Lesaka (LSAK) Q4 Earnings call transcript Sep 12, 2024

In the recent earnings call, Lesaka Technologies presented a robust financial performance for the fourth quarter of fiscal 2024, showcasing significant improvements in key performance indicators and strategic acquisitions. The call, led by Ali Zaynalabidin Mazanderani, Chairman of Lesaka, highlighted the company's journey of transformation and its focus on growth opportunities in the Southern African market.

Financial Performance Highlights

Lesaka reported an impressive 55% increase in group adjusted EBITDA to ZAR 691 million, with a positive operating income of ZAR 67 million. This marked a significant turnaround from a loss of ZAR 275 million in the previous fiscal year. The company's net debt to group adjusted EBITDA ratio also improved to 2.5x, down from 4.5x in the previous year.

Strategic Acquisitions and Expansion

Steven Heilbron, CEO of Merchant Division and Head of Corporate Development, discussed the company's strategic acquisitions, including Touchsides and Adumo, which have expanded Lesaka's market presence and product offerings. The acquisitions of Touchsides and Adumo have brought in new verticals, such as the licensed tavern market and the hospitality sector, respectively. These acquisitions have also significantly bolstered Lesaka's position in the SME merchant market, making it a leading provider in both the SME and micro-merchant sectors.

Consumer Division Performance

Lincoln Mali, CEO of Lesaka Southern Africa, showcased the consumer division's performance, which saw a 4% revenue growth and a 94% increase in consumer segment adjusted EBITDA for the year. The division has been focusing on growing the EPE account base and cross-selling other products to grant recipients. With a 21% increase in permanent grant customers and a 32% increase in gross new account activations in FY 2024, the consumer division is well-positioned for future growth.

Looking Ahead: FY 2025 Guidance and Future Outlook

For the upcoming fiscal year, Lesaka expects revenue to be between ZAR 10 billion and ZAR 11 billion, with group adjusted EBITDA projected to be between ZAR 900 million to ZAR 1 billion. This represents a growth rate of between 30% and 45% year-on-year. The company also plans to continue its M&A strategy, with a focus on bolt-on and transformative acquisitions to augment its scale and addressable market.

Conclusion

Lesaka Technologies' earnings call highlighted the company's successful financial performance, strategic acquisitions, and focus on growth opportunities in the Southern African market. With a strong financial position, strategic acquisitions, and a clear growth strategy, Lesaka is well-positioned to continue its trajectory of success and define a fantastic future for itself and its customers.