Q4 2021 Net 1 UEPS Technologies Inc Earnings Call
Good day, ladies and gentlemen, and welcome to Nick one.
U E P S quota for R 22, each one earnings call.
Kidney attendees will be in listen only mode.
There will be an opportunity to ask questions and prompt.
If you should need assistance during the call.
Rachel Christie.
Okay.
Please note that this event is being recorded.
Now I'll turn the conference over to storage.
Please go ahead ma'am.
Thank you operator, welcome to our fourth quarter 2021 earnings call with me today are Chris Meyer Group, CEO, Lincoln, Molly South Africa E L and Alex Smith, CFO, our press release and supplementary Investor presentation are available on our Investor Relations website at <unk>.
They are a dot one dot com as a reminder, during this call we'll 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 also we will discuss our results in South African Rand, which is a non-GAAP.
We analyze our results of operations and in our press release and in Rand to assist investors understanding of the underlying trends in 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 Crystal to start this call with an update on <unk>.
G and Lincoln will provide an update on the turnaround of the South African operations and finally, Alex will go through the results of the fourth quarter.
Therefore, there after we will have a Q&A session. So with that let me turn the call over to Chris.
Thank you Dara can you hear me okay.
Good morning, Good afternoon, and thank you didn't run for for joining us for our fourth quarter earnings call today.
I think first and foremost I want to recognize that this is our first earnings call since the tragic passing of our former chairman.
Jonathan I'll do that.
We played a critical role in niche ones Jennie O change in her new including the appointment of high quality non exec directors the appointment of new senior executives.
Rebuilding this one's relationships with key stakeholders and.
Most of the conclusion of the strategic review last year.
We are fortunate to have you been pilloried.
It's just become a chairman in in August following Jobbies policy.
Ben joined the Board in June 2020, and was part of the various changes that I've just mentioned that occurred during job tenure.
Thank you Binnie is providing strong continuity on that journey.
Yeah.
So this is my first earnings call the estimate one and I've been in the role as group CFO just on two months.
The opportunity to take on the role of group C, which was.
And as you meet in the year.
Yeah, and it was very it could be apparent that the mix of people capabilities and mission.
It's unique.
Simply put the opportunity to be part of unlocking that one's potential was too important to ignore.
I'm a proud so African.
And I spend much of my career building businesses outside of the country in the U K and elsewhere.
I'm tremendously excited by the opportunity to reposition the network platform for guys and see it as an opportunity to make a real difference in our country.
Our mission.
Driving financial inclusion for underserved consumers and merchants in South Africa has a deep personal meaning for me.
And there is no one better positioned.
In the market that niche one.
Our company has incredible assets and capabilities in South Africa, and we aim to work towards creating a company that will be a force for good while unlocking value for shareholders.
I also consider myself incredibly lucky to have joined a strong team of over 3000 people here at niche one.
From that team today I have on the call with me Alex Smith, our CFO and Nick can Molly who joined as our Southern African CEO in May.
And is a critical leader in niche ones turnaround journey.
So being two months into my time here at net one I wanted to share a few initial observations and areas of focus going forward.
Firstly our.
Our vision.
Our vision is to build and operate the leading South African full service Fintech platform offering payment processing and financial services to underserved merchants and consumers.
Okay I'll call purpose is to improve people's lives, but bringing financial inclusion to south Africa's underserved customers and helping small businesses access to financial services they need to prosper.
We will achieve this through our ability to efficiently digitize the last mile of financial inclusion and should provide a full service fintech platform across cash and digital.
Serving the needs of both.
While also facilitating the secular shift from cash to digital that we see taking place.
We have a large target addressable market of more than 150 billion Rand.
And this time broadly split into two overlapping markets.
Providing consumer financial services to South Africa is more than 26 million adults in allison's one six.
Providing mentioned financial services to South Africa's micro and small businesses.
Of which there are an estimated 700000 and formal niches and 1.4 million informal diligence.
Second.
Our addressable market is growing.
And it's supported by long term tail wins for.
Africa is primarily a cash based economy.
With approximately 60% of transactions through conducted in cash.
As you know worldwide there is a secular shift away from cash towards digital payment methods.
