Q4 2020 Net 1 UEPS Technologies Inc Earnings Call
Good day, ladies and gentlemen, and won't come to NIS. One do you eat P. H technologies incorporated fourth full of teaching earnings conference call.
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Thank you Judy.
Welcome to a fourth quarter 2020 earnings call.
With me today is our chairman John Boomer goes up.
Yeah, So Alex Smith.
Non executive director my vendor Rodney.
A press release and supplementary investor presentation are available on our Investor Relations Web site <unk>, our dog not one dot com.
We will be referring to slide presentation during our prepared remarks.
As a reminder, during this call we will be making forward looking statements and I ask you to look at the cautionary language contained in our form 10-K regarding the risks and uncertainties associated with forward looking statements.
In addition, during this call we will be using certain non-GAAP financial measures and we've provided a reconciliation of these measures to the most directly comparable GAAP measures.
We will discuss that results in South African Rand, which is a non-GAAP measure.
We analyze all results of operations at our press release in Rand to assist investors in understanding the underlying trends of our business as you know the company's results can be significantly affected by currency fluctuations between the U.S. dollar and the South African Rand.
We will have a Q any session following our prepared remarks, but with that let me turn the call it a job.
[noise], let's think it through.
Welcome.
To the net one without presentation for that caught up by nature of the ended June safety Twentytwenty.
There's been life Presley's I'm the.
Hi, Matt.
[laughter], taking on the road in July.
The last the last quarter that has been a timely change anything you want.
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That's one welcomed being a static in may.
Unfunny ball.
The muslin Donny and myself.
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[laughter] nation, Oh longstanding badly.
Being well much I'm increasingly broke.
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But market and obviously the pain.
And we take this opportunity to them for their service and that's one over many years.
We have also I stop at least that capital allocation caught me Ti.
I wouldn't be chaired by 24.
Well use that highly accomplished invest in the private and public pockets.
In addition to the what changes.
Well it has anything changed.
And then of course, it I know that you wouldn't be stepping down from the old old.
And then I've spent 22 years with a cool.
Well I'd be off over the next one boy I'd like to extend our yeah. What are we still have met.
His future endeavors.
Oh, I see a cool I like me.
We'll take a little but as interim CEO, Oh, I'm Tito the board finalize this appointment or am I did see.
Green Shockwave enjoying this transition period.
I have also set up the week chairman meeting.
Finally on the same okay, you get into Europe.
We have initiated a especially if you could review process.
The last quarter.
Initially independent review was led by not neatly into static.
Other than that.
We then accomplished invested an open ended up I need to know that you'd business.
During this presentation.
He would have said the key insights from this but basically.
All of this change anything you want it has been driven by the goal last few they'd.
Well shareholder in this deeply undervalued.
Okay, either ginny rather than single event.
But we have taken significant initial steps or whether they use the last quarter.
I am excited to be popped over this ginnie as chairman.
I'll now hand over let's walk you through the Q4 financial and operations Somebody's Novitas, though.
Thank you Jeremy and a good day to everyone.
Everyone is healthy and safe during these unprecedented times.
Well one of a slightly different format today, where I was where I will address some of the operational financial and capital allocation topics.
And then any will discuss our strategy, which was born out of the recently concluded strategic review.
Well, then open up the cool to cure night.
So we don't even I'd like to encourage all these things to Herman.
I'm very grateful for a significant <unk> significant contribution to net one over the years.
During his tenure admit one the company attained a number of significant milestones and he leaves the business well capitalized with a solid platform for growth.
So the cobot 19 pandemic is global in nature.
Given the current mix of our operations the most relevant material impacts from that one.
Experienced in South Africa, and therefore limited parallel was can be drawn between the trends in the U.S. Europe and many other markets and South Africa.
Since the easing of restrictions in South Africa on the first of June 2020. However.
Ability to operate all business has picked up meaningfully.
Continues to be affected by the ongoing impact of the pandemic on the wider economy and the ability and willingness of people to move around South Africa freely.
Despite these disruptions and restrictions I'm proud of our employees you continue to serve our customers. During this unprecedented time.
