Lesaka trims Q4’23 loss
Wed, 13 Sep 2023 11:34:34 GMT
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AI Generated Summary
- The merchant business of LASAKA Technologies has experienced buoyant activity, contributing to a 21% reduction in the company's quarterly loss.
- The focus on the informal economy has led to substantial growth, with LASAKA serving 75,000 spaza shop owners and processing 8 billion rand of card payments in the sector.
- LASAKA's transformation from a loss-making entity to delivering EBITDA of 498 million rand reflects a remarkable turnaround and commitment to financial sustainability.
LASAKA Holdings, a FinTech Payments Group, has reported a 21% reduction in its quarterly loss to US$11.9 million, driven by strong performance in its merchant division. The company's merchant business, which primarily provides lending to SMEs in the informal market, has witnessed buoyant activity, contributing to narrowing the loss. Chris Mayer, the CEO of LASAKA Technologies, emphasized the transformative period the company has undergone, attributing the improved results to the successful integration of Connect Group into the merchant business and the turnaround in the consumer business over the past year.
Mayer highlighted that LASAKA has a market capitalization of four and a half billion rand and has seen its revenues surge to 9.3 billion rand from 3.3 billion the previous year. The company's focus on the informal economy, supporting small merchants such as spaza shop owners, has yielded positive outcomes, with significant growth in various aspects of the business. LASAKA now services 75,000 spaza shop owners with POS devices, up from 51,000 a year ago. The number of card acceptance devices has also increased to nearly 45,000, reflecting almost 100% growth year-over-year. The company is processing approximately 8 billion rand of card payments in the informal economy, marking a threefold increase.
Moreover, LASAKA's VAZ business, Kazang, enables merchants in the informal economy to offer value-added services, including airtime, prepaid electricity, and cross-border payments. The company processed over 26 billion rand of VAZ services and facilitated over 4 billion rand of supplier payments for merchants, transitioning them from cash to digital transactions.
Mayer discussed the shift from cash to digital in the informal economy, underscoring LASAKA's role as a key player in providing financial services to untapped markets. While over 90% of transactions in the informal economy are still cash-based, less than 4% of merchants have access to card acceptance. LASAKA's comprehensive services, ranging from cash management to credit provision, position the company as a vital player in empowering small businesses and enhancing financial inclusion.
The company's remarkable turnaround from a loss-making business to delivering EBITDA of 498 million rand for the year demonstrates its commitment to growth and financial sustainability. LASAKA's consumer business, which previously incurred significant losses, has now achieved EBITDA of 59 million rand, showcasing a remarkable improvement.
As LASAKA Technologies continues to focus on financial inclusion for merchants and consumers in the informal economy, the company anticipates a robust growth trajectory and remains optimistic about its future prospects.