Africa is part of this shift any of that assumed a phase of transition as other middle income countries.
We are well positioned to benefit from that shift.
And that leads me to my third observation.
She is on our core competencies.
On the consumer side, we currently provide transactional banking unsecured credits and a digital wallets.
As well as insurance and various value added services to people under served by the large banks are.
Consumer offering is underpinned by a proprietary technology, which gives us the unique ability to provide secure payment processing in offline and rural environments.
Our consumer offering is also underpinned by a network of over 350 branches and over one and a half thousand Atms.
As you know the products and infrastructure were built originally to serve as a base of over 10 million clients, but.
But our free now has 1 million clients and ease us lossmaking.
We therefore have a large and urgent strategic imperative to make the consumer offering profitable through six significant interventions on customer acquisition and on costs.
This is a huge focus area for US right now and my colleague Lincoln body will provide more information on our actions in this area shortly.
On the merchant side. We currently operates one of the largest bank independent financial switches in South Africa with integrations to over 40000 terminals for bill payments and value added services.
We also manage point of sale terminals for third parties and provide various cryptographic solutions.
My key reflection on our offering is that it is well positioned in the full merchant space. However, we are not currently addressing informal beaches and in particular, the micro and small businesses, which is a large opportunity and from a product perspective, we are not fully addressing the opportunity emerge.
Acquiring lending and cash management.
Part of that opportunity can be addressed organically.
And part of it can be addressed through acquisition.
But these initial reflections aligned very well with the outcomes.
The strategic review that was concluded by niche one and communicated to the markets on the Q4 earnings call last year.
And if I have a high degree of alignment on strategy with the board and my management team.
And I can say, we are going full steam ahead in building the leading fintech platform for underserved consumers and merchants in South Africa.
Being new to this role I also want to provide an update on two investor expectations that preceded by tenure here at that one.
Good.
Net one is in a significant net cash position.
As custodians of this capital we have a responsibility to invest in high return opportunities or to return it to shareholders.
Two months in.
I can start working through the business cases for various potential uses of capital within the business and in the market.
And doing that with the support of the capital allocation Committee that was established in 2020.
We will continue to apply rigor to capital allocation and we will update the markets of any material developments in due course.
Second.
I'd like to address the topic of continued losses in our financial services business, which is easy pay everywhere E. P E money lawn and smart life.
This is a question of scale.
And it requires material growth in the E. P account numbers in order to sustain the significant fixed cost base that we have.
The previous communication with a target of $5.0 million accounts by December 21.
And therefore, reaching monthly breakeven in that business units by June of 'twenty 'twenty two.
Getting to a breakeven number is no longer realistic within that timeframe.
We have had to establish an entirely new senior sales capability across the country hiring new provincial sells hits into eight other non provinces.
Which is now in place.
But it has taken longer than we anticipated. Additionally, our marketing efforts that were launched in June were interrupted by the rise and civil unrest that took place in July.
These rights were unprecedented in Democratic South Africa.
To be clear that.
We have ramped up the account acquisition significantly.
In August we experienced over 50000 sign ups, achieving the amount of growth in one month for what has been taking us one quarter.
So the plan to significantly increase the account numbers and reach breakeven is still top priority and it will take time as we focus on investing in the business to position us for growth going forward.
We will we look forward to providing more clarity on the expected growth rate and break even timelines in the coming months.
I'll say to you that going forward. What you should expect from me is a very high bar on setting guidance and executing against that guidance.
You should also expect clear and transparent reporting on progress versus plan.
And so to wrap up.
I'm really excited to have joined at one at such a pivotal stage in our journey.
Strongly aligned with my board and with the management team on this strategy and we are absolutely focused on execution.
I will now hand over to my colleague Lincoln Molly.
For a full update on the turnaround of the South African operations Lincoln.
Thank you my brother, Chris suddenly been an incredible two months are working with you partnering with you.
As we try and work on the business together together with our colleagues.
I personally joins net winding me.
And can sincerely say that it's been a huge honor to be part of the net one family at this critical time.
For a while.
These are the new organization under feeds.
But now there is a new mood.