I'd like to thank them for their tireless efforts.
[noise] the key financial highlights for the fourth quarter 2020.
Right.
In the fourth quarter total revenue was $26 million, which was a 14% decrease year over year.
In South African Rand, excluding the impact of the SASSA implementation fee reversal in the last quarter of 29 team.
The decrease in revenues due to the effect of the cobot pandemic on fulcrum fees and lower financial and value added sales as well as well as lower AD hoc technology sales and lower international processing volumes.
The total quantifiable impact of Cobot 19, when our adjusted EBITDA was 32 million Rand or $1.8 million during the quarter [noise].
[noise] U.S. dollar at 17 28 to the rent in the fourth quarter 2020 appreciated 22% against the South African Rand compared to the fourth quarter of 29 team, which adversely impacted our reported results.
Yearend as opposed to your coverage to between 16 50 in 17 over the past few weeks.
The fourth quarter 2020 fundamental loss per share was 22 cents compared to $3.05, a fundamental especially a year ago.
This compares to the fundamental loss per share in the third quarter of 11 cents.
We reported an adjusted EBITDA loss from continuing operations of $12.2 million due to lower revenue in South Africa fire losses internationally and the effects of the pandemic and a $1.3 million so see inventory write off.
Excluding the net impact will depend demick oneself items adjusted EBITDA loss would have been $9.1 million.
By segment to South African transaction processing reported revenue of $14.2 million in the fourth quarter of Twentytwenty.
9% compared to the fourth quarter 29 team and down 20% from the third quarter 2020 Bucks on a constant currency basis.
Largely due to these things have kind of it on transaction volumes and sees including the two months when we were unable to charge for certain transactions. These during the looked out.
International transaction processing generated revenue from continuing operations of $1.4 million into fourth quarter, Twentytwenty, which was down 12% compared to the fourth quarter 29 team went up 3% versus the third quarter 2020 on a constant currency basis.
The year over year decrease in revenue in the segment was primarily due to an ongoing contraction in international transaction volumes.
Let's see financial inclusion and applied technology segment revenue from continuing operations was $12.6 million.
Down 13% compared to the fourth quarter of 29 team and down 20% compared to the third quarter 2020, largely due to delayed technology sales and the unwinding of the London, but can during the lump them period, given new loan origination was severely curtailed in April and May which resulted in a commensurate reduction in line.
Revenues and profits.
Our cost base in South Africa remains relatively stable.
During the quarter, we paid a 17 and a half million dollar termination fee in cash to cancel option to acquire say, the 35% interest and bank Frick.
Oh, the material nonrecurring items entries into 7 million dollar loss on the deconsolidation of CBS.
Our equity accounted investments generated earnings of $1.1 million in the fourth quarter.
Fiscal 2020 down 33% compared to the prior year due to losses incurred but familiarity v. two in carbon.
At June 30, 2020, we had unrestricted cash of $218 million and no debt.
You asked dollar denominated balances were $171 million.
Out of the title.
Our weighted average share count has remained relatively constant at 57.1 million shares during the fourth quarter of 2020.
Moving on to some operational highlights.
The number of active bank accounts remained relatively stable at a million.
New account originations were also could told in the lump them.
And we have opened approximately 15000, new Finbond bank accounts through June Thirtyth 2020.
Our ATM network utilization declined by about 10% in April and May as our branches were shut down during looked at.
However, we've seen a meaningful recovery starting in June and in August 2020 transactions to a fixed and mobile games were at or near two year highs.
Easy pay switching volumes and prepaid airtime electricity sales were lower in the fourth quarter 2020, as result of the locked down restrictions in April and May before porosity recovering in June 2020.
The less easy pay revenue increased 4% year over year in constant currency as result of bill payment revenue, increasing by around 28% year over year.
Given the trend towards electronic payments and the signing up a new build issues.
As expected our lending book Unwound during April and May as we were unable to originate new business and our revenue from lending activities decreased in the fourth quarter fiscal Twentytwenty as a result.
However, all any book has recovered since restrictions raised the number of new loan originations [noise].
