Lesaka expects strong improvement in 2025

Lesaka Technologies’ losses narrowed in the year ended June, and it has provided a significantly higher profitability guidance for the 2025 financial year.

The JSE and Nasdaq-listed company, formerly Net1 UEPS Technologies, said on Thursday that revenue increased 11% for the year ended June to R10.6bn ($564.2m). Operating income increased to R67.3m compared with an operating loss of R275.3m a year ago. Its net loss improved 48% to R326.1m from a loss of R629.2m before.

Lesaka reported fundamental earnings per share of R1.06, after a lossof R2.66 in 2023. The GAAP (Generally Accepted Accounting Principles) loss per share improved 49% to R5.07. The group said its merchant division’s revenue increased 12% to R9.3bn and segment adjusted Ebitda increased 4% to R624.1m. Its consumer division revenue increased 15% to R1.3bn and segment adjusted Ebitda increased 361% to R274.2m.

Lesaka CEO Southern Africa Lincoln Mali said the group was particularly pleased with the consumer division's performance.

“Our teams have worked hard to turn it into an important profit and cash flow contributor for the group, demonstrated by the 94% growth in segment adjusted Ebitda this quarter.”

“We continue to materially improve the profitability of Lesaka achieving group adjusted Ebitda of R691m in financial year 2024, up from R445m in financial year 2023 and a significant positive transformation compared to a group adjusted Ebitda loss of R328m in financial year 2022,” chair Ali Mazanderani said.

“We have carried this momentum into financial year 2025 and are providing a guidance range of R900m to R1bn. We have established ourselves as the leading independent fintech in Southern Africa with significant room for increased growth and profitability over the coming years,” he said.

Lesaka is also expecting revenue of R10bn-R11bn in the 2025 financial year.

The group was engaging its funders to provide the consumer division with a specific debt facility to be used to fund the consumer lending book, it said. That would result in the inclusion of the related interest expense charges in group adjusted Ebitda, it said.

“We are entering an exciting period of growth for Lesaka, integrating the Adumo and Touchsides acquisitions with our existing fintech solutions as we strive to empower Southern African consumers and merchants to fulfil their potential,” Mali said.

Earlier in September, the Competition Tribunal approved Lesaka’s deal to buy local fintech operator Adumo for R1.6bn through a combination of stock and cash. The group signed a definitive agreement to acquire Adumo for $85.9m (R1.59bn at the time) in May. 

Adumo’s ultimate shareholders include private equity player Apis Partners, African Rainbow Capital — the largest shareholder of Crossfin, the International Finance Corporation and Adumo management.