Lesaka Technologies Inc: Form 10-Q/A for the period ended Sep 30, 2024
Filed with the SEC on Sep 29, 2025 and accepted by EDGAR at Sep 29, 2025, 16:19 ET.
Management's discussion and analysis
As filed, 62,935 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
The following discussion should be read in conjunction with our Annual Report on Form 10-K for the year ended June 30, 2024,
and the unaudited condensed consolidated financial statements and the accompanying notes included in this Form 10-Q.
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. We discuss why we consider it useful to
present these non -GAAP measures and the material risks and limitations of these measures, as well as a reconciliation of these non-
GAAP measures to the most directly comparable GAAP financial measure below at “—Results of Operations—Use of Non-GAAP
Measures” below.
Restatement
As previously described in the Explanatory Note above and in Note 1 to our unaudited condensed consolidated financial
statements, we have restated our previously issued unaudited condensed consolidated financial statements and related notes as of
September 30, 2024, and for the three months ended September 30, 2024. As a result, the previously reported financial information as
of and for the three months ended September 30, 2024 in this Item 2, Management’s Discussion and Analysis of Financial Condition
and Results of Operations has been updated to reflect the relevant restatement. Refer to Note 1 in our unaudited condensed consolidated
financial statements for additional information related to the restatement, including descriptions of the adjustments and the impacts on
our unaudited condensed consolidated financial statements.
Other than the effect of the restatement as described in Note 1 in our unaudited condensed consolidated financial statements, this
section has not been otherwise modified and does not reflect any information or events occurring after November 6, 2024, the filing
date of the Original Filing, or modify or update those disclosures affected by events that occurred at a later date or facts that
subsequently became known to the Company, except to the extent they are otherwise required to be included and discussed herein.
Forward-looking statements
Some of the statements in this Form 10-Q constitute forward-looking statements. These statements relate to future events or our
future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s
actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity,
performance or achievements expressed, implied or inferred by these forward-looking statements. Such factors include, among other
things, those listed under Item 1A.—“Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2024. In some
cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should ”, “could”, “would”, “expects”,
“plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other
comparable terminology.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we do not know whether
we can achieve positive future results, levels of activity, performance, or goals. Actual events or results may differ materially. We
undertake no obligation to update any of the forward-looking statements after the date of this Form 10-Q to conform those statements
to reflect the occurrence of unanticipated events, except as required by applicable law.
You should read this Form 10-Q and the documents that we reference herein and the documents we have filed as exhibits hereto
and thereto and which we have filed with the United States Securities and Exchange Commission (“SEC”) completely and with the
understanding that our actual future results, levels of activity, performance and achievements may be materially different from what
we expect. We qualify all of our forward-looking statements by these cautionary statements.
Recent Developments
Our mission at Lesaka is driven by a purpose to provide financial services and software to Southern Africa’s underserviced
consumers (B2C) and merchants (B2B), improving people’s lives and increasing financial inclusion in the markets in which we
operate. We offer a wide range of integrated payment solutions including transactional accounts (banking), lending, insurance, payouts,
cash management solutions, card acceptance, supplier payments, software services and bill payments. By providing a full-service
fintech platform in our connected ecosystem, we facilitate the digitization of commerce in our markets.
We experienced continued improvement in our financial and operational performance in the first quarter of fiscal 2025. Revenue
of $145.5 million (ZAR 2.6 billion) was at the mid-point of our revenue guidance and compares to $136.1 million (ZAR 2.5 billion)
in 2024.
Operating loss of $0.05 million (ZAR 0.3 million) includes the impact of $1.7 million (ZAR 30.0 million) one-off Adumo
transaction costs. We reported a net loss attributable to the company of $4.5 million (ZAR 81.0 million) during the first quarter of
fiscal 2025 compared with a net loss of $5.7 million (ZAR 105.6 million) during the first quarter of fiscal 2024.
Group Adjusted EBITDA of $9.4 million (ZAR 168.1 million) was at the mid-point of our guidance range, representing the ninth
successive quarter of Lesaka achieving or outperforming its Group Adjusted EBITDA guidance. Group Adjusted EBITDA is a non-
GAAP measure, refer to reconciliation below at “—Results of Operations —Use of Non-GAAP Measures”.
We continue to broaden our product proposition and solve for both consumer and merchant pain-points.
Merchant Division
The year-on-year performance in our Merchant Division (“Merchant”) is supported by the robust secular trends underpinning
financial inclusion, cash management and digitalization to empower micro-merchants, merchants and enterprise clients to transact
efficiently and fulfill their potential.
Performance in Merchant has been driven by:
Our VAS and supplier payments business continues to see adoption by micro -merchants.
Fiscal quarter ended September 30,
Q1
2025
Q1
2024
Q1
2023
2025
vs.
2024
2 year
CAGR
Approximate number of devices in deployment
1
89,040
77,000
57,000
16%
25%
Total Throughput for the quarter (ZAR billions)
9.9
7.2
5.9
38%
30%
Throughput for the quarter international money transfers
(“IMT”) (ZAR billions)
1.3
0.3
1.6
333%
(10%)
Throughput for the quarter supplier payments (ZAR billions)
3.2
2
0.6
60%
131%
Total throughput for the quarter excluding IMT and supplier
payments (ZAR billions)
5.4
4.9
3.7
10%
21%
1.
2025 includes approximately 5,430 devices attributable to the acquisition of Touchsides, effective May 1, 2024, which are
not enabled for VAS and supplier payments on the Kazang platform.
We had approximately 89,040 devices deployed at September 30, 2024, representing a 16% year-on-year growth
compared to approximately 77,000 devices as of September 30, 2023, and a 2-year CAGR of 25% compared to
September 30, 2022. This includes approximately 5,430 devices in Touchsides sites that are not yet enabled for VAS
and supplier payments on the Kazang platform.
Core to our device placement strategy is the decision to focus on quality business and optimizing our existing fleet,
which is reflected in a healthy throughput growth and margin per device.
VAS and supplier payments throughput increased 38% to R9.9 billion. We have separately disclosed supplier payments
from traditional VAS as it is becoming a material contributor to our throughput and attracts a lower gross profit margin.
Supplier payments is an important part of the micro -merchant ecosystem we are developing as part of our strategy to
provide a holistic offering to micro-merchants in informal markets.
VAS throughput, excluding IMT and supplier payments increased 10% to R5.4 billion. Our supplier payments
throughput increased by 60% year on year to R3.2 billion as we added further suppliers onto our platform. The
international money transfer throughput recovered significantly and is approaching the levels from quarter one fiscal
Our card acceptance solutions to micro-merchants is through Kazang Pay and to merchants through Card Connect.
Fiscal quarter ended September 30,
Q1
2025
Q1
2024
Q1
2023
2025 vs.
2024
2 year
CAGR
Approximate number of devices in deployment
1
53,450
46,600
27,700
15%
39%
Total Throughput for the quarter (ZAR billions)
4.3
3.6
2.3
18%
36%
The trend towards digital payments continued year on year with a 15% increase in devices and a 18% increase in
throughput to R4.2 billion for the quarter
Our lending
solutions offered to merchants through Capital Connect in the merchant market.
Fiscal quarter ended September 30,
Q1
2025
Q1
2024
Q1
2023
2025
vs.
2024
2 year
CAGR
Total credit disbursed (ZAR millions)
166
196
226
(15%)
(14%)
Total net loan book size at period end
(ZAR millions)
273
285
274
(4%)
0%
Capital Connect credit disbursed
(ZAR millions)
166
173
190
(4%)
(7%)
Capital Connect loan book size at period end (ZAR
millions)
273
280
254
(3%)
4%
Kazang Pay Advance credit disbursed
(ZAR millions)
0
23
36
n/m
n/m
Kazang Pay Advance loan book size at period end (ZAR
millions)
0
5
20
n/m
n/m
Capital Connect disbursed ZAR 166 million during Q1 2025, compared to ZAR 173 million in the comparable period
last year, representing a 4% decrease, reflective of the deterioration in financial strength of our merchants compared to
a year ago. We have maintained our strict credit criteria during the high interest rate and inflationary cycle resulting in
less merchants qualifying for new or renewals of credit lines.
With a more positive political environment, the suspension of load-shedding and hopefully the start of an interest rate
down cycle, we are more optimistic this business can resume a growth trend reflective in the 8% increase in Capital
Connect disbursements this quarter compared to ZAR 154 million a quarter ago (quarter four fiscal 2024.)
Capital Connect’s lending proposition is an important component in enabling the merchants we serve to compete and
grow. Since inception, Capital Connect has distributed more than ZAR 3 billion of funding to merchants and can provide
funding of up to ZAR 5 million in under 24 hours. Quick access to affordable and flexible opportunity capital is vital in
every stage of a merchant’s lifecycle, enabling them to never miss an opportunity.
Kazang Pay Advance, our lending offering in the micro-merchant sector, was suspended in early fiscal 2024 following
the decision to discontinue the current product, especially in the high interest rate environment. We continued to explore
other options with respect to this offering with it now in live pilot phase. We are monitoring payment behavior on a
smaller loan book and applying stricter lending criteria before the official relaunch later in fiscal 2025.
Our cash management and digitalization
solutions effectively “puts the bank” in approximately 4,480 merchants’ stores.
Fiscal quarter ended September 30,
Q1 2025
Q1 2024
Q1 2023
2025 vs.