Increased around 500 in April to 30000 in May.
As a result to the new mobile loan origination channel.
And further to in excess of 130000 loans in June 2020.
The loan books finished June 2020 at 307 million rent largely in line with the end of the third quarter 2020, and indeed, the fourth quarter 29 team.
Despite the challenging conditions in the border economy, we have no [laughter] any deterioration in the collection rights in the loan book.
[noise] Oh strategic investments had mixed fortunes during the pandemic.
We continue to work closely with all of these partners.
Some key highlights include.
Bank Frick delivered a strong performance in the quarter benefiting from increased trading income and reported net income of 1.8 million Swiss francs in the first half of 2020.
Been Mone reported solid results for the year ended turning on February 2020, during our fourth quarter, but she just trading statement in late June indicating that the earnings were likely to be more than 20% down into half year to August 31, 2020 due to the thinks it depend I might come by South African.
Second operations.
We continue to work closely with Sun Mums in terms of the rollout of new products in the provision of software and systems.
Carbon had a difficult quarter as result of the direct impact of dependent on Nigeria and their business directly.
However, the rapid management action in the early stages of the lump them protected the business and they've seen a steady recovery in lending levels.
And therefore revenue over the last couple of months, while improving credit quality.
May be quick sourced slow down in revenue levels over the quarter, but its proactively manage this product mix to limits the impact on EBITDA.
Yeah, well placed to benefit from the pickup in activity.
India emerges from the pandemic and especially given their probably fall as an Indian owned and managed Fintech business.
They expect to return to pre cousin revenue levels before the end of the calendar year and then resume their growth Paul we've just seen them doubled revenue every 12 months or so up until the onset to the pandemic.
Don't see continues to make progress towards a critical recapitalization.
And remains in our balance sheet at a zero value.
The underlying business itself is improving its operating performance and is undergoing a significant rightsizing exercise.
However, the need remains for a recapitalization in order to achieve sustainability.
Looking now move on to capital allocation.
A key feature of the strategic review process, that's being undertaken and will be discussed by any later on this cool.
There's a focus on responsible when appropriate capital allocation.
Following the various disposals country didn't the last financial year.
It depends a substantial cash balance and an opportunity to rebuild a sustainable sustainable business, while taking into account the expectations of stakeholders.
As we previously disclosed we are working towards formally determining our status under the investment Company Act, which includes filing an application with the FCC relating to that determination.
This process involves amongst other things analyzing the potential impact of our anticipated performance and revised strategic direction, although status under the investment Company Act.
We anticipate finding such application with the FCC in due course.
Until we formally determined all status under the investment Company Act, we do not believe we will be in a position to return capital to shareholders.
Efficient manner.
Nice and implementing our revised strategic direction it becomes clear.
A full determination is no longer necessary.
Lastly, I'd like to go over our thoughts about fiscal 2021.
We've seen a meaningful improvement in various metrics since the effects of the severe locked down were lifted on the study first and May 2020.
Our loan book in South Africa is recovered from its lows fixed and mobile ATM utilization has improved and bill payments continue to grow.
[laughter]. Therefore, we do expect to see a sequential improvement in top and bottom line performance for the group.
But in order to achieve a sustainable improvement and returned to profitability for the company will need to see consistent progress on one continued story from the loan book to an increase the number of bank in financial services customer.
Three reduced losses from our international businesses.
[noise], we do intend to focus more intently on the South African markets and while we expect them to EBITDA to turn positive during the course of the yeah. We believe it is prudent to get a few months of data. So we would be in a position to offer full year guidance profitability targets for the full year.
I'd now like to hand, the call over to actually to go over the next one strategy.
Thank you Alex as is my first time adjusting to shareholders have not wrong, it's probably best to provide you a brief background. So we got to the crux of the strategy with you.
I'm going to point, just the borders nonexecutive direct time made much 20.
In addition to might you choose the director I, mostly consulting to not well known and strategic review.
Continue to be involved in supporting the business through the implementation of that strategy.
Prior to my role in that one.
