|
7.1 |
% |
|
|
|
|
Consumer |
|
|
15.9 |
% |
|
|
(9.3 |
%) |
|
|
15.0 |
% |
|
|
|
|
Group Adjusted EBITDA (loss) margin |
|
|
6.4 |
% |
|
|
3.4 |
% |
|
|
6.3 |
% |
|
|
|
|
(1) – This information shows
what the change in these items would have been if the USD/ ZAR
exchange rate that prevailed during Q1 2024 also prevailed during
Q1 2023 and Q4 2023.
Loss from equity-accounted
investments:
The table below presents the relative loss from
our equity-accounted investments:
|
Three months endedSeptember
30, |
|
|
2023 |
|
|
|
2022 |
|
|
% change |
Finbond |
$ |
(1,445 |
) |
|
$ |
(2,631 |
) |
|
|
(45 |
%) |
Share of net loss |
|
(278 |
) |
|
|
(1,521 |
) |
|
|
(82 |
%) |
Impairment |
|
(1,167 |
) |
|
|
(1,110 |
) |
|
|
5 |
% |
Other |
|
40 |
|
|
|
14 |
|
|
|
186 |
% |
Share of net income |
|
40 |
|
|
|
14 |
|
|
|
186 |
% |
Loss from equity-accounted investments |
$ |
(1,405 |
) |
|
$ |
(2,617 |
) |
|
|
(46 |
%) |
Lesaka Technologies, Inc.
Attachment B
Reconciliation of GAAP loss attributable
to Lesaka to Group Adjusted EBITDA loss:
Three months ended September 30, 2023
and 2022
|
Three months ended |
|
September 30, |
|
June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
Loss attributable to
Lesaka - GAAP |
$ |
(5,651 |
) |
|
$ |
(10,696 |
) |
|
$ |
(11,909 |
) |
Loss from equity accounted
investments |
|
1,405 |
|
|
|
2,617 |
|
|
|
2,535 |
|
Net loss before (earnings)
loss from equity-accounted investments |
|
(4,246 |
) |
|
|
(8,079 |
) |
|
|
(9,374 |
) |
Income tax (benefit)
expense |
|
264 |
|
|
|
31 |
|
|
|
(1,844 |
) |
Loss before income tax
expense |
|
(3,982 |
) |
|
|
(8,048 |
) |
|
|
(11,218 |
) |
Reversal of allowance for
doubtful EMI loans receivable |
|
(250 |
) |
|
|
- |
|
|
|
- |
|
Net (gain) loss on disposal of
equity-accounted investment |
|
- |
|
|
|
(248 |
) |
|
|
12 |
|
Impairment loss |
|
- |
|
|
|
- |
|
|
|
7,039 |
|
Unrealized Loss FV for
currency adjustments |
|
102 |
|
|
|
- |
|
|
|
179 |
|
Operating income/(loss) after
PPA amortization and net interest (non-GAAP) |
|
(4,130 |
) |
|
|
(8,296 |
) |
|
|
(3,988 |
) |
PPA amortization (amortization
of acquired intangible assets) |
|
3,608 |
|
|
|
3,928 |
|
|
|
3,590 |
|
Operating income/(loss) before
PPA amortization after net interest (non-GAAP) |
|
(522 |
) |
|
|
(4,368 |
) |
|
|
(398 |
) |
Interest expense |
|
4,909 |
|
|
|
4,036 |
|
|
|
5,159 |
|
Interest income |
|
(449 |
) |
|
|
(411 |
) |
|
|
(584 |
) |
Operating income/(loss) before
PPA amortization and net interest (non-GAAP) |
|
4,387 |
|
|
|
(332 |
) |
|
|
4,761 |
|
Depreciation (excluding
amortization of intangibles) |
|
2,248 |
|
|
|
2,070 |
|
|
|
2,203 |
|
Stock-based compensation
charges |
|
1,759 |
|
|
|
1,462 |
|
|
|
1,354 |
|
Lease adjustments |
|
696 |
|
|
|
812 |
|
|
|
651 |
|
Once-off items |
|
78 |
|
|
|
598 |
|
|
|
64 |
|
Group Adjusted EBITDA
- Non-GAAP |
$ |
8,719 |
|
|
$ |
4,199 |
|
|
$ |
8,449 |
|
|
Three months ended |
|
September 30, |
|
June 30, |
|
2023 |
|
2022 |
|
|
2023 |
|
Once-off items
comprises: |
|
|
|
|
|
|
|
|
|
|
Transaction costs |
$ |
78 |
|
|
$ |
203 |
|
|
$ |
58 |
|
Non-recurring revenue not
allocated to segments |
|
- |
|
|
|
- |
|
|
|
(1,469 |
) |
Employee misappropriation of
company funds |
|
- |
|
|
|
- |
|
|
|
1,152 |
|
Expenses incurred related to
closure of legacy businesses |
|
- |
|
|
|
395 |
|
|
|
244 |
|
Separation of employee
expense |
|
- |
|
|
|
- |
|
|
|
79 |
|
|
$ |
78 |
|
|
$ |
598 |
|
|
$ |
64 |
|
Once-off items are non-recurring in nature,
however, certain items may be reported in multiple quarters. For
instance, transaction costs include costs incurred related to
acquisitions and transactions consummated or ultimately not
pursued. The transactions can span multiple quarters, for instance
in fiscal 2022 we incurred significant transaction costs related to
the acquisition of Connect over a number of quarters, and the
transactions are generally non-recurring.