2024
2 year
CAGR %
Approximate number of devices in deployment
1
4,480
4,400
4,200
2%
3%
Cash settlements (throughput) for the quarter (ZAR
billions)
28.7
27.6
27.5
4%
2%
o
Our cash business remains a vital product in our merchant offering and is a key differentiator for us in the
digitalization of cash. We provide robust cash vaults in the SME sector (Cash Connect) and are building a presence
in the micro-merchant sector (Kazang Vaults), which enables our merchant customer base to significantly mitigate
their operational risks pertaining to cash management and security.
o
Whilst there is trend towards digital payments, cash remains as the most significant portion of retail transactions
especially in informal markets. This business is primarily exposed to the mid-market SMEs, a sector which has
experienced challenges such as power outages, high price inflation and a slowdown in consumer spending, over the
past 24 months. This impacted the merchants we serve in this sector and resulted in increased bankruptcies and vault
upliftments which affected the net growth in the vault estate.
Consumer Division
In our Consumer Division we offer transactional accounts (banking), insurance, lending and payments solutions designed to
improve the lives of historically underserviced consumers and continue to deliver against our strategic focus areas underpinning our
growth strategy. Progress made on these levers: (i) growing active EasyPay Everywhere (“EPE”) account numbers; (ii) increasing
average revenue per user (“ARPU”) through cross-selling; (iii) cost optimization; and (iv) enhancing our product and service offering,
resulted in revenue and profitability growth in the Consumer Division in the first quarter of fiscal 2025.
Consumer
Fiscal quarter ended September 30,
Q1 2025
Q1 2024
Q1 2023
2025 vs.
2024
Transactional accounts (banking) - EasyPay Everywhere ("EPE")
Total active EPE transactional account base at quarter
end (millions)
1.5
1.3
1.2
14%
Total active EPE transactional account base at quarter
end - Permanent grant recipients (millions)
1.3
1.1
1.1
18%
Approximate Gross EPE account activations for the
quarter -Permanent grant recipients (number)
62,000
76,000
45,000
(19%)
Approximate Net EPE account activations for the
quarter - Permanent grant recipients (number)
26,000
42,000
3,000
(39%)
Lending - EasyPay Loans
Approximate number of loans originated during the
quarter (number)
286,000
222,000
198,000
28%
Gross advances in the quarter (ZAR millions)
451
353
289
28%
Loan book size, before allowances, at quarter end
1
(ZAR millions)
564
423
351
34%
Insurance - EasyPay Insurance
Approximate number of insurance policies written in
the quarter (number)
49,000
38,000
25,000
29%
Total active insurance policies on book at quarter end
(number)
466,000
359,000
268,000
30%
Average revenue per customer per month, as of
September 30, (permanent grant beneficiaries)
(ZAR)
91
83
71
10%
1.
Gross loan book, before provisions.
Driving customer acquisition
o
Gross EPE account activations, continue to grow at the new levels for the permanent base, post our marketing and
distribution network enhancements in fiscal 2024. We achieved approximately 62,000 gross account activations in
the quarter which was pleasing in a traditionally quiet quarter for us. This compares to a higher than usual activation
rate in quarter one fiscal 2024 due to significant migration away from the South African Post Office in that quarter
driven by concerns around its going concern status and its failure to timeously distribute grants timeously. Net
activations of 26,000 in the quarter was negatively impacted by the closure of the SASSA (
South African Social
Security Agency)
digital portal for switching.
o
Our total active EPE transactional account base stood at approximately 1.5 million at the end of September 2024, of
which approximately 1.3 million (or approximately 88%) are permanent grant recipients. The balance comprises
Social Relief of Distress (“SRD”) grant recipients, which was introduced during the COVID pandemic and extended
in calendar year 2023.
o
Our priority is to grow our permanent grant recipient customers base, where we can build deeper relationships by
offering products such as insurance and lending. We do not offer the same breadth of service to the SRD grant base
due to the temporary nature of the grant.
Progress on cross selling
EasyPay Loans
o
We originated approximately 286 000 loans during the quarter, with our consumer loan book, before allowances
(“gross book”), increasing 34% to ZAR 564 million as of September 30, 2024, compared to ZAR 423 million as of
September 30, 2023.
o
We have not amended our credit scoring or other lending criteria, and the growth is reflective of the demand for our
tailored loan product for this market, growth in EPE bank account customer base and improved cross-selling
capabilities.
o
The loan conversion rate continues to improve following the implementation of a number of targeted Consumer
lending campaigns and encouraging results from our digital channels.
o
The portfolio loss ratio of approximately 6%, calculated as the loans written off over the last 12 months as a
percentage of the total gross loan book at the end of the quarter, remained stable on an annualized basis, compared
to quarter one fiscal 2024.
EasyPay Insurance
o
Our insurance product sales continue to grow and is a material contributor to the improvement in our overall ARPU.
We have been able to improve customer penetration to 34% of our active permanent grant account base as of
September 30, 2024, compared to 31% as of September 30, 2023. Approximately 49,000 new policies were written
in the quarter, compared to approximately 38,000 in the comparable period in fiscal 2024. The total number of active
policies has grown 30% to approximately 466,000 policies as of September 30, 2024, compared to 359,000 policies
as of September 30, 2023.
o
In April 2024 we launched a new benefit where existing policyholders and new clients could elect to cover up to six
of their dependent family members with cover ranging from ZAR 5 000 to ZAR 30 000. Since the launch of this
benefit more than 25 00 clients have elected to cover their dependent family members.
ARPU
o
ARPU for our permanent client base has increased to approximately ZAR 91 for the first quarter of fiscal 2025, from
approximately ZAR 83 in the first quarter of fiscal 2024.
Adumo Payouts
o
On 1 October the Adumo Payouts business officially became part of the Consumer Division. We are looking forward
to working with them as we build out the Consumer offering beyond the grant recipient space. The Adumo
contribution will be reflected in our quarter two fiscal 2025 results.
Board and Leadership Changes in quarter one fiscal 2025
Leadership changes
On October, 1 2024 Dan Smith was appointed as Group Chief Financial Officer taking over these responsibilities from Naeem
Kola, who transitioned to Group Chief Operating Officer. Mr. Smith was also appointed to the Board. As Lesaka scales, we will
continue to augment our executive capability to accommodate the growing size of the business and deliver on the opportunity in front
of us.
Paul Kent, the CEO of Adumo, joined the Lesaka executive team on completion of the Adumo transaction to oversee the
Merchant pillar within Lesaka’s Merchant Division.
Board changes
Similarly, on completion of the Adumo acquisition Dean Sparrow, Group CEO of Crossfin Technology Holdings (RF) (Pty) Ltd,
was appointed to the Board as an independent non-executive director and joined Lesaka’s Capital Allocation Committee.
Chris Meyer and Monde Nkosi, non-executive directors, stepped down as directors of the Board in October 2024.
Acquisition of Adumo
On October 1, 2024, we announced the closing of the Adumo transaction which enhances our platform, adding customers and
products, as well as scale. The completion of this transaction marks the beginning of a new chapter in the Lesaka story. Adumo will
be included in our results for the full second quarter of fiscal 2025.
Going forward Lesaka will be run in four distinct pillars
The Adumo transaction is the catalyst to approach the market with a more customer -centric operating model. From a financial
reporting standpoint, we will continue to maintain the Consumer Division and Merchant Division split however we will present our
KPIs and performance with a more granular breakdown.
Our Consumer segment will remain substantially the same however the perimeter will be expanded to include the Adumo Payouts
business.
In our Merchant segment, the Adumo transaction provides the opportunity to segment the business into three component parts
organized around distinct customers. Micro-Merchant, Merchant and Enterprise.
Micro-merchants are typically sole proprietors, often operating in the informal economy. We address these customers through
the Kazang and Touchsides brands. In South Africa the focus will be to augment the product offering and cross-sell to existing
customers so that we can materially improve the unit economics, as we have been doing. Outside of South Africa, in neighboring
geographies, there are a substantial number of sole traders who have very limited offerings available to them to empower them on
their digital journey. Here we have an opportunity again to expand our total addressable market through wallet growth.
The Merchant pillar is made up of the existing Connect operations, as well as the bulk of Adumo, specifically its merchant
acquiring and processing business and its GAAP hospitality platform. The Connect business has cash and credit as key product
offerings, the Adumo business has merchant acquiring and software at point of sale. Combined the Lesaka offering will be amongst
most comprehensive in the market in meeting the needs of small and medium size businesses in the region.
Our Enterprise segment will focus on large corporates, mobile network operators, banks, governments and municipalities. Our
solutions include a new payment switch, Prism Switch, our Point Of Sale hardware business branded Prism POS (previously known
as NUETS), our bill payments platform EasyPay, as well as a third party vending and security business. As well as serving third party
corporates it will also service some of the technology needs of our other pillars, Consumer, Micro-Merchant and Merchant.
Critical Accounting Policies
Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires
management to make estimates and assumptions about future events that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities. As future events and their effects cannot be determined with absolute certainty, the
determination of estimates requires management’s judgment based on a variety of assumptions and other determinants such as
historical experience, current and expected market conditions and certain scientific evaluation techniques. Critical accounting policies
are those that reflect significant judgments or uncertainties and may potentially result in materially different results under different
assumptions and conditions. We have identified the following critical accounting policies that are described in more detail in our
Annual Report on Form 10-K for the year ended June 30, 2024:
Business Combinations and the Recoverability of Goodwill;
Intangible Assets Acquired Through Acquisitions;
Revenue recognition – principal versus agent considerations;
Valuation of investment in Cell C;
Recoverability of equity securities and equity-accounted investments;
Deferred Taxation;
Stock-based Compensation;
Accounts Receivable and Allowance for Doubtful Accounts Receivable; and
Lending.