The last decade, Investee financial technology businesses around the wells in Latin America Africa, the Middle East, India Southeast Asia. Several of these businesses growing into billion dollar plus market capitalization companies and I have really seem to powers from value proposition.
Labels underserved populations access digital financial services.
Yeah evolution of the business over the past two years I need to focus in our competencies some critical inputs in the strategic review process.
One of the most notable recent developments was establishments to the capital allocation Cummins you have the board.
Hi, I'm I'm, a member of that committee and we are tasked with ensuring that shareholder funds the business allocated food.
On a housekeeping.
So some slides and supplemental best presentation, we should be posted on that one's investor Relations website and will also be available via webcast.
I'll start on slide seven.
What happens.
When we commenced the strategy review, our first cost was to identifying that one's cool season, where it has a clear why right to win.
So most of that one school competencies is the provision of low cost financial services to understand as consumers.
These include unsecured credit transactional banking I, just want insurance and Verisk and various value added services.
The second is not ones unique ability to provide secure payment processing offline in rural environments. In this area not one has proprietary technology using P.S. and a well established payment processing <unk>, which is a market leader in parts of the building ecosystem.
Most of these competencies to be proven in the stock market the common thread between them it's competencies.
Well under seven segments within both the consumer and much relations access to still financial services.
He also assessed the geographic system that wants turns consolidated operations. Following disposing of the Korean operations, 96% of employees are in South Africa, 97% to register generates in South Africa. So net once days, primarily as a block of business.
On slide eight I wouldn't to preempt one question that we are likely to receive does this mean you are focusing on South Africa.
The answer is yes, I was when that one's cool current who competencies all we know install some revenue all and it also represents sizable market opportunity with more than 150 billion Rand Oaktown, Turkey addressable.
My experience is being that single country emerging markets payments.
Reached significant scale and I think this is borne out by the several billion dollar plus things businesses coming onto the much.
From Brazil to Nigeria, and Egypt, Bangladesh.
Slide nine.
[noise] South Africa.
It's primarily a cash based economy with approximately 60% consumer retail transactions, so being conducted in cash similar to many of the middle income countries.
We choose points to taking effect.
First there was a secular shift away from cash towards digital payment methods. So dockers part of the shift because it was simply a phase of transition.
Income countries and second there's still lots of headroom. So that's television to play out with cash will be 60% of transactions.
On slide 10, the addressable market.
We didn't know drills locks in context, we looked at net wants to add to the addressable market or town.
So do you on its current competencies.
He looked at the time into broad categories.
From a financial services time, which is estimated at approximately 57 billion Rand or approximately 3.4 billion U.S. dollar.
So much financial services Tom.
It makes it was approximately 104 billion Rand or 6.2 billion U.S. told us.
The confusion DASL isn't that one currently has the competencies and technologies to target two sizable addressable markets within Southern Africa with a combined time of 150 billion Rand.
9 billion U.S. doors.
A detailed analysis of its Tom and that one is well positioned the under service issues on both the consumer unmatched side.
On the consumer side that one has a proven capabilities to provide credit insurance transactional banking and want to teachers to walk through the pyramid base. It is underserved by all my other competitors in the financial services industry.
So much inside the understands portion is sizable.
SMB small medium enterprise and SMB my first would be too much price.
I wish there an estimated 700000 formal much is 1.2 million in so much.
No one is well positioned to service those markets with a much insight heavy particularly attractive secular growth characteristics.
It's important to note that although I'm talking these two markets separately, the two offerings often insulin.
It is quite gratifying to businesslike net one it was already invested in the technology needed to provide most major payment services independently.
Sure Igor acquiring or bill payments at the same times offering a range of financial services like lending in insurance.
Slide.
Oh outlines stylistic vision for network.
We.
We tried to bring this holistic offering to life of the slide using a single merchant Illustrative example.
Our research classifies M.S. I mean, it's one that has sales.
At least 600000 South African Rand.
I was only 36000 your stores, so there's a small but.
Today, these businesses, primarily getting cash providing a secure I suppose the process for them is important uses.
So to the with the security concerns and its laskin long.
