Lesaka Continues Strong Growth Trajectory and Achieves Upper End of Revenue Guidance
November 07 2023 - 4:05PM
Business Wire
Lesaka Technologies, Inc. (Nasdaq: LSAK; JSE: LSK) today
released its results for the first quarter (“Q1 2024”) ended
September 30, 2023.
Performance highlights for Q1 2024:
- Revenue of $136.1 million (ZAR 2.5 billion)1 in Q1 2024,
compared to $124.8 million (ZAR 2.1 billion)1 for the first quarter
ended September 30, 2022 (“Q1 2023”). In South African Rand (“ZAR”)
revenue grew 19%, driven by strong year-on-year growth in both the
Merchant and Consumer Divisions.
- A return to operating profitability with Operating Profit of
$0.2 million (ZAR 4.2 million) for the quarter, improving from an
Operating Loss of $4.7 million (ZAR 80.0 million) in Q1 2023,
driven by the turnaround in the Consumer Division and growth in the
Merchant Division.
- The Net Loss continued to narrow, at $5.7 million (ZAR 105.6
million)1. This compares to a net loss of $10.7 million (ZAR 183.2
million)1 in Q1 2023 and represents a 42% improvement in ZAR.
- Group Adjusted EBITDA, a non-GAAP measure and reconciled in
Attachment B, of $8.7 million (ZAR 162.5 million)1 representing an
improvement of 108% compared to the Q1 2023 Group Adjusted EBITDA
of $4.2 million (ZAR 71.9 million)1. In ZAR Group Adjusted EBITDA
increased by 126%.
- Continued year-on-year growth in profitability in the Merchant
Division, delivering Segment Adjusted EBITDA of $8.1 million (ZAR
150.2 million)1 in Q1 2024 compared to $7.9 million (ZAR 135.2
million) in Q1 2023, an increase of 11% in ZAR. The outlook remains
positive as the Merchant business extends its footprint in Southern
Africa’s informal market.
- The Consumer Division reported its fourth consecutive quarter
of profitability, delivering Segment Adjusted EBITDA of $2.5
million (ZAR 46.6 million)1 in Q1 2024, compared to a loss of $1.4
million (ZAR 23.9 million)1 in Q1 2023. With the divisional
turnaround complete, initiatives to grow the Consumer Division are
yielding positive results with revenue increasing 13% in ZAR, off a
reduced cost base and in a challenging operating environment.
- Continued momentum in achieving positive net cash provided by
operating activities of $3.4 million (ZAR 63.2 million) in Q1 2024,
compared to net cash used in operating activities of $7.7 million
(ZAR 131.2 million) in Q1 2023.
- Guidance for fiscal 2024 re-affirmed.
(1) Average exchange rates applicable for the quarter: ZAR 18.71
to $1 for Q1 2024, ZAR 17.13 to $1 for Q1 2023 and ZAR 18.74 to $1
for Q4 2023. The ZAR weakened 9.2% against the U.S. dollar during
Q1 2024 when compared to Q1 2023 and (0.2%) when compared to the
prior sequential quarter (Q4 2023).
Lesaka Group CEO Chris Meyer said: “It has been yet
another encouraging quarter for us. We achieved a major milestone
by returning to profitability at an operating level for the
quarter.”
Mr. Meyer added, “In a tough economic environment the
continued growth in all our key revenue drivers demonstrates the
resilience of our business model and the relevance of our services
to our customers. We will continue to innovate and extend the
positive impact we are having on the lives of South Africa’s small
merchants and grant beneficiaries as the digitalization trend in
the informal economy continues.”
Full release and webcast details at
https://ir.lesakatech.com/.
The discussion of our consolidated overall results of operations
is based on amounts as reflected in our unaudited condensed
consolidated financial statements which are prepared in accordance
with U.S. GAAP. We analyze our results of operations both in U.S.
dollars, as presented in the unaudited condensed consolidated
financial statements, and supplementally in ZAR, because ZAR is the
functional currency of the entities which contribute the majority
of our revenue and is the currency in which the majority of our
transactions are initially incurred and measured. Due to the
significant impact of currency fluctuations between the U.S. dollar
and the ZAR on our reported results and because we use the U.S.
dollar as our reporting currency, we believe that the supplemental
presentation of our results of operations in ZAR is useful to
investors to understand the changes in the underlying trends of our
business.
Use of Non-GAAP Measures
U.S. securities laws require that when we publish any non-GAAP
measures, we disclose the reason for using these non-GAAP measures
and provide reconciliations to the most directly comparable GAAP
measures. The presentation of EBITDA and Group Adjusted EBITDA are
non-GAAP measures.
Below is the reconciliation between our GAAP measure and our
non-GAAP measures.
FY24 Q1
FY23 Q4
FY23 Q1
FY24 Q1
FY23 Q4
FY23 Q1
For the quarter
$’000
$’000
$’000
ZAR’000
ZAR’000
ZAR’000
Average exchange rate for conversion
from ZAR to $
18.71
18.74
17.13
18.71
18.74
17.13
Loss attributable to Lesaka –
GAAP
(5,651
)
(11,909
)
(10,696
)
(105,635
)
(223,192
)
(183,231
)
Loss from equity accounted investments
1,405
2,535
2,617
26,657
47,509
44,831
Net loss before loss from
equity-accounted investments
(4,246
)
(9,374
)
(8,079
)
(78,978
)
(175,683
)
(138,400
)
Income tax (benefit) expense
264
(1,844
)
31
4,825
(34,560
)
532
Loss before income tax expense
(3,982
)
(11,218
)
(8,048
)
(74,153
)
(210,243
)
(137,868
)
Reversal of allowance for doubtful EMI
loans receivable
(250
)
-
-
(4,741
)
-
-
Net loss (gain) on disposal of
equity-accounted investment
-
12
(248
)
-
225
(4,248
)
Impairment loss
-
7,039
-
-
131,921
-
Unrealized loss FV for currency
adjustments
102
179
-
1,947
3,355
-
Operating income/(loss) after PPA
amortization and net interest (non-GAAP)
(4,130
)
(3,988
)
(8,296
)
(76,947
)
(74,742
)
(142,116
)
PPA amortization (amortization of acquired
intangible assets)
3,608
3,590
3,928
67,266
67,266
67,267
Operating income/(loss) before PPA
amortization after net interest (non-GAAP)
(522
)
(398
)
(4,368
)
(9,681
)
(7,476
)
(74,849
)
Interest expense
4,909
5,159
4,036
91,429
96,687
69,140
Interest income
(449
)
(584
)
(411
)
(8,368
)
(10,945
)
(7,041
)
Operating income/(loss) before PPA
amortization and net interest (non-GAAP)
3,938
4,177
(743
)
73,380
78,266
(12,750
)
Depreciation (excluding amortization of
intangibles)
2,248
2,203
2,070
41,900
41,303
35,482
Stock-based compensation charges
1,759
1,354
1,462
32,797
25,376
25,045
Lease adjustments
696
651
812
12,961
12,201
13,910
Once-off items
78
64
598
1,465
1,199
10,245
Group Adjusted EBITDA
(non-GAAP)
8,719
8,449
4,199
162,503
158,345
71,932
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107247751/en/
Investor Relations Contacts: Phillipe Welthagen Email:
phillipe.welthagen@lesakatech.com Mobile: +27 84 512 5393
FNK IR: Rob Fink / Matt Chesler, CFA Email: lsak@fnkir.com
Media Relations Contact: Janine Bester Gertzen Email:
janine@thenielsennetwork.com
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