Recent accounting pronouncements adopted
Refer to Note 1 to our unaudited condensed consolidated financial statements for a full description of accounting pronouncements
adopted, including the dates of adoption and the effects on our unaudited condensed consolidated financial statements.
Recent accounting pronouncements not yet adopted as of September 30, 2024
Refer to Note 1 to our unaudited condensed consolidated financial statements for a full description of recent accounting
pronouncements not yet adopted as of September 30, 2024, including the expected dates of adoption and effects on our financial
condition, results of operations and cash flows.
Currency Exchange Rate Information
Actual exchange rates
The actual exchange rates for and at the end of the periods presented were as follows:
Table 1
Three months ended
Year ended
September 30,
June 30,
2024
2023
2024
ZAR : $ average exchange rate
17.9601
18.6457
18.7070
Highest ZAR : $ rate during period
18.5100
19.2202
19.4568
Lowest ZAR : $ rate during period
17.1144
17.6278
17.6278
Rate at end of period
17.1808
18.9236
18.1808
Translation exchange rates for financial reporting purposes
We are required to translate our results of operations from ZAR to U.S. dollars on a monthly basis. Thus, the average rates used
to translate this data for the three months ended September 30, 2024 and 2023, vary slightly from the averages shown in the table
above. Except as described below, the translation rates we use in presenting our results of operations are the rates shown in the
following table:
Three months ended
Year ended
Table 2
September 30,
June 30,
2024
2023
2024
Income and expense items: $1 = ZAR
17.7176
18.7088
18.6844
Balance sheet items: $1 = ZAR
17.1808
18.9236
18.1808
We have translated the results of operations and operating segment information for the three months ended September 30, 2024
and 2023, provided in the tables below using the actual average exchange rates per month (i.e. for each of July 2024, August 2024,
and September 2024 for the first quarter of fiscal 2025) between the USD and ZAR in order to reduce the reconciliation of information
presented to our chief operating decision maker. The impact of using this method compared with the average rate for the quarter and
year to date is not significant, however, it does result in minor differences. We believe that presentation using the average exchange
rates per month compared with the average exchange rate per quarter and year to date improves the accuracy of the information
presented in our external financial reporting and leads to fewer differences between our external reporting measures which are
supplementally presented in ZAR, and our internal management information, which is also presented in ZAR.
Results of Operations
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 results and is the currency in which the majority of our
transactions are initially incurred and measured. Presentation of our reported results in ZAR is a non-GAAP measure. Due to the
significant impact of currency fluctuations between the U.S. dollar and 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.
Our operating segment revenue presented in “—Results of operations by operating segment” represents total revenue per
operating segment before intercompany eliminations. A reconciliation between total operating segment revenue and revenue, as well
as the reconciliation between our segment performance measure and net loss before tax (benefits) expense, is presented in our
unaudited condensed consolidated financial statements in Note 17 to those statements. Our chief operating decision maker is our
Executive Chairman and he evaluates segment performance based on segment earnings before interest, tax, depreciation and
amortization (“EBITDA”), adjusted for items mentioned in the next sentence (“Segment Adjusted EBITDA”) for each operating
segment. We do not allocate once -off items (as defined below), stock-based compensation charges, depreciation and amortization,
impairment of goodwill or other intangible assets, other items (including gains or losses on disposal of investments, fair value
adjustments to equity securities, fair value adjustments to currency options), interest income, interest expense, income tax expense or
loss from equity-accounted investments to our reportable segments. Once-off items represents non-recurring expense items, including
costs related to acquisitions and transactions consummated or ultimately not pursued. The Stock-based compensation adjustments
reflect stock-based compensation expense and are both excluded from the calculation of Segment Adjusted EBITDA and are therefore
reported as reconciling items to reconcile the reportable segments’ Segment Adjusted EBITDA to our loss before income tax expense.
Effective from fiscal 2025, all lease charges are allocated to our operating segments, whereas in fiscal 2024 we presented certain lease
charges on a separate line outside of our operating segments. Prior period information has been re-presented to include the lease
charges which were previously reported on a separate line in our Consumer and Merchant operating segments.
Group Adjusted EBITDA represents Segment Adjusted EBITDA after deducting group costs. Refer also “Results of
Operations—Use of Non-GAAP Measures” below.
We analyze our business and operations in terms of two inter-related but independent operating segments: (1) Merchant Division
and (2) Consumer Division. In addition, corporate activities that are impracticable to allocate directly to the operating segments, as
well as any inter-segment eliminations, are included in Group costs. Inter-segment revenue eliminations are included in Eliminations.
First quarter of fiscal 2025 compared to first quarter of fiscal 2024
The following factors had a significant impact on our results of operations during the first quarter of fiscal 2025 as compared with
the same period in the prior year:
Higher revenue:
Our revenues increased 0% in ZAR, primarily due to an increase in value-added services activity, higher
low margin prepaid airtime sales and processing fees in Merchant, as well as higher transaction, insurance and lending
revenues in Consumer;
Operating income improvement, before transaction costs:
Operating income, before Adumo-related transaction costs,
increased due to an increase trading activity as noted above;
Lower net interest charge:
Net interest charge decreased to $4.4 million (ZAR 79.8 million) from $4.5 million (ZAR 83.1
million) primarily due to lower interest rates on our borrowings, which was partially offset by higher over borrowings; and
Foreign exchange movements:
The U.S. dollar was 5% stronger against the ZAR during the first quarter of fiscal 2025
compared to the prior period, which adversely impacted our U.S. dollar reported results The ZAR was 5% stronger against
the U.S. dollar during first quarter of fiscal 2025 compared to the prior period, which positively impacted our U.S. dollar
reported results.
Consolidated overall results of operations
This discussion is based on the amounts prepared in accordance with U.S. GAAP.
The following tables show the changes in the items comprising our statements of operations, both in U.S. dollars and in ZAR:
Table 3
In United States Dollars
Three months ended September 30,
2024
2023
(As restated)
(A)
(As restated)
(A)
$ ’000
$ ’000
% change
Revenue
153,568
136,089
13%
Cost of goods sold, IT processing, servicing and support
118,909
107,490
11%
Selling, general and administration
26,726
22,515
19%
Depreciation and amortization
6,276
5,856
7%
Transaction costs related to Adumo acquisition
1,702
nm
Operating (loss) income
(45)
228
nm
Reversal of allowance for EMI doubtful debt receivable
250
nm
Interest income
586
449
31%
Interest expense
5,032
4,909
3%
Loss before income tax expense
(4,491)
(3,982)
13%
Income tax expense
78
264
(70%)
Net loss before earnings (loss) from equity-accounted investments
(4,569)
(4,246)
8%
Earnings (Loss) from equity-accounted investments
27
(1,405)
nm
Net loss attributable to us
(4,542)
(5,651)
(20%)
(A) Revenue and cost of goods sold, IT processing, servicing and support for the three months ended September 30, 2024, have been restated
and increased by $8.0 million to correct the misstatements discussed in Note 1 to the unaudited condensed consolidated statement of operations.
Table 4
In South African Rand
Three months ended September 30,
2024
2023
(As restated)
(A)
(As restated)
(A)
ZAR ’000
ZAR ’000
% change
Revenue
2,756,877
2,537,659
9%
Cost of goods sold, IT processing, servicing and support
2,134,828
2,004,465
7%
Selling, general and administration
479,677
419,861
14%
Depreciation and amortization
112,660
109,166
3%
Transaction costs related to Adumo acquisition
29,997
nm
Operating (loss) income
(285)
4,167
nm
Reversal of allowance for EMI doubtful debt receivable
4,741
nm
Interest income
10,517
8,368
26%
Interest expense
90,328
91,429
(1%)
Loss before income tax expense
(80,096)
(74,153)
8%
Income tax expense
1,402
4,825
(71%)
Net loss before earnings (loss) from equity-accounted investments
(81,498)
(78,978)
3%
Earnings (Loss) from equity-accounted investments
475
(26,657)
nm
Net loss attributable to us
(81,023)
(105,635)
(23%)
(A) Revenue and cost of goods sold, IT processing, servicing and support for the three months ended September 30, 2024, have been restated
and increased by ZAR 141.2 million to correct the misstatements discussed in Note 1 to the unaudited condensed consolidated statement of operations.
Revenue increased by $17.5 million (ZAR 219.2 million), or 12.8% (in ZAR, 8.6%), primarily due to an increase in the volume
of value-added services provided (prepaid airtime and gaming), high transactions volumes from our vault and cash management
operations resulting in higher processing fees, an increase in certain issuing fee base prices and transaction activity in our issuing
business, an increase in low margin prepaid airtime sales and an increase in insurance premiums collected and lending revenues
following higher loan originations. Refer to discussion above at “—Recent Developments” for a description of key trends impacting
our revenue this quarter.
Cost of goods sold, IT processing, servicing and support increased by $11.4 million (ZAR 130.4 million) or 10.6% ( 6.5%),
primarily due to the increase in low margin prepaid airtime sales, higher insurance-related claims and third-party transaction fees.