That one was its existing fixed and mobile H.M. infrastructure and under service areas is well positioned to revise the machines. The service. This is the cash deposit revenue stream.
In addition to supplying their existing testers that one could also drive cross sell opportunities and generate additional revenue from these merchants to key areas.
Hi, My line goes from actions to accept digital payments, which in South Africa, mostly card payments.
At the moment.
This would provide acquiring revenues net one.
Second is to enable them access to all the bill payments value added services like airtime electricity sales. This leverage is easy pace existing capability and provides additional revenue to both merchants on that one.
[noise] you offering I've just described <unk> traditional much and offering what is exciting isn't that one also has the capability for the much into an easy pay wallet, what transactional banks towns to store that phones potentially to stuff. That's something that's would provide fishing revenues in that one.
In addition, once you have to post to sell infrastructure in the field you can back the custom on your platform you able to provide lending and insurance products based on some of his understanding of the machines Kashmir requirements and the ability to repay.
The combination of these services might be expected to result in the take rate up between 2% to 5% talk too much and spend.
Simultaneously the much benefit because when these services provided as a package and offering their efficiencies created.
For example, a bill payments business, where the offering is typically prepaid can be netted off against an acquiring offering we matched to so.
Following a transaction, which creates a lower cost itself, especially when leverage in the same structure.
Efficiency benefits of providing a bundled solution also likes to help drive digital adoption Foster.
You know many cases more compelling.
Slide 13.
Relates to net ones existing infrastructure.
How do we make the suit the school service offering a reality and what do we.
The short answer is the net one is already very well positioned owns and controls many aspects of a distribution infrastructure technology and licenses.
There was some gaps for example in the distribution in the M. SMB market, which is the point of sale top of mind onto distribution infrastructure.
Well no one has began to deploy point to sell devices in partnership with the stocking back in order to address this opportunity.
Yeah, the gas, which would be beneficial to fail to enhance net ones offering include a mutual banking license, which would enable net one to reduce its cost so because most of the payment streams from acquiring it's yams as well as its take deposits inside right.
A fresh and relevant Brad.
So in short there's work to do in filling the gaps, but that one by and large has the capabilities technology and infrastructure to make the strategic vision a reality.
Yeah, one currently services, both the consumer unmatched, okay, and that's the capacity to bring the two offerings together to provide a holistic service.
This would increase customer stickiness and significantly improved economics.
The price of being the leading financial technology company in South Africa targeting under says its customers. It's great it's executed with focus and consistency.
No one is better place than any other business in the country to one locked out price. We're looking forward to the John you had.
With that operator, we're happy to open it up to kidding.
[noise]. Thank you very much said, ladies and gentlemen at this tiny classification, you're welcome to <unk> and in one I didn't catch antenna to keep that have you seen I think <unk> combination tan.
I think this pets, so pacing the question kids.
Well.
Let's have train five Ht pen.
Sure that to keeping in microfinance condition to make up automobile accessing the Christian can.
If you decide to Christian happy decreased anybody should wait Christian.
Not much but Tony choose how do you touched on that trended itself.
Thank you.
Just a reminder, golf's question, you've often free stall.
One.
The first question comes from.
Right show nice.
Oh B. Riley.
Hello, Good morning.
I I have a few questions I'm, just starting off for Ali the talking about the.
Assets and technologies and South Africa into businesses are you missing any acis said technologies should should we expect the company.
To make any acquisitions or you know does that was largely have all.
That you need to to grow your core business.
And then I've got a couple others.
Oh.
So I guess.
Good morning, or I guess I.
She comes back.
So no one largely has all the assets in technologies required to execute it.
On the strategy.
As I said, there's three areas that meant capabilities in one of those areas is in the last mile distribution in the micro much space or the other one is that there is a prime.
Some benefit if you are able to access or the.
No clattering settlement arenas for acquiring ATM and except deposits not would be facilitated by a mutual banking license I think the that's out there I touched on was slightly up a a relevant in fresh.
Right I think the there.
Each of those first two predominantly can be addressed by acquisition, but you don't have to be addressed acquisition.
Right and then just a going off of the need for mutual banking license does that play into.