Non-recurring revenue not allocated to segments
includes once off revenue recognized that we believe does not
relate to either our Merchant or Consumer divisions. Employee
misappropriation of company funds represents a once-off loss
incurred. Expenses incurred related to close of legacy businesses
represents costs incurred related to subsidiaries which we are in
the process of deregistering/ liquidation and therefore we consider
these costs non-operational and ad hoc in nature. We incurred
separation costs related to the termination of certain senior-level
employees, including an executive officer and senior managers,
during fiscal 2023 and we consider these specific terminations to
be of a non-recurring nature.
Expenses incurred related to close of legacy
businesses represents costs incurred related to subsidiaries which
we are in the process of deregistering/ liquidation and therefore
we consider these costs non-operational and ad hoc in nature.
Reconciliation of GAAP net loss and loss
per share, basic, to fundamental net loss and loss per share,
basic:
Three months ended September 30, 2023
and 2022
|
Net (loss) income(USD '000) |
|
(L)PS, basic(USD) |
|
Net (loss) income(ZAR '000) |
|
(L)PS, basic(ZAR) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
GAAP |
|
(5,651 |
) |
|
|
(10,696 |
) |
|
|
(0.09 |
) |
|
|
(0.17 |
) |
|
|
(105,635 |
) |
|
|
(183,231 |
) |
|
|
(1.66 |
) |
|
|
(2.93 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset amortization,
net |
|
2,625 |
|
|
|
2,828 |
|
|
|
|
|
|
|
49,104 |
|
|
|
48,432 |
|
|
|
|
|
Stock-based compensation
charge |
|
1,759 |
|
|
|
1,462 |
|
|
|
|
|
|
|
32,797 |
|
|
|
25,045 |
|
|
|
|
|
Impairment of equity method
investment |
|
1,167 |
|
|
|
1,110 |
|
|
|
|
|
|
|
22,084 |
|
|
|
19,015 |
|
|
|
|
|
Reversal of allowance for
doubtful EMI loans receivable |
|
(250 |
) |
|
|
- |
|
|
|
|
|
|
|
(4,741 |
) |
|
|
- |
|
|
|
|
|
Transaction costs |
|
78 |
|
|
|
203 |
|
|
|
|
|
|
|
1,465 |
|
|
|
3,478 |
|
|
|
|
|
Net loss on disposal of
equity-accounted investments |
|
- |
|
|
|
(248 |
) |
|
|
|
|
|
|
- |
|
|
|
(4,248 |
) |
|
|
|
|
Non core international -
unrealized currency loss |
|
- |
|
|
|
395 |
|
|
|
|
|
|
|
- |
|
|
|
6,767 |
|
|
|
|
|
Fundamental |
|
(272 |
) |
|
|
(4,946 |
) |
|
|
- |
|
|
|
(0.08 |
) |
|
|
(4,926 |
) |
|
|
(84,742 |
) |
|
|
(0.08 |
) |
|
|
(1.36 |
) |
Lesaka Technologies, Inc.
Attachment C
Reconciliation of net loss used to
calculate loss per share basic and diluted and headline loss per
share basic and diluted:
Three months ended September 30, 2023
and 2022
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Net loss (USD’000) |
|
(5,651 |
) |
|
|
(10,696 |
) |
Adjustments: |
|
|
|
Impairment of equity method investments |
|
1,167 |
|
|
|
1,110 |
|
Net loss on sale of equity-accounted investments |
|
- |
|
|
|
(248 |
) |
Profit on sale of property, plant and equipment |
|
- |
|
|
|
(208 |
) |
Tax effects on above |
|
- |
|
|
|
58 |
|
|
|
|
|
Net loss used to calculate
headline loss (USD’000) |
|
(4,484 |
) |
|
|
(9,984 |
) |
|
|
|
|
Weighted average number of
shares used to calculate net loss per share basic loss and headline
loss per share basic loss (‘000) |
|
63,805 |
|
|
|
62,445 |
|
|
|
|
|
Weighted average number of
shares used to calculate net loss per share diluted loss and
headline loss per share diluted loss (‘000) |
|
63,805 |
|
|
|
62,445 |
|
|
|
|
|
Headline loss per share: |
|
|
|
Basic, in USD |
|
(0.07 |
) |
|
|
(0.16 |
) |
Diluted, in USD |
|
(0.07 |
) |
|
|
(0.16 |
) |
Calculation of the denominator for headline diluted loss
per share
|
Three months endedSeptember
30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
Basic weighted-average common
shares outstanding and unvested restricted shares expected to vest
under GAAP |
|
63,805 |
|
|
|
62,445 |
|
Denominator for headline diluted loss per share |
|
63,805 |
|
|
|
62,445 |
|
Weighted average number of shares used to
calculate headline diluted loss per share represents the
denominator for basic weighted-average common shares outstanding
and unvested restricted shares expected to vest plus the effect of
dilutive securities under GAAP. We use this number of fully-diluted
shares outstanding to calculate headline diluted loss per share
because we do not use the two-class method to calculate headline
diluted loss per share.
Grafico Azioni Lesaka Technologies (NASDAQ:LSAK)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Lesaka Technologies (NASDAQ:LSAK)
Storico
Da Set 2023 a Set 2024