Selling, general and administration expenses increased by $4.2 million (ZAR 59.8 million), or 18.7% (in ZAR 14.2%). The
increase was primarily due to higher employee-related expenses (including annual bonuses and annual salary increases) and higher
stock-based compensation charges; higher consulting, legal and travel expenses, and the year-over-year impact of inflationary
increases on certain expenses.
Depreciation and amortization expense increased by $0.4 million (ZAR 3.5 million), or 7.2% (3.2%). The increase was due to an
increase in depreciation expense related to additional POS devices deployed .
Transaction costs related to Adumo acquisition includes fees paid to external service providers associated with legal and advisory
services procured to close the transaction on October 1, 2024.
Our operating (loss) income margin for the first quarter of fiscal 2025 and 2024 was (0.0)% and 0.2%, respectively. We discuss
the components of operating loss margin under “—Results of operations by operating segment.”
We did not record any changes in the fair value of equity interests in MobiKwik and Cell C during the first quarter of fiscal 2025
or 2024, respectively. We continue to carry our investment in Cell C at $0 (zero). Refer to Note 4 for the methodology and inputs used
in the fair value calculation for Cell C.
Interest on surplus cash increased to $0.6 million (ZAR 10.5 million) from $0.4 million (ZAR 8.4 million), primarily due to
higher overall average cash balances on deposit during the first quarter of fiscal 2025 compared with 2024.
Interest expense increased to $5.0 million from $4.9 million and, in ZAR, decreased to ZAR 90.3 million from ZAR 91.4 million.
In ZAR, the decrease was primarily as a result of lower interest expense incurred on certain of our borrowing for which we were able
to negotiate lower rates of interest towards the end of calendar 2024, which was partially offset by higher overall borrowings during
the first quarter of fiscal 2025 compared with comparable period in the prior quarter.
Fiscal 2025 tax expense was $0.1 million (ZAR 1.4 million) compared to $0.3 million (ZAR 4.8 million) in fiscal 2024. Our
effective tax rate for fiscal 2025 was impacted by the tax expense recorded by our profitable South African operations, a deferred tax
benefit related to acquisition-related intangible asset amortization, non-deductible expenses (in transaction-related expenses), the on-
going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred
tax assets recognized regarding net operating losses incurred by these entities.
Our effective tax rate for fiscal 2024 was impacted by the tax expense recorded by our profitable South African operations, a
deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, the on-going losses incurred
by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized
regarding net operating losses incurred by these entities.
Finbond is listed on the Johannesburg Stock Exchange and reports its six-month results during our first quarter and its annual
results during our fourth quarter. We sold our entire remaining interest in Finbond during the first quarter of fiscal 2024. The table
below presents the relative (loss) earnings from our equity-accounted investments:
Table 5
Three months ended September 30,
2024
2023
$ ’000
$ ’000
change
Finbond
(1,445)
nm
Share of net loss
(278)
nm
Impairment
(1,167)
nm
Other
27
40
(33%)
Total income (loss) from equity-accounted investments
27
(1,405)
nm
Results of operations by operating segment
The composition of revenue and the contributions of our business activities to operating loss are illustrated below:
Table 6
In United States Dollars
Three months ended September 30,
2024
(As
restated)
(A)
% of total
2023
% of
(As
restated)
(A)
(As restated)
(A)
Operating Segment
$ ’000
$ ’000
total
% change
Consolidated revenue:
Merchant
(A)
133,283
86%
121,361
89%
10%
Consumer
21,072
14%
15,580
11%
35%
Subtotal: Operating segments
154,355
100%
136,941
100%
13%
Eliminations
(787)
(852)
(8%)
Total consolidated revenue
(A)
153,568
100%
136,089
100%
13%
Group Adjusted EBITDA:
Merchant
(1)(2)
7,916
84%
7,725
96%
2%
Consumer
(1)(2)
4,396
47%
2,120
26%
107%
Group costs
(2,949)
(31%)
(1,822)
(22%)
62%
Group Adjusted EBITDA (non-GAAP)
9,363
100%
8,023
100%
17%
(A) Revenue has been restated and increased by $8.0 million to correct the misstatements discussed in Note 1 to the unaudited
condensed consolidated statement of operations.
(1) Segment Adjusted EBITDA Merchant and Segment Adjusted EBITDA Consumer include retrenchment costs of $0.01
million and $0.06 million, respectively, for the first quarter of fiscal 2025.
(2) Lease expenses which were previously presented on a separately line in fiscal 2024 are now included in Merchant and
Consumer Segment Adjusted EBITDA. The prior period has been re-presented to conform with current period presentation. See also
“—Results of Operations— Presentation of Merchant and Consumer by segment for fiscal 2024 and 2023 including lease charges”.
(3) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non-
GAAP Measures”.
Table 7
In South African Rand
Three months ended September 30,
2024
% of
2023
% of
(As
restated)
(A)
(As restated)
(A)
Operating Segment
ZAR ’000
total
ZAR ’000
total
% change
Consolidated revenue:
Merchant
(A)
2,393,012
87%
2,263,001
89%
6%
Consumer
378,063
14%
290,629
11%
30%
Subtotal: Operating segments
2,771,075
101%
2,553,630
100%
9%
Eliminations
(14,198)
(1%)
(15,971)
(11%)
Total consolidated revenue
(A)
2,756,877
100%
2,537,659
100%
9%
Group Adjusted EBITDA:
Merchant
(1)(2)
142,078
84%
143,910
96%
(1%)
Consumer
(1)(2)
78,681
47%
39,612
26%
99%
Group costs
(52,654)
(31%)
(33,980)
(22%)
55%
Group Adjusted EBITDA (non-GAAP)
168,105
100%
149,542
100%
12%
(A) Revenue has been restated and increased by ZAR 141.2 million to correct the misstatements discussed in Note 1 to the
unaudited condensed consolidated statement of operations.
(1) Segment Adjusted EBITDA Merchant and Segment Adjusted EBITDA Consumer include retrenchment costs of ZAR 0.2
million and ZAR 1.1 million, respectively, for the first quarter of fiscal 2025.
(2) Lease expenses which were previously presented on a separately line in fiscal 2024 are now included in Merchant and
Consumer Segment Adjusted EBITDA. The prior period has been re-presented to conform with current period presentation.
(3) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non-
GAAP Measures”.
Merchant
Segment revenue primarily increased due to a higher volume of value-added services provided (prepaid airtime and gaming),
higher low margin prepaid airtime sales and high transactions volumes from our vault and cash management operations resulting in
higher processing fees. In ZAR, the modest decrease in Segment Adjusted EBITDA is primarily due higher operating expenses
incurred, especially employment-related expenditures, to expand our offering, which was partially offset by higher gross margin
(calculated as revenue less cost of goods sold, IT processing, servicing and support).
We
record a significant proportion of our airtime
sales in revenue (see further below) and cost of sales, while only earning a relatively small margin. This significantly depresses the
Segment Adjusted EBITDA margins shown by the business.
Our Segment Adjusted EBITDA margin (calculated as Segment Adjusted EBITDA divided by revenue) for the first quarter of
fiscal 2025 and 2024 was 5.9% and 6.4%, respectively.
Prepaid airtime sales
In South Africa and other countries, mobile network operators (“MNOs”) offer prepaid or contract (or postpaid) services to their
customers to telephony services using a mobile telephony network or networks. MNOs also offer similar products (prepaid or postpaid)
for mobile data which uses other wireless network protocols such as wireless fidelity (“wifi”). We use the term “prepaid airtime” to
include both of these prepaid products.
Generally speaking, the difference between the two models is that prepaid is paid for upfront by the customer and contract is paid
in arrears. MNOs sell prepaid products directly to their customers and also indirectly to their customers through distribution channels
(which include wholesalers, retailers and other parties, including ourselves).
We sell a variety of products through our distribution channels, including prepaid airtime, prepaid electricity, gaming vouchers.
We refer to these products collectively as VAS.
In order to “load” airtime onto a mobile device an MNOs customer requires a prepaid airtime voucher. A unique code is assigned
to each prepaid airtime voucher and is required to activate the prepaid airtime on a mobile device. Like certain tangible goods, once
sold, our customers cannot return prepaid airtime vouchers to us (except of course if there is a defect in the service provided by us,
which rarely occurs).
We can either purchase an agreed quantity of prepaid airtime vouchers upfront directly from wholesalers or other parties (so
called “Pinned airtime” - these electronic vouchers are stored on a server owned and maintained by us and we treat these vouchers as
inventory) or we can “interface” directly into a wholesaler and deliver the airtime voucher directly to our customers (typically
merchants) as the airtime is sold by the merchant to MNOs customers (so called Pinless airtime).
Consumer
Segment revenue increased primarily due to higher transaction fees generated from the higher EPE account holders base, an
increase in certain issuing fee base prices and transaction activity in our issuing business, insurance premiums collected and lending
revenues following an increase in loan originations. This increase in revenue has translated into improved profitability, which was
partially offset by higher insurance-related claims and interest expenses (of approximately ZAR 15.0 million) incurred to fund our
lending book and the year-over-year impact of inflationary increases on certain expenses.
We
intend to obtain a separate lending
facility to fund a portion of our lending during fiscal 2025.
