EasyPay owner Lesaka gets informal-sector boost, eyes profit next year

Lesaka, which has been growing rapidly since rebranding from Net UEPS in 2022, reported its loss jumped to R404 million from about R76 million in its third quarter, weighed down by about a R311-million hit to non-core asset Mobikwik, an Indian payments firm which listed in that country late last year.

However, revenue was within guidance, though it dipped, while adjusted earnings before interest, taxation, depreciation and amortisation (ebitda) improved 29% in rand terms to about R237 million, in line with guidance.

The group also said it expects net income attributable to shareholders to be positive in 2026, though this excludes possible acquisitions, while its guidance for 2026 implies an about 42% rise in adjusted ebitda at the midpoint. It has guided as much as R1 billion of this profit measure for 2025 and R1.45 billion for 2026.

Speaking to News24, CEO Lincoln Mali said the group was pleased with meeting guidance for an 11th consecutive quarter, benefitting from a record performance from its consumer businesses - such as transactional banking or insurance.

Along with the profit performance, the group was also pleased it with a new employee share ownership plan (ESOP), which is a first for SA by being inclusive of all staff save executives - while it has also added Investec as a banking partner, adding to RMB, with the group also refinancing its debt on more attractive terms.

This was another vote of confidence by a reputable bank, said Mali, who added that he saw the ESOP as a major milestone as well.

"It's one of the most pleasing things for me at a personal level for us to be able to get alignment between where we're going and our staff, being part of that journey and, and hopefully getting a future benefit," he said.

"So, yes, we're quite pleased and optimally positioned for growth and performance."

The writedown to MobiKwik was a reflection of that company being publicly listed, he said, meaning little control over its valuation, and the group doesn't have a board seat. Lesaka had held 10% of the group ahead of its listing but will have an opportunity to exit its stake from June - given that Indian regulations have specifications regarding timing of share sales for newly listed companies.

Lesaka, now valued at about R5.6 billion publicly, had changed its name when it acquired Connect Group for R3.8 billion. This was a transformative acquisition aimed at helping it build a fintech platform that will offer financial services and payment processing to both consumers and merchants across the formal and informal sectors in southern Africa.

It offers transactional accounts (banking), insurance, lending, and payment solutions for historically under-serviced consumers, as well as micro-merchants and merchants.

Its GAAP business is the biggest provider of point-of-sale technology to SA's hospitality industry, while it also provides advanced services to corporate customers. Its EasyPay Everywhere business, among other things, offers a card that grant recipients can use to withdraw from ATMs.

It announced in September it had agreed to acquire Adumo for R1.59 billion in a cash-and-share deal that brought in Patrice Motsepe's African Rainbow Capital as an investor.

Mali said its focus on the informal market meant it hadn't seen a softening in its business demand amid a dip in confidence - including in SA - as a result of geopolitical jitters. This didn't mean that such pressure won't materialise, but the group hadn't altered its guidance either, he said.

Mali said the group is busy bedding down its acquisitions, which was proceeding well, and would stil consider further additions if they were value accretive.