The <unk>.
The plans that you have.
To submit the filing would be as you see would that require additional capital could you.
Could you talk a little bit about that.
You know if you were done since your proactively trying to satisfy the requirements.
The investment at what would that sort of imply.
Would that mean, you know you're going to take on more of a majority stake or is that a claim that.
You know you would divest some of the minority investments how does can you help us understand.
Understand how.
Do you foresee that playing out.
Well I just coming on this actually.
I think if you in the way the investment Company Act classification works obviously.
The more operating assets that we control the better in terms of.
I'm, having a clear.
I'm, sorry to pull fuel classification under investment under the investment Company Act. So if we were to take control of another business for example, it would.
Push us into a better position.
In terms of that investment company I classification that obviously depends on a multitude of variable so it's not a.
Straightforward calculation necessarily but.
The moment under the investment company I kept cashes regarding to the neutral assets and if he can convert cash into controlled operating assets and a.
Significantly in terms of how are you viewed under the investment Company Act.
<unk>.
Is that right so.
Oh, so so does that answer this isn't flight.
What does it tell you about do speaking direction or what are the tell us about your strategic direction is does that mean you are trying to come investment company. You know do you foresee that classification coming through.
Or.
I'm just trying to understand what the what the direction is especially if you want to grow your South African business, and Oh, most likely possibly need the mutual banking license.
Well that's been fairly put you in the investment company category.
No, it's more likely to assist us in making sure that we're not in investment company under the investment company. So the the plan is that you know we regard ourselves as a as an operational and business and on investment company and investing you know South African business and lifting it's it's a fair value wouldn't would naturally helped.
Fix the a investment Company Act I live in that we have at the moment.
Right and can you talk about the timeline. This process do you think that this.
How long do you think this takes the determination.
Its not really there's no fixed timelines. Unfortunately, I'm sorry, we can't really unfortunate give a lot of clarity on on the timelines as we said we over in the process of submitting an application.
And after that as I understand that it's really a prices that the FCC will then run through and.
As I said, there are there any real fix timelines around that.
Right. Thank you and then my my last question is.
What what did the strategic review I guess yields of what did the speakers you yield.
In terms of the nonstrategic assets, you know movie quick Bankrate that the T. Rowe the carbon if not strategic investors.
To that they would eventually be divested.
I think any pick that up would you I'm sure.
I'm, sorry, I'm I'm happy to do it I mean, I think that ER.
Most important change for the operations so outside of South Africa is that the board has taken a decision on types into sees our business. The business has been significantly actually negative since inception.
Just got material operating loss and for the past a prudent capital allocation or genes next to the business itself.
We will look at all of our strategic investments in the coming months, we have no specific lance divestments of others.
All of the other operations will be assessed on I'm on a case by case basis.
And and the same let's sit on the same token you might decide the two up your stake in any specific.
I'll speak asset.
Is that fair.
You might increase your investment or or or divest so.
So I mean, I think that they are the fact that we are focusing our interests on south Africa and that that is all strategic priority would mean that.
Clearly it will be through that lens that the capital allocation committee would be looking at any potential opportunities.
You got that I'll I'll take my questions I'll take this offline. Thank you so much.
[noise] I can't the next question comes from David Immoral, Oh, Phelps Dodge capital management.
Oh, hi, or have you can hear me.
Yep.
Right Yeah. Yeah afternoon. Thank you very much from coal yeah, I could just just try to pry little bit just from the previous question I mean, finbond as is publicly disclose that they're looking to sell they say operations.
Hi, how is that that you I'm kind of drawing the line yet your digital banking license how's it influencing.
You know you off your strategy going forward, you're thinking going forward I'm.
The second question I have is some of the other thing called income or holding companies Opex. The regulator has.
It's sorta to impose some extra regulatory burdens and that's capital burdens, which has meant that spun off. These banks have you had this conversation with the rate was south African regulates a that's I guess, there's lots of also filtering into this investments.
Holding company criterion for these you see has this also being an issue and as those come up in your thinking maybe could elaborate on that thank you.