We
expected to have this facility in place on July 1, 2024, however, we
have been unable to finalize terms as the separate lending facility will form part of a broader financing package. Therefore, we have
included an intercompany interest expense in our Consumer Segment Adjusted EBITDA for the first quarter of fiscal 2025.
Our Segment Adjusted EBITDA margin for the first quarter of fiscal 2025 and 2024 was 20.9% and 13.6%, respectively.
Group costs
Our group costs primarily include employee related costs in relation to employees specifically hired for group roles and costs
related directly to managing the US-listed entity; expenditures related to compliance with the Sarbanes-Oxley Act of 2002; non-
employee directors’ fees; legal fees; group and US-listed related audit fees; and directors’ and officers’ insurance premiums.
Our group costs for fiscal 2025 increased compared with the prior period due to higher employee costs resulting from an increase
in the number of individuals allocated to group costs and base salary adjustments, higher bonus expense, travel, consulting and legal
fees.
Presentation of Merchant and Consumer by segment for fiscal 2024 and 2023 including lease charges
The tables below present Merchant and Consumer EBITDA for fiscal 2024 and 2023, including lease charges, as well as the
U.S. dollar/ ZAR exchange rates applicable per fiscal quarter and year:
Table 8
Fiscal 2024
In United States dollars
Quarter 1
Quarter 2
Quarter 3
Quarter 4
F2024
$ ’000
$ ’000
$ ’000
$ ’000
$ ’000
Group Adjusted EBITDA:
Merchant
7,725
8,388
8,145
7,843
32,101
Consumer
2,120
2,575
3,757
4,227
12,679
Group costs
(1,822)
(2,011)
(2,199)
(1,812)
(7,844)
Group Adjusted EBITDA (non-GAAP)
8,023
8,952
9,703
10,258
36,936
Income and expense items: $1 = ZAR
18.71
18.71
18.88
18.47
18.68
Table 9
Fiscal 2023
In United States dollars
Quarter 1
Quarter 2
Quarter 3
Quarter 4
F2023
$ ’000
$ ’000
$ ’000
$ ’000
$ ’000
Group Adjusted EBITDA:
Merchant
7,580
8,780
7,980
7,924
32,264
Consumer
(1,893)
171
1,263
2,134
1,675
Group costs
(2,300)
(2,256)
(2,293)
(2,260)
(9,109)
Group Adjusted EBITDA (non-GAAP)
3,387
6,695
6,950
7,798
24,830
Income and expense items: $1 = ZAR
17.13
17.52
17.93
18.74
17.94
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 Group Adjusted EBITDA
is a non-GAAP measure. We provide this non-GAAP measure to enhance our evaluation and understanding of our financial
performance and trends. We believe that this measure is helpful to users of our financial information understand key operating
performance and trends in our business because it excludes certain non-cash expenses (including depreciation and amortization and
stock-based compensation charges) and income and expenses that we consider once-off in nature.
Non-GAAP Measures
Group Adjusted EBITDA is earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for non-
operational transactions (including loss on disposal of equity-accounted investments, gain related to fair value adjustments to currency
options), (earnings) loss from equity-accounted investments, stock-based compensation charges and once-off items. Once-off items
represents non-recurring income and expense items, including costs related to acquisitions and transactions consummated or ultimately
not pursued.
The table below presents the reconciliation between GAAP net loss attributable to Lesaka to Group Adjusted EBITDA:
Table 10
Three months ended
September 30,
2024
2023
$ ’000
$ ’000
Loss attributable to Lesaka - GAAP
(4,542)
(5,651)
(Earnings) loss from equity accounted investments
(27)
1,405
Net loss before (earnings) loss from equity-accounted investments
(4,569)
(4,246)
Income tax expense
78
264
Loss before income tax expense
(4,491)
(3,982)
Interest expense
5,032
4,909
Interest income
(586)
(449)
Reversal of allowance for doubtful EMI loan receivable
(250)
Operating income (loss)
(45)
228
PPA amortization (amortization of acquired intangible assets)
3,747
3,608
Depreciation and amortization
2,529
2,248
Stock-based compensation charges
2,377
1,759
Interest adjustment
(831)
Once-off items
(1)
1,805
78
Unrealized (gain) loss FV for currency adjustments
(219)
102
Group Adjusted EBITDA - Non-GAAP
9,363
8,023
(1) The table below presents the components of once-off items for the periods presented:
Table 11
Three months ended
September 30,
2024
2023
$ ’000
$ ’000
Transaction costs
103
78
Transaction costs related to Adumo acquisition
1,702
Total once-off items
1,805
78
Once-off items are non-recurring in nature, however, certain items may be reported in multiple quarters. For instance, transaction
costs include costs incurred related to acquisitions and transactions consummated or ultimately not pursued. The transactions can span
multiple quarters, for instance in fiscal 2025 we incurred significant transaction costs related to the acquisition of Adumo over a
number of quarters, and the transactions are generally non-recurring.
Liquidity and Capital Resources
As of September 30, 2024, our cash and cash equivalents were $49.7 million and comprised of U.S. dollar-denominated balances
of $2.0 million, ZAR-denominated balances of ZAR 791.0 million ($46.0 million), and other currency deposits, primarily Botswana
pula, of $1.7 million, all amounts translated at exchange rates applicable as of September 30, 2024. The decrease in our unrestricted
cash balances from June 30, 2024, was primarily due to the utilization of cash reserves to fund certain scheduled and other repayments
of our borrowings, purchase ATMs and vaults, pay annual bonuses, pay for expenses included in our group costs, and to make an
investment in working capital, which was partially offset by positive contribution from our Merchant and Consumer operations and
utilization.
We generally invest any surplus cash held by our South African operations in overnight call accounts that we maintain at South
African banking institutions, and any surplus cash held by our non-South African companies in U.S. dollar-denominated money market
accounts.
Historically, we have financed most of our operations, research and development, working capital, and capital expenditures, as
well as acquisitions and strategic investments, through internally generated cash and our financing facilities. When considering
whether to borrow under our financing facilities, we consider the cost of capital, cost of financing, opportunity cost of utilizing surplus
cash and availability of tax efficient structures to moderate financing costs. For instance, in fiscal 2022, we obtained loan facilities
from RMB to fund a portion of our acquisition of Connect. Following the acquisition of Connect, we now utilize a combination of
short and long-term facilities to fund our operating activities and a long-term asset-backed facility to fund the acquisition of POS
devices and vaults. Refer to Note 12 to our consolidated financial statements for the year ended June 30, 2024, for additional
information related to our borrowings.
Available short-term borrowings
Summarized below are our short-term facilities available and utilized as of September 30, 2024:
Table 12
RMB Facility E
RMB Indirect
RMB Connect
Nedbank
$ ’000
ZAR ’000
$ ’000
ZAR ’000
$ ’000
ZAR ’000
$ ’000
ZAR ’000
Total short-term facilities
available, comprising:
Overdraft
9,895
170,000
Overdraft restricted as to
use
(1)
52,384
900,000
Total overdraft
52,384
900,000
9,895
170,000
Indirect and derivative
facilities
(2)
7,858
135,000
9,112
156,556
Total short-term
facilities available
52,384
900,000
7,858
135,000
9,895
170,000
9,112
156,556
Utilized short-term
facilities:
Overdraft
9,895
170,000
Indirect and derivative
facilities
(2)
1,927
33,100
123
2,110
Total short-term
facilities available
1,927
33,100
9,895
170,000
123
2,110
Interest rate, based on
South African prime rate
11.50%
11.40%
(1) Overdraft may only be used to fund ATMs and upon utilization is considered restricted cash. We did not utilize this facility
at the end of September 2024, and expect to cancel the facility in the second quarter of fiscal 2025.
(2) Indirect and derivative facilities may only be used for guarantees, letters of credit and forward exchange contracts to support
guarantees issued by RMB and Nedbank to various third parties on our behalf.
Long-term borrowings
We have aggregate long-term borrowing outstanding of ZAR 2.6 billion ($148.5 million translated at exchange rates as of
September 30, 2024) as described in Note 8. These borrowings include outstanding long-term borrowings obtained by Lesaka SA of
ZAR 1.0 billion, including accrued interest, which was used to partially fund the acquisition of Connect. The Lesaka SA borrowing
arrangements were amended in March 2023 to include a ZAR 200 million revolving credit facility. We have settled all drawn amounts
in full as of September 30, 2024, with the full balance available for utilization in the future. In contemplation of the Connect transaction,
Connect obtained total facilities of ZAR 1.3 billion, which were utilized to repay its existing borrowings, to fund a portion of its capital
expenditures and to settle obligations under the transaction documents, and which has subsequently been upsized for its operational
requirements and has an outstanding balance as of September 30, 2024, of ZAR 1.2 billion, We also have a revolving credit facility,
of ZAR 300.0 million which is utilized to fund a portion of our merchant finance loans receivable book.
On September 30, 2024, we obtained a ZAR 665.0 million funding facility from RMB which has been used on October 1, 2024
to (i) settle an amount of ZAR 232.2 million due to the Adumo sellers; (ii) pay ZAR 207.2 million to acquire 2,601,410 shares of our
common stock from one of the Adumo sellers’ indirect shareholders; (iii) pay ZAR 147.5 million notified by Investec Bank Limited
to Adumo and us as a result of the acquisition, (iv) pay an origination fee of ZAR 7.6 million to RMB and (v) pay ZAR 70.0 million
of transaction-related expenses.