New energy across all of our teams and we're re engaging with all of our stakeholders and with a strong commitment to our financial inclusion papoose.
I'd like to take you through some of the key developments over the last few months and some of the plans for the coming months.
My first step in my new role is to ensure that we have the right team and we have the right culture drags us to execute on our growth ambition.
I found many highly competent people already within net one, especially in the operational areas.
However, I also found the need to add many new skills into the business, especially into the senior management ranks for product and commercial ownership.
To that end, we've appointed several high caliber experienced and well regarded individuals to our management team within the last few months.
We've included a page with a brief buyers in the supplementary investor presentation posted on our IR site suffice to say that we have significantly strengthened our team over the last quarter and we are humbled by the number of people showing an interest due.
Joined net one.
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Net ones focus has historically been on the technology logistics and operations that enable us to successfully blade grams up to 10 million customers every month with SASSA as their main client.
The task at hand, now however requires all of that.
But in addition to that it also requires a greater focus on new and existing customers as individuals.
It requires us to deeply understand the needs of our clients. So that we can offer them appropriate solution.
Further, whereas net one historically has had a fixed base of clients based on the contract with SASSA, we now need to acquire new customers on the basis of our value proposition to the customer and retain our existing customers through great service.
We are currently involved.
In the far reaching training and.
And role modeling exercise for all of our team members to enable them to manage through this transition.
We're already good signs that the cultural change is taking hold.
With the team in place and the cultural changes ongoing focus as Chris said has been on significantly raising the growth trajectory of our client base.
In June we embarked on an internal communication and an advocate that campaign and in an above the line campaign through nine radio stations in non South African languages to show the market that net one is back and that our products are available for our clients.
We really just add 90000 E P accounts in June.
During the 1000 EEP accounts in July despite the unprecedented civil unrest in the country during that month.
And then 55000 EPA accounts in August.
Whilst it is early days, we're extremely encouraged by this trajectory.
We're also in advanced stages of launching two new exciting products for our clients. The first is called E. P. Like.
This is a transaction account with their physical E M V debit card.
Providing low cost banking services to the Unbanked customers in South Africa, It will compete.
Very favorably with all the entry banking products with other banks.
The second new product is called easy and.
It enables individuals without a bank account to receive cash using one time vouchers that can withdrawn at net one Atms.
Marketing tests on both products have shown strong traction and we expect them to be in the market in the next few months.
In the ATM channel, we're taking several strategic steps to drive bottom line growth.
We are introducing firstly value added services onto our E. G M.
For consumers, who buy airtime data electricity lotto tickets and vouchers.
Secondly.
Customers will also be able to.
To apply for loans using our Atms.
And finally, we're introducing south casts ATM recyclers for merchants, because we're responding to the needs that Chris was talking about about what merchants are looking for.
For us.
Finally.
We have and will continue to invest a significant amount of time and energy to show that we are a responsible corporate citizen offering low cost financial services to our clients sold in an honest and transparent manner.
We're very proud that we are back at the main table in key conversations in the financial sector that we are now part of the stakeholder community that is involved in financial services and that our infrastructure was used during the riots in civil unrest to close the gaps.
That the industry was facing.
Before I close off I think it's important to provide clarity on the damages in losses that we sustained in the riots in civil unrest that took place in July.
173, Atms, a damaged or destroyed nine burned 2 million was locked across 80, Atms and 19 branches were damaged.
All the damages our SASSA the loss of $39.0 million rands for Atms and Brian damages.
And these have been submitted via our insurers to South Korea, which is the South African national riot in Charlotte.
Wait for a wage payment of these claims our insurers have given us. The go ahead to proceed with some repairs and replacement and this is in progress.
In conclusion, we have made significant progress over the last quarter and providing the platform for the growth of net one South African operation.
And we've also materially improve the mindset run rate on customer additions.
Lots of work remains and we are very strongly focused on this task.
Now I'll hand over to my brother, Alex to talk about our quarterly results.
Thank you Lincoln and Chris and I wanted to take the opportunity to extend an official welcome to you both on your first earnings call.
It's been an exciting few months since your arrival and I met one of our people are looking forward to our future under your leadership.
Now onto the financial and operational highlights.
Total revenue for the quarter was $39.0 million, which was a 41% increase year over year in U S. Dollar terms and a 15% increase in Rand terms.
Primarily due to higher volume volume driven transaction fees improved lending revenue and hardware sales.
The U S dollar was 18% weaker against the Rand during the fourth quarter of 2021 compared with the prior period, which also impacted on our reported results.
We reported an adjusted EBITDA loss of $10.0 million, which was 31% better than the $11.9 million EBITDA loss reported for the fourth quarter of 2020.
This was mainly as a result of the closure of ITG, which incurred a loss of $6.0 million in the prior period.
The core South African operations, so EBITDA losses for the quarter of $15.0 million compared to the $14.0 million in the prior period.
Primarily due to weaker profitability in the financial services segment.
Linked to increased insurance claims related to the Covid pandemic.
Otherwise the cost base remains stable and we have significant available capacity.
The fourth quarter 2021 fundamental loss per share was <unk>.
18 cents compared to 21 cents per share a year ago.
Corporate costs were $10.0 million.
Which were significantly higher than Q4, 2020, primarily due to an allowance for doubtful loans receivable of $4 million, which we have excluded from adjusted EBITDA and fundamental earnings.
This was partially offset by the net reversal of stock based compensation charges of half a million dollars.
In South Africa, our consumer bank accounts ETE increased by about 43000 gross accounts and 23000 net accounts during the quarter.
The encouraging increase we've seen during the first two months of fiscal 'twenty two have been discussed earlier in the call.
This left us with a total number of active bank accounts at June 32021 of a little over 1 million.
Our ATM network utilization has continued to trend in the right direction.
But in terms of total transactions and the number of cash withdrawal transactions.
For the quarter total transactions were up three 5% compared to the prior quarter and was 16% higher than the same quarter in fiscal 2020.
The number of unique customers using our infrastructure was up four 4% on the prior quarter and up 20.
27% on the same quarter last year.
So the prior year was impacted by the Covid lockdowns that were prevalent during the quarter.
Okay.
Transaction volumes through our easy pay switch, we're up 7% compared to the prior quarter, while transaction values also increased by around 5%.
Okay.
In our financial services business the loan book finished June.
30th 2021 of $336 million.
Yes.
The other contributor in this segment is our insurance business.
Which sort of number of active policies increased to 246000 from 233000 a year ago.
However, a marked increase in claims which were 50% higher in Q4 'twenty one than Q4 2020 due to the pandemic meant that this was the main driver of the increased loss in financial services.
IPG was officially closed during the quarter with all staff exiting the business we.
We do continue with various company de registrations in liquidation processes. These are administrative in nature and we can now effectively closed the chapter on this operation.
Turning to our various investments we can provide the following updates.
During fiscal 2021 we exited our entire positions in bank Frick and V. Two which has substantially reduced our equity accounted investments compared with last year.
Certain bond reported its fiscal 2021 results in May which included further losses as it recovered from the effects of the pandemic, particularly in respect of its results in South Africa.
As a result, we recorded a $8.0 million loss being our share of its losses for the second half of its fiscal year to February 2021.
However, this was an improvement on the loss of $8.0 million, we recorded in respect to the first half of their fiscal year.
Might be quick filed a draft prospectus with the relevant India Indian authorities in early July.
We are very supportive of the IPO process. They are following and look forward to seeing the company move forward.
During the 2021 fiscal year, we increased the carrying value of our investment in line with the valuations underpinning various capital raises closed by Moby quick.
This resulted in a noncash pretax fair value increase of $27.0 million.
In Q4, 2021, which lifted the carrying value of our investment to $76 million at June 32021.
This valuation is based on the most recent capital raised performed by might be quick in June 2021, which was based on a $700 million pre money valuation.
We continue to hold our investment in cell C at a no value.
We are encouraged however by the recent announcement by a fellow shareholder Blue label telecoms that they have raised funding to facilitate the recapitalization themselves.
Cell C continues to improve its market position and to report improving financial performance.
And we are optimistic over its future prospects once the recapitalization is concluded.
Okay.
In July 2021, we increased us short term credit facilities from $4.0 billion to $5.0 billion in order to access the necessary cash to stock our Atms.
These facilities are only available for use in respect of our Atms and.
And we believe are currently sufficient to optimally operate our ATM business.
At June 32021, we had unrestricted cash of $204.0 million and no debt.
U S dollar denominated balances were $177.0 million out of that Tycho.
This represents $3.69 per share in cash and about 58% of our current net asset value.
With that operator, we'd like to turn the call back over to you for the Q&A portion of our call.
Okay.
Thank you very much Sir ladies and gentlemen at this time he can a host of patients you won't press Star and then one on a touchtone phone with a key Pat on your screen.
If you decided to withdraw your question involvement by starting to exit the question queue.
Just remind us if that.
The passion he won't quantify star and then one.
We will pause the amendment will relate to the question queues to bone.
The first question comes from Raj Sharma of <unk> Securities.
Hi, good morning.
I I have a I have a oh.
Few questions about I'll start with.
Welcome aboard Chris and Lincoln, It's a pleasure to hear you on the calls.
So bush.
Chris.
You've set.
You stated that you set a high bar on any sort of numbers going forward, but any indication of what that bar is I know you took off.
<unk>.
The number of accounts theyre going to be added by the end of the fiscal 'twenty two it seems like.
There's a lot of addition to the staff and a lot of addition.
To the right players in in your local geography, but any sort of indication on what is your target for account adds for the year.
George Hi.
Can you you mentioned you got a few questions, but let me come in and just try and respond to that and if you have follow ups, yes, we can.
We can go on so 50, thank you.
Thank you for the welcome.
No we cannot.
Very excited to be part of this business.
You know early early days in the journey for us, but tremendously excited about what we see.
In terms of forward guidance.
And the ball if you like.
I think that as I said, we at this point, we're not in a position to provide guidance.
You know we are.
We are very focused on being transparent and in providing.
You know guidance and any indications that that.
That we can achieve as a business.
We are hopefully you can appreciate having been in the seat just for for two months.
That's it you know it is early days and we're looking through.
The underlying momentum in the business and really a wonderful and very very clear views around a more formal guidance before we come out and that's what I mean by by a high bar.
It's around clarity so you know as we sit on.
I've seen remarks, we can see the momentum the momentum is clearly building in terms of EPS growth.
The August numbers.
A significant step up from from July and June and we vary.
Hopeful and around.
Around that momentum continuing to build I think what I'd also say is and maybe underline is a lot of work as Lincoln was saying has gone into.
Especially hiring and replacing a senior sales executive cross the country.
Frameless is in many ways. It one was a logistics business. It was a business that was focused on delivering.
Moving cash from point, a to point b and ensuring crops with paid.
Our challenge has been to.
Reposition this business to recognize that not only do we have do we have a key relationship with SASSA, but each one about a million plus cut.
Estimate is a customer and we need to change the culture in our organization to being really really client focused client acquisition focus and solutions driven and that's a big shift and that's what's been going on over the last few months and that's what we're looking for in the data to see that.
Starting to come through and allow us to live will give you a much clearer and confident numbers and.
In guidance so.
I hope that answers the question I hope that gives you a sense of where we focusing.
And you know.
We will in future come back and give you targets and numbers that we would want to be held accountable to.
Right. So it's very encouraging to see the account growth.
And also I see that there has been great additions to the team does this mean that the cotton and the infrastructure is expanding or the costs or should we assume that the costs are going to be higher as well.
I was looking for some sort of.
Ring fencing around that.
So I think a few points to make on costs.
You Shouldnt expect cost base in those financial service business to increase our focus on reducing costs in and got into services business and we.
We have a number of.
Leave us already.
Being acted upon and focused on.
The investment in new people to a large degree is replacement of some roles.
And is a investment required to to really shift the.
As I said the culture of the organized organization to one of sales as an investment in sales.
It didn't really drive account growth and activation, but within the context of you you should not expect to see the cost base in that financial services business increase it to the country. We are we are committed to seeing it reduce.
Got it thank you that helps.
See if I can move on to.
The possible acquisitions that you are referring to in the on the merchant side and the informal space is there any sort of indication on hum.
What possible size would that be or.
If