Lesaka meets first-quarter revenue and profitability guidance

Adumo is SA’s largest independent payments processor and has been around for more than 20 years.

Lincoln Mali, Lesaka CEO for Southern Africa, told Business Day the Adumo transaction enhanced Lesaka’s technology platform, adding customers, solutions and meaningful scale.

“We’re building a platform that is multi-product and customer focused. What we’re going to compete on is not price but value because we can use a broad range of products to get to the customer.”

Business Day TV takes a closer look at the results with the company's CEO, Lincoln Mali.

With the deal complete, the group’s fintech platform now serves 1.7-million active consumers and 120,000 merchants, and processes more than R270bn in throughput per year. It has more than 3,300 employees in SA, Namibia, Botswana, Zambia and Kenya.

 “For example, on the consumer side, we don’t just have a transactional account. We have a lending, insurance and VAS [value added services] proposition. And now we have Adumo Payouts, which is people that are nongrant beneficiaries, giving us a new [entry] into that world,” he said.

“On the merchant side, we can now offer from POS [point of sale] solutions to credit, payment and data analytics, and software-as-a-service. This gives us unique ability to pull together solutions for the client that another competitor may not have because they typically deal in one or two things.”

This comes as Lesaka — worth R7.7bn — met its revenue and profitability guidance in the first quarter, but reported a net loss after one-off transaction costs relating to the acquisition of Adumo.

The JSE- and Nasdaq-listed company, formerly Net1 UEPS Technologies, reported revenue of $145.5m (R2.6bn) for the quarter to end-September — at the midpoint of its revenue guidance − and compares with $136.1m a year ago.

It reported an operating loss of $0.05m, compared with operating income of $0.2m in the first quarter of 2024. This included $1.7m of one-off transaction costs relating to the acquisition of Adumo. Excluding the effect of these transaction costs, operating income would have been $1.7m. 

The group’s net loss, including the Adumo transaction costs, narrowed to $4.5m, an improvement of 23%. The group’s consumer division grew revenue 30% in rand terms, while that of the merchant division remained flat.

“We achieved the midpoint of our revenue and group adjusted ebitda [earnings before interest, tax, depreciation and amortisation] guidance for [the first quarter of] 2025,” said chair Ali Mazanderani.

“We have now delivered on our group adjusted ebitda guidance for nine successive quarters and reaffirm our financial year 2025 revenue guidance of R10bn-R11bn and FY2025 group adjusted ebitda guidance of R900m-R1bn,” he said.

The group’s net revenue guidance of R5.2bn-R5.6bn for the 2025 financial year implies 35% year-on-year growth at the midpoint of this range.