Restricted cash
As of September 30, 2024, we had credit facilities with RMB in order to access cash to fund our ATMs in South Africa. Utilization
of this facility is included in our cash, cash equivalents and restricted cash presented in our consolidated statement of cash flows. We
did not utilize the facility at the end of September 2024. Any cash drawn under the facility may only be used to fund ATMs and is
considered restricted as to use and therefore is classified as restricted cash on our consolidated balance sheet.
We have also entered into cession and pledge agreements with Nedbank related to our Nedbank indirect credit facilities and we
have ceded and pledged certain bank accounts to Nedbank. The funds included in these bank accounts are restricted as they may not
be withdrawn without the express permission of Nedbank. Our cash, cash equivalents and restricted cash presented in our consolidated
statement of cash flows as of September 30, 2024, includes restricted cash of $0.1 million that has been ceded and pledged.
Arrangement with African Bank to fund our ATMs
In September 2024, we entered into an arrangement with African Bank Limited (“African Bank”) and certain cash-in-transit
service providers to fund our ATMs. Under this arrangement, African Bank will use its cash resources to fund our ATMs and it is
specifically recorded that the cash in our ATMs are African Bank’s property. Therefore, as we have not utilized a facility to obtain the
cash, and do not own or control the cash for an extended period of time, we do not record cash or cash equivalents and borrowings in
our consolidated statement of financial position. Cash withdrawn from our ATMs by our EPE customers and other consumers are
settled through the interbank settlement system from the ATM users bank account to African Bank’s bank accounts. We pay African
Bank a monthly fee for the service provided which is calculated based on the cumulative daily outstanding balance of cash utilized
multiplied by the South African prime interest rate less 1%. We are exposed to the risk of cash lost while it is in our ATMs (i.e. from
theft) and are required to repay African Bank for any shortages.
Cash flows from operating activities
First quarter
Net cash used operating activities during the first quarter of fiscal 2025 was $4.1 million (ZAR 73.3 million) compared to net
cash provided by operating activities of $3.4 million (ZAR 63.1 million) during the first quarter of fiscal 2024. Excluding the impact
of income taxes, our cash used in operating activities during the first quarter of fiscal 2025 includes cash utilized for the settlement of
working capital movements within our merchant business related to quarter-end transaction processing activities and which were
settled in the following week (our fourth quarter of fiscal 2024 closed on a Sunday), and the net growth in our consumer and merchant
finance loans receivable books, which was partially offset by was positively impacted by the contribution from Merchant and
Consumer businesses.
We didn’t pay any significant taxes during the first quarter of fiscal 2025. During the first quarter of fiscal 2024, we paid second
provisional South African tax payments of $- million (ZAR - million) related to certain Connect entities’ 2024 tax year that had not
yet been aligned with ours.
Taxes (refunded) paid during the first quarter of fiscal 2025 and 2024 were as follows:
Table 13
Three months ended September 30,
2024
2023
2024
2023
ZAR
ZAR
‘000
‘000
‘000
‘000
Taxation paid related to prior years
572
10,859
Tax refund received
(113)
(31)
(2,053)
(640)
Total South African taxes paid
(113)
541
(2,053)
10,219
Foreign taxes paid
68
63
1,213
1,196
Total tax (refund) paid
(45)
604
(840)
11,415
Cash flows from investing activities
First quarter
Cash used in investing activities for the first quarter of fiscal 2025 included capital expenditures of $4.0 million (ZAR 70.3
million), primarily due to the acquisition of vaults and POS devices .
Cash used in investing activities for the first quarter of fiscal 2024 included capital expenditures of $2.8 million (ZAR 52.6
million), primarily due to the acquisition of vaults.
Cash flows from financing activities
First quarter
During the first quarter of fiscal 2025, we utilized $23.9 million from our South African overdraft facilities to fund our ATMs
and our cash management business through Connect, and repaid $31.0 million of those facilities. We utilized $0.8 million of our long-
term borrowings to fund the acquisition of certain capital expenditures and for working capital requirements. We repaid $5.5 million
of long-term borrowings in accordance with our repayment schedule as well as to settle a portion of our revolving credit facility
utilized.
During the first quarter of fiscal 2024, we utilized $59.6 million from our South African overdraft facilities to fund our ATMs
and our cash management business through Connect, and repaid $62.8 million of those facilities. We utilized approximately $2.5
million of our long-term borrowings to fund the acquisition of certain capital expenditures and for working capital requirements. We
repaid approximately $2.6 million of long-term borrowings in accordance with our repayment schedule as well as to settle a portion
of our revolving credit facility utilized.
Off-Balance Sheet Arrangements
We have no off -balance sheet arrangements.
Capital Expenditures
We expect capital spending for the second quarter of fiscal 2025 to primarily include spending for acquisition of POS devices,
vaults, computer software, computer and office equipment, as well as for our ATM infrastructure and branch network in South Africa.
Our capital expenditures for the first quarter of fiscal 2025 and 2024 are discussed under “—Liquidity and Capital Resources —Cash
flows from investing activities.” All of our capital expenditures for the past three fiscal years were funded through internally generated
funds, or, following the Connect acquisition, our asset-backed borrowing arrangement. We had outstanding capital commitments as
of September 30, 2024, of $0.3 million. We expect to fund these expenditures through internally generated funds and available
facilities.
Market risk
As filed, 1,242 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
In addition to the tables below, see Note 4 to the unaudited condensed consolidated financial statements for a discussion of
market risk.
We have short and long-term borrowings in South Africa which attract interest at rates that fluctuate based on changes in the
South African prime and 3-month JIBAR interest rates. The following table illustrates the effect on our annual expected interest charge,
translated at exchange rates applicable as of September 30, 2024, as a result of changes in the South African prime and 3-month JIBAR
interest rates, using our outstanding short and long-term borrowings as of September 30, 2024. The effect of a hypothetical 1% (i.e.
100 basis points) increase and a 1% decrease in the interest rates applicable to the borrowings as of September 30, 2024, are shown.
The selected 1% hypothetical change does not reflect what could be considered the best- or worst-case scenarios.
Table 14
As of September 30, 2024
Annual expected
interest charge
($ ’000)
Hypothetical
change in
interest rates
Estimated annual
expected interest
charge after
hypothetical change
in interest rates
($ ’000)
Interest on South African borrowings
19,780
1%
21,367
(1%)
18,190
Controls and procedures
As filed, 11,049 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Under the supervision and with the participation of our management, including our executive chairman and our group chief
financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934, as amended, as of September 30, 2024.
We previously identified and disclosed in Part II, Item 9A of our Annual Report on Form 10-K for the year ended June 30, 2024,
material weaknesses (the “Original Material Weaknesses”) in our internal control over financial reporting related to: (1) information
technology general controls (“ITGCs”), specifically insufficient risk assessment, design and implementation, monitoring activities and
training of individuals to operate controls in the areas of user access and program-change management for certain information
technology systems that support our financial reporting processes and (2) insufficient design and implementation of controls and
associated policies and procedures in our annual goodwill impairment assessment. A material weakness is a deficiency, or combination
of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of
our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
As a result of insufficient time to design, implement and fully test controls to ensure we have remediated the Original Material
Weaknesses discussed in our Annual Report on Form 10-K for our fiscal year ended June 30, 2024 (as described above), the executive
chairman and the group chief financial officer concluded that our disclosure controls and procedures were not effective as of September
30, 2024. due to the Original Material Weaknesses described above.
Subsequent to the date of the Original Filing, including in connection with the restatement, management identified the following
material weaknesses (the “Subsequent Material Weaknesses” and together with the “Original Material Weaknesses”, the “Material
Weaknesses”) in the Company’s internal control over financial reporting:
Our Consumer lending process, specifically insufficient risk assessment and monitoring activities relating to changes in
systems and processes, insufficient controls over internal information and information from service organizations, and
insufficient design and implementation of information technology general controls (“ITGCs”), controls over service
organizations and process level controls, resulting in ineffective process level controls, including a lack of validation of the
completeness and accuracy of information used within the process;
Our payroll process, specifically insufficient risk assessment and monitoring activities relating to changes over the transfer
of ownership to the centralized payroll processes, insufficient controls over information from service organizations, and
insufficient design and implementation of ITGCs, controls over service organizations and process level controls resulting in
ineffective process level controls including a lack of validation of the completeness and accuracy of information used within
this process;
Our annual goodwill impairment process, specifically related to insufficient risk assessment and ineffective design and
implementation of controls resulting in ineffective process level controls;
Our revenue recognition process relating to prepaid airtime sold and processing fees relating to certain agreements,
specifically insufficient risk assessment and ineffective design and implementation of controls related to our judgement over
revenue recognized either as principal versus as agent resulting in ineffective process level controls;
Our journal entry process, specifically relating to insufficient risk assessment, and ineffective design and implementation of
controls including insufficient controls over information resulting in ineffective process level controls including a lack of
validation of the completeness of the journal entry population and a lack of validation of the completeness and accuracy of
information used within the process; and
An insufficient number of experienced and trained resources to execute on their internal control responsibilities resulting in
ineffective design, implementation and operating effectiveness of process level controls for processes in the scope of our
internal control over financial reporting evaluation.