[noise], maybe just Uh huh.
Just framing I'm of course is little bit D V reference to a mutual banking license is I'm not so precondition oh the strategy, it's not necessary I'm condition.
Having a mutual bank license.
Provide additional strategic benefits.
Its certainly not gating item or just to <unk> just to contextualize or that.
The pop in which distributes shoot.
That is.
This is most ferrous because there's not one particular I'm direction of travel I'll, let 'em, Alex favorite common shares anything specific to stay with respect to send bundles Alaskan regulation.
Yeah look we certainly haven't had any conversations with the regulator and I think part of any decision that we make around a mutual banking license would include you know assessment or what are they associated costs and the regulatory.
Requirements with that so.
You know at this point, it's really too early to talk about how that might influence. The situation. I'm. You know, we do have a lot of regulated entities within the South African grief anyway, we have the insurance company, we have a couple of FSP licenses or where I.
Not a stranger to the a regulated environment anyway.
Okay, and sorry, if infant bond is looking to sell their or their south African operations, and you're not going to follow on how does that impact your strategy, they're not having that kind of distribution base for credits.
We don't really utilize their their distribution base to originate credit at this point anyway, we do have some so cooperation and collaboration arrangement, but they're relatively small in terms of unread to the recent and we really don't see them.
See those relationships as critical in terms of.
Growing all financial services business.
I'm sorry, My last question. So then is that they're not am I reading you correctly that somebody doesn't play a funding benefits you nor a distribution benefits what we'll do what could you maybe talk about what that benefit is.
Are we talking about finbond today or yesterday and bought today.
I went we just have we have a and investment in assessing investment in Finbond.
We do collaborate in certain areas as I said said there is a little bit of cross setting, but it's relatively small.
Source any funding from Finland, and we all providing some services and some.
Particularly I T services into fed funds, but no there's no there's no real.
What's the right would cost benefits at this point in time with it.
Okay. Thank you very much.
Ladies and gentlemen, just try and minded <unk> question, you won't tell and then one.
Next question comes from and its caps and I've capsid equity.
Scott.
<unk>.
You very soft Dennis.
Okay.
Thanks.
Thanks for the presentation.
<unk> two questions from my side I know what.
That's true focusing on South Africa.
Would you be keeping your NASDAQ listing.
And HM.
Gotcha.
<unk> billion Rand onto Tan.
Most of that Greenfield.
Opportunity there hasn't been tapped what do you have to take market share away from others.
[noise], maybe I cannot comment this is.
I started so I'll start with the second question.
The time that is represented that represents the time as it exists today.
He green so if you like that hi, you wouldn't be taking from others. However.
Turning to addressable opportunity if you would include.
The expected growth.
As a consequence citation would be a launch time, so you can generate revenue.
By taking share and thereby driving the market clearly as net onesource operating.
On the service customers, there isn't material opportunity to try to Mockups and a lot of these not schools that was limited competition.
In terms of the.
ER.
First question, Alex and I do my Uh Huh.
Yeah, I mean I did the I think the NASDAQ listing a is up for a discussion. That's all I think we don't see any a change in that position a tool.
Thanks, I appreciate the answers.
Okay.
The next question comes sudden Nick [laughter], often seen <unk> assets managers.
Hi.
Thanks for taking my call.
I have some questions on the restructuring how cell C.
Yeah I investor.
Oh domestic other can recover some of the value some of the investment.
And.
I wanted to know how involved our young and then the guy in the restructuring process all cell C.
Do you think.
You can recover some of the investment.
And do you have any timelines that you can guide us.
On when this will be completed.
I can take a those questions on Ah So see we all.
Involved to a degree in terms of than we are obviously, a 15% shareholder and.
Board representation that so see that's weird enough activity driving that recapitalization process.
From all sides.
Were always hopeful that we'll be able to recover something out of the original investment but.
As you have seen from financials, we've written that investment down to zero.
You know, we certainly think there's a a business there when you get the capital structure right and.
But then there would be value that would be realizable out of it in terms of timelines I'm afraid I can shed any further lights on on a one time lines other than Ah I know everyone is working very hard to expedite that process and are completed as quickly as possible.
