Lesaka reduces its net loss in the third quarter

Lesaka Technologies reduced its net loss in the third quarter, as revenue increased by 9% in rand terms.

Lesaka provides informal retail merchants with point-of-sales devices that allow them to pay their suppliers and sell many products, including airtime and electricity. It has a primary listing on the Nasdaq and a secondary one on the JSE.

The group reported revenue of R2.6bn in the quarter to end-March from R2.4bn a year ago.

Operating income improved to R15m for the quarter from an operating loss of R33.2m a year ago. Its net loss shrank to R76.4m from a loss of R104.4m before.

The merchant division reported an 8% increase in revenue and the consumer division’s revenue was 19% higher year on year in rands.

The company maintained its revenue guidance for fiscal 2024 at R10.7bn-R11.7bn, but raised group adjusted earnings before interest, tax, depreciation and amortisation (ebitda) guidance to between R685m and R705m from the previously guided R625m-R685m.

On Wednesday, Lesaka announced it had signed a deal to buy local fintech operator Adumo for R1.6bn through a combination of stock and cash, indicating its strategy of acquisitive growth remained in place.

“We are excited about the anticipated completion of the Adumo acquisition, we believe it will facilitate an acceleration of our organic growth story and cement Lesaka’s position as Southern Africa’s leading Fintech,” said Lesaka group chair Ali Mazanderani.

The group also recently acquired Touchsides from Heineken SA for an undisclosed sum. That acquisition is expected to boost the group’s Kazang footprint in the tavern industry in SA’s informal market. Kazang is a payments platform that includes the buying and selling of airtime and micro-lending. This added to the buyout of the Connect Group in April 2022 through a R3.7bn deal that is set to expand its footprint in the small, medium and micro enterprises sector in Southern Africa. Lesaka said that once the Adumo transaction was complete, its ecosystem would serve 1.7-million active consumers and 119,000 merchants, and process more than R250bn in throughput — made up of R40bn from cards, R100bn in value added services (VAS) and R110bn in cash — per year.

Additionally, the group would have more than 3,300 employees operating in five countries: SA, Namibia, Botswana, Zambia, and Kenya.