Of the material weaknesses described above, the material weaknesses related to the revenue recognition process resulted in a
material corrected misstatement for the year ended September 30, 2024 and a restatement for each of the quarters ended September
30, 2024, December 31, 2024 and March 31, 2025 of our revenue and cost of goods sold, IT processing, servicing and support,
exclusive of depreciation and amortization. There was no impact on the Company’s reported operating income (loss), net loss or loss
per share in any of such quarters. For further information on the restatement, refer to the section titled "Restatement of Previously
Issued Financial Statements” in Note 1 to the unaudited interim condensed consolidated financial statements as of and for the three
months ended September 30, 2024. included in this Form 10-Q/A.
Of the material weaknesses described above, the material weaknesses related to the annual goodwill impairment process resulted
in a corrected material misstatement and a corrected immaterial misstatement of goodwill and impairment loss in the Company’s
consolidated financial statements for the year ended June 30, 2025 .
Of the material weaknesses described above, the material weaknesses related to the journal entry process resulted in a corrected
immaterial misstatement to our revenue and cost of goods sold, IT processing, servicing and support, exclusive of depreciation and
amortization in the Company’s consolidated financial statements for the year ended June 30, 2025.
Of the material weaknesses described above, the material weakness related to an insufficient number of experienced and trained
resources to execute on their internal control responsibilities also resulted in a corrected material misstatement of current and long-
term borrowings in the Company’s consolidated financial statements for the year ended June 30, 2025.
All other material weaknesses did not result in any corrected material or immaterial misstatements, however a reasonable
possibility exists that material misstatements in the Company’s consolidated financial statements may not be prevented or detected on
a timely basis.
Subsequent to the date of the Original Filing and as a result of the Subsequent Material Weaknesses in the Company's internal
control over financial reporting discussed above, our management, with the participation of our executive chairman and our group
chief financial officer, concluded that, as of September 30, 2024., our disclosure controls and procedures were not effective at the
reasonable assurance level due to the Subsequent Material Weakness described above.
Notwithstanding the previously identified Material Weaknesses, management believes the condensed consolidated financial
statements included in this Quarterly Report on Form 10-Q/A fairly present, in all material respects, our financial condition, results of
operations and cash flows as of and for the periods presented in accordance with GAAP.
Remediation of Subsequent Material Weaknesses
To address the material weaknesses, our management, including our Information Technology (“IT”) team, has commenced with
remediation of these material weaknesses including, but not limited to: (1) developing and implementing a comprehensive remediation
plan that includes specific actions aimed at enhancing the understanding of control owners related to the operation and importance of
internal controls over financial reporting, including the principles and requirements of each control, with a focus on the impacted
processes, including controls over service organizations, ITGCs and other process level controls; (2) mandating improved risk
assessment procedures with governance requirements upon implementing new systems within the Group together with the design,
implementation and monitoring of control activities; (3) the recruitment of additional appropriately skilled resources across the Finance
and Risk and Compliance disciplines coupled with the further upskilling and training of existing resources responsible for the
execution of key controls as well as a focus on a greater degree of automation of controls throughout the organization, (4) the
embedding of controls compliance in the key performance indicators of senior executives across the business and (5) collaborating
closely with internal and external assurance partners to ensure the robustness of our remediation plan.
While we are actively taking steps to implement our remediation plan, the Subsequent Material Weaknesses will not be deemed
resolved until the enhanced controls operate for a sufficient period of time and management has confirmed through testing that the
same are operating effectively. We will continue to monitor the remediation plan's effectiveness and adjust our efforts as needed. As
we assess and test our internal control over financial reporting, we may identify the need for additional measures or modifications to
the plan.
Remediation of Original Material Weaknesses
Management has, however, made progress in remediating the material weaknesses identified in the previous fiscal year related
to the failure of specific ITGCs for certain IT systems to operate effectively as well as the insufficient design and implementation of
controls and policies and procedures related to the goodwill impairment assessment. As a result, controls in the areas of user access
and program-change management for associated IT systems that support our financial reporting processes have been remediated.
Revised procedures have been implemented related to the validation of completeness and accuracy of the data used in the goodwill
impairment model together with additional procedures implemented to enhance the precision levels in evaluating certain assumptions
utilized in this model. Even though the controls for the goodwill impairment process have been strengthened, it has not yet been fully
remediated as model errors persisted.
The remediation plan with respect to the Material Weaknesses may be adjusted as is appropriate, as we continue to evaluate and
enhance our internal control over financial reporting. Other than the design and implementation of the remediation plan, there have
not been any changes in our internal control over financial reporting during the fiscal quarter ended September 30, 2024., that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Risk factors
As filed, 18,111 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
See “Item 1A RISK FACTORS” in Part I of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, for a
discussion of risk factors relating to (i) our business, (ii) operating in South Africa and other foreign markets, (iii) government
regulation, and (iv) our common stock. Except as set forth below, there have been no material changes from the risk factors previously
disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.
We may not be able to successfully integrate Adumo’s operations with our business.
On October 1, 2024, we announced the closing of our ZAR 1.67 billion ($96.2 million) investment to acquire a 100% interest in
Adumo. Integrating these businesses into our company may require significant attention from our senior management which may
divert their attention from our day-to-day business. The difficulties of integration may be increased by cultural differences between
our two organizations and the necessity of retaining and integrating personnel, including Adumo’s key employees and management
team. The services of some of these individuals will be important to the continued growth and success of Adumo’s business and to
our ability to integrate the Adumo business with ours. If we were to lose the services of these key employees or fail to sufficiently
integrate them, our ability to operate these businesses successfully would likely be materially and adversely impacted.
As such, if we are unable to successfully integrate Adumo’s operations into our business we could be required to record material
impairments, and as a result, our financial condition, results of operations, cash flows and stock price could suffer.
We depend upon third-party suppliers, making us vulnerable to supply shortages and price fluctuations, which could harm
our business.
We obtain our smart cards, ATMs, electronic payment and POS devices, components for our safe assets, components to repair
the ISV (independent software vendor) division’s POS hardware, and the other hardware we use in our business from a limited number
of suppliers, and do not manufacture this equipment ourselves. We generally do not have long-term agreements with our manufacturers
or component suppliers. If our suppliers become unwilling or unable to provide us with adequate supplies of parts or products when
we need them, or if they increase their prices, we may not be able to find alternative sources in a timely manner and could be faced
with a critical shortage. This could harm our ability to meet customer demand and cause our revenues to decline. Even if we are able
to secure alternative sources in a timely manner, our costs could increase as a result of supply or geopolitical shocks, which may lead
to an increase in the prices of goods and services from third parties. A supply interruption, such as the recent global shortage of
semiconductors, or an increase in demand beyond current suppliers’ capabilities could harm our ability to distribute our equipment
and thus to acquire new customers who use our technology. Any interruption in the supply of the hardware necessary to operate our
technology, or our inability to obtain substitute equipment at acceptable prices in a timely manner, could impair our ability to meet the
demand of our customers, which would have an adverse effect on our business.
We do not have a South African banking license and, therefore, we provide our EPE solution through an arrangement with
a third-party bank, which limits our control over this business and the economic benefit we derive from it. If this arrangement were
to terminate, we would not be able to operate our EPE business without alternate means of access to a banking license. We are
also required to comply with the requirements of payment schemes, including VISA and Mastercard. Furthermore, we provide
certain of our services under partnerships with South African banks. We will be unable to provide our payments and card-acquiring
businesses if we fail to comply with payment scheme rules, and/or fails to maintain certain regulatory licenses and registrations,
and/ or if we were unable to continue to partner with South African banks to provide our payments and card acquiring services.
The South African retail banking market is highly regulated. Under current law and regulations, our EasyPay Everywhere
(“EPE”) business activities require us to be registered as a bank in South Africa or to have access to an existing banking license. We
are not currently so registered, but we have an agreement with African Bank Limited that enables us to implement our EPE program
in compliance with the relevant laws and regulations. If this agreement were to be terminated, we would not be able to operate these
services unless we were able to obtain access to a banking license through alternate means. Furthermore, we have to comply with the
South African Financial Intelligence Centre Act, 2001 and money laundering and terrorist financing control regulations, when we
open new bank accounts for our customers and when they transact. Failure to effectively implement and monitor responses to the
legislation and regulations may result in significant fines or prosecution of African Bank Limited and ourselves.
We are required to comply with the requirements of payment schemes, including VISA and Mastercard. We have deployed a
significant number of devices, and any mandatory compliance upgrades to our deployed POS devices would require significant capital
expenditures and/or be disruptive to our customer base. Failure to comply with the payment schemes’ rules may result in significant
fines and/or a loss of license to participate in the scheme(s).
We provide payment services to our customers by partnering with some of the largest banks in South Africa. If these agreements
were to be terminated, we would not be able to provide these payment services unless we were able to conclude an agreement with an
alternative bank. In addition, if we were to lose our PASA registrations or fail to have them renewed, we would not be permitted to
provide payment services.
Compliance with the requirements under these various regulatory regimes may cause us to incur significant additional costs and
failure to comply with such requirements could result in the shutdown of the non-complying facility, the imposition of liens, fines
and/or civil or criminal liability.
In addition, the South African Financial Advisory and Intermediary Services Act, 2002, requires persons who act as
intermediaries between financial product suppliers and consumers in South Africa to register as financial service providers. EasyPay
Insurance was granted a Financial Service Provider, or FSP, license on June 9, 2015, and EasyPay Financial Services (Pty) Ltd was
granted a FSP license on July 11, 2017. If our FSP licenses are withdrawn or suspended, we may be stopped from continuing our
financial services businesses in South Africa unless we are able to enter into a representative arrangement with a third party FSP.
