Net1 refocuses on SA business


Net1 refocuses on SA business

Published Date: 2020-09-14 | Source: Stephen Gunnion | Author: Stephen Gunnion

Net1 refocuses on SA business

The fintech and payments group says it has begun reinvesting in its SA operations, with demand returning since the lockdown was eased.

Net1 says its focus is firmly on SA following a strategic review of its businesses that resulted in a number of disposals. The fintech and payments group now plans to scale up its local operations so it can return to a sustainable, cash generative business.

Net1 sold Korean payments processor KSNET in January to focus on its payments businesses in emerging economies and its growing fintech operations. The review of its businesses and investments followed the loss of its contract to run the social grant payment system to the SA Post Office. The contract was handled by its Cash Paymaster Services unit. It was also forced to write down its 15% stake in Cell C last year, impairing its investment in the mobile network operator to nil.

The sale of KSNET helped narrow Net1's full-year loss despite the Covid-19 lockdown impeding its ability to acquire new customers. It also waived some fees and was impacted by the suspension of non-essential financial and other services in the initial stages of the lockdown.

The group reported a 9% decline in revenue to $151 million for the year to end-June and its operating loss narrowed to $44.2 million from $135 million last year. While operating costs had reduced significantly, it said it continued to experience operating losses as a result of depressed revenues and challenging trading conditions as a result of the pandemic. Its loss per share narrowed by three quarters to 1.37c while its headline loss shrank to 54c from $3.12 previously. It said its results were also impacted by the weaker rand.

Net1 said CEO Herman Kotzé would step down at the end of the month after 22 years at the company. He will be replaced by Smith as interim CEO until the appointment of a permanent CEO is finalised. Kotzé had agreed to provide consulting services until the end of next May to ensure a smooth transition.

The company's shares didn't trade on Friday, closing unchanged at R53.63.

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