I'm I appreciate your answer, but I, just want to push back up but.
You know not it'll be hoping to recover some money, but how realistic is that hook.
Why why you're hopeful.
I think you know as I said that there are a core strong pool business there and a this is a bit this in more of a balance sheet structuring issue in terms of where Celsius and if that.
If that balance sheet can me rightsized in terms of its structure than there's no reason why the underlying performance, calling come through and deliver somebody.
But as an equity holder.
I mean, obviously thinking that the bondholders will take a quite a significant heiko.
Which means that the equity holders would be walked out in my misunderstanding the restructuring process.
Why do you think equity will have value.
But you know that'll that'll come out in the detail of the recapitalization witness announced in terms of how that is structured.
When you've written a comfort when you've written in investment down to zero you know, there's no doubt that any sort of value would be a would be welcome.
Okay, but do you have you had any thought they rumors that they the 10 pizza out have you had any sites.
Yeah, and I'm dead Cai. This is a nexus is drilled but I think we're just loading up the called for the rest. So I would recommend you you know why do these questions to eat us LCR to Blue label.
Because we would like to address some of the other areas I think Onyx and said what we can publicly.
Yeah I'm just trying to you know you guys have got its so important bought a a but maybe you actually probably since all the company.
Oh, no it's valued at zero, so I don't know I'll get back.
Yes, the accountants valuation I mean I need to.
It has done that that you whether we can rest have any of that valuation.
And I'm just asking you know they all although this is a very hopeful and not you guys are because I'm just I don't know why you so hopeful.
And whether you've had soccer anytime she started easy [laughter].
I I think some of that <unk> borders on on material nonpublic information, but I'm happy to have a conversation with you offline and and weekends that facilitate a call with you and the blue label them and Chelsea teams.
Okay. Thank you.
Yep.
The final question comes from.
P.J. sought it okay. That's Mac.
Capital management.
Hi, good morning.
Thanks for the strategic plans.
Obviously over over time, if you're successful and then implementing these plans and becoming a a profitable thing that company and then a large market.
You won't be valued the in in terms of the cash and investments at that point.
So.
Obviously, there should be some urgency to take advantage of the opportunity to do to implement a buyback and take advantage of that now I guess can you share any more thoughts on that and anymore thoughts on the timeline in terms of.
When was the FCC submission, Maine is there any guidance on any dialogue back and forth. Her do we just need to sit and wait.
I PJ. Unfortunately, there's a there's really no sort of parity we can give on timelines the.
The application as not mean formally submitted I think it's a it's a close but no actually submitted at this point, but.
And then once we're in ER.
And for many applied then we don't really have a great deal of insights into how long it'll take to.
To get resolution on the matter.
So it's very difficult Unfortunately to give you any guidance on on a ton runs, but we'll continue to be a you know do we need to do from all sides to expedite the process.
PJ its role or the sad that point yeah.
I'd just add to it at axis, saying, so I mean, the battery that right does one is the application then and clarification from the FCC, which retalix has addressed but there's also the other side that if we built the business operationally then we can self cure that problem or drastically.
Through the ratios and that is within our control and that is where we're trying to focus on.
In parallel.
Okay and.
Is it realistic to think that you could sell cure in the next couple of quarters here in calendar two.
2020.
Too aggressive.
I think that's probably a little.
Is that even possible.
It's probably a little bit aggressive in terms of myself Q.
I think one party into a third and fourth quarters of of this fiscal.
And the other out of going through the FCC.
It does for council tightened the calendar 2020 resolution couldn't be a possibility in that route.
I think.
Remote possibility I think is then bus at this point.
Okay is there scenario.
And talking to capital as well, where you have the pathway in the visibility on one or both of those pathways.
That you could start some form of capital return before actually getting entirely there.
We have not that a discussion yet with canceled.
Gotcha.
Okay. Thank you.
Thank you ladies and gentlemen, that's why it's just final question I get the training I saw that each month, you eat P.S. Kovacik incorporated conference call.
You may now disconnect your lines.
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