Furthermore, the proposed Conduct of Financial Institutions Bill will make significant changes to the current licensing regime
however, the current proposal is that existing licences will be converted. The second draft of the Conduct of Financial Institutions Bill
was published for public comment on September 29, 2020.
Proposed regulatory changes to the national payments system are expected to have a substantial impact on the South African
payments industry. It may change the manner in which we conduct business and may lead to increased operating costs for our
business as we work to ensure compliance with the new legislative and regulatory framework, which may have a material adverse
effect on our business.
On March 3, 2025, the South African Reserve Bank (“SARB”) published certain draft regulatory documents for commentary
that are expected to have a substantial impact on how we conduct our business namely: (i) a draft directive entitled “Directive in
respect of specific payment activities within the national payment system” (the “Directive”); (ii) a draft exemption notice entitled
“Designation by the Prudential Authority of specific activities conducted in the national payment system which shall be deemed not
to constitute ‘the business of a bank’ under paragraph (cc) in section 1(1) of the Banks Act, 1990” (the “Exemption Notice”); and
(iii) the National Payment System Bill (“NPS Bill”), which seeks to replace the existing National Payment System Act, 1998. The
proposed regulations were made available for comment, and we submitted detailed comments to our industry body, Association of
South African Payment Providers, on the proposed regulations.
The key objectives of the proposed regulations are to clarify the mandate and objectives of the SARB with respect to the national
payment system (“NPS”); and establish a robust regulatory, oversight, and supervisory framework for the NPS. The proposed
regulations also aim to promote financial inclusion, competition, the prevention of financial crime, and the fair treatment and protection
of customers, while introducing an activity-based licensing and authorization regime. In this regard, the Directive defines thirteen
“payment activities” and provides that a person, which can be a bank or a non-bank, providing a “payment activity" must obtain
authorisation from the SARB to undertake such activity. Under the Exemption Notice, certain payment activities are exempted from
the definition of ‘the business of a bank’. Prior to the Exemption Notice, these activities could only be undertaken by a bank. Pursuant
to the Exemption Notice, these activities can be undertaken by non-banks, subject to certain conditions. Certain of our businesses,
including EasyPay Everywhere, Adumo and Kazang Pay, currently undertake activities which would qualify as “payment activities”
under the Directive and the NPS Bill. Under the current regulatory framework, these activities are undertaken in partnership with a
sponsoring bank and the sponsoring bank is subject to regulation by the SARB. In other words, the business undertaking the “payment
activity” is not subject to direct regulation with respect to such payment activities.
It is uncertain if and when the proposed regulations will enter into effect and whether a non-bank such as the relevant Lesaka
subsidiary may elect whether to conduct an exempted payment activity by partnering with a bank to do so, or on its own, if it is
authorised by the SARB - i.e. whether both options will be available to a non-bank. Should our businesses be subject to direct regulation
under this new regime (i.e., if our current sponsorship model is no longer available), we expect that we will incur significant operating
costs to comply with the new requirements, and to obtain authorization with respect thereto. Furthermore, while some requirements
may already exist under other current regulatory frameworks for certain of our businesses, we will likely need to invest in additional
resources, systems and processes to satisfy the regulatory requirements contemplated in the proposed regulations, which may also lead
to increased operational costs, which may have a material adverse effect on our business. It is expected that the SARB will publish
revised regulations later in 2025.
We identified material weaknesses in internal control over financial reporting, and determined that they resulted in our
internal control over financial reporting and disclosure controls and procedures not being effective, during the quarter ended
September 30, 2024. If we are not able to remediate these material weaknesses, or we identify additional deficiencies in the future
or otherwise fail to maintain an effective system of internal controls, including disclosure controls and procedures, this could result
in material misstatements of our financial statements or cause us to fail to meet our reporting obligations.
SEC rules define a material weakness as a deficiency, or a combination of control deficiencies, in internal control over financial
reporting such that there is a reasonable possibility that a material misstatement of a registrant’s financial statements will not be
prevented or detected on a timely basis. We are required to annually provide management’s attestation on internal control over financial
reporting. We are also required to disclose significant changes made to our internal control procedures on a quarterly basis and any
material weaknesses identified by our management in our internal control over financial reporting during the course of related
assessments.
Subsequent to the Original Filing, in connection with the restatement, management identified a material weakness in the
Company’s internal control over financial reporting related to its controls over applying technical accounting guidance to nonrecurring
events and transactions, specific to the evaluation of information that was known or knowable at the time of the transaction or event.
Refer to the section titled "Restatement” in Note 1 to the unaudited interim condensed consolidated financial statements as of and for
the three months ended September 30, 2024 included in this Form 10-Q/A. Management determined that such material weakness
resulted in the Company’s internal control over financial reporting and disclosure controls and procedures not being effective as of
September 30, 2024.
Effective internal controls are necessary for us to provide reliable financial statements and prevent or detect fraud. The material
weaknesses in internal control over financial reporting described above, any new deficiencies identified in the future or any deficiencies
in our disclosure controls and procedures, if not timely remediated, could limit our ability to prevent or detect a misstatement of our
accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. We are in the process
of implementing a remediation plan to remediate the material weaknesses we identified, which is designed to improve our internal
control over financial reporting. We can provide no assurance that the measures we have taken to-date and any actions that we may
take in the future will be sufficient to remediate this control deficiency, or that such remediation measures will be effective at
preventing or avoiding potential future significant deficiencies or material weaknesses in our internal controls.
If we identify any new deficiencies in the future or are not able to successfully remediate the material weaknesses we have
identified and related deficiencies in our disclosure controls and procedures, the accuracy and timing of our financial reporting may
be adversely affected, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our
common stock could decline, we could be subject to sanctions or investigations by the SEC, or other regulatory authorities, and we
may not be able to source external financing for our capital needs on acceptable terms or at all. Each of the foregoing items could
adversely affect our business, results of operations, financial condition, and the market price and volatility of our common stock. In
addition, we have expended, and expect to continue to expend, significant resources, including accounting-related costs and significant
management oversight, in order to assess, implement, maintain, remediate and improve the effectiveness of our internal control over
financial reporting and our general control environment.
In addition, as a result of the material weaknesses described above and other matters raised or that may in the future be raised by
the SEC, we face the potential for litigation or other disputes which may include, among others, claims invoking the federal and state
securities laws, contractual claims or other claims arising from the deficiencies in our internal control over financial reporting described
above, the preparation of our financial statements and the restatement described above. Any such litigation or dispute, whether
successful or not, could have a material adverse effect on our business, results of operations, liquidity and financial condition.
The restatement of our prior quarterly financial statements may affect shareholder and investor confidence in us or harm our
reputation, and may subject us to additional risks and uncertainties, including increased costs and the increased possibility of legal
proceedings and regulatory inquiries, sanctions or investigations.
Subsequent to the Original Filing, in connection with the restatement, management identified material weaknesses in the
Company’s internal control over financial reporting, specific to the evaluation of information that was known or knowable at the time
of the transaction or event. Refer to the section titled “Restatement” in Note 1 to the unaudited interim condensed consolidated financial
statements as of and for the three months ended September 30, 2024 included in this Form 10-Q/A.
As a result of the restatement described above, we have incurred, and may continue to incur, unanticipated costs for accounting
and legal fees in connection with, or related to, such restatement. In addition, such restatement could subject us to a number of
additional risks and uncertainties, including the increased possibility of legal proceedings and inquiries, sanctions or investigations by
the SEC or other regulatory authorities. Any of the foregoing may adversely affect our reputation, the accuracy and timing of our
financial reporting, or our business, results of operations, liquidity and financial condition, or cause shareholders, investors and
customers to lose confidence in the accuracy and completeness of our financial reports or cause the market price of our common stock
to decline.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2024-09-30. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Revenue | 3 months2024-07-01 to 2024-09-30 | $153.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months2024-07-01 to 2024-09-30 | $118.9m | us-gaap:CostOfRevenue |
| Selling, general and administrative | 3 months2024-07-01 to 2024-09-30 | $26.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months2024-07-01 to 2024-09-30 | −$45.0k | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months2024-07-01 to 2024-09-30 | $78.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months2024-07-01 to 2024-09-30 | −$4.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months2024-07-01 to 2024-09-30 | −$0.07 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2024-07-01 to 2024-09-30 | −$0.07 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2024-07-01 to 2024-09-30 | 62,265 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months2024-07-01 to 2024-09-30 | −$4.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months2024-07-01 to 2024-09-30 | $4.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Current assets | At period end2024-09-30 | $167.3m | us-gaap:AssetsCurrent |
| Total assets | At period end2024-09-30 | $551.9m | us-gaap:Assets |
| Current liabilities | At period end2024-09-30 | $109.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | At period end2024-09-30 | $288.2m | us-gaap:Liabilities |
| Long-term debt | At period end2024-09-30 | $132.1m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | At period end2024-09-30 | $16.4m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | At period end2024-09-30 | $184.2m | us-gaap:StockholdersEquity |
Source: SEC EDGAR, the filing index for accession 0001562762-25-000239. Last ingested by Listed: Nov 4, 2026, 17:08 ET. Listed shows no prices and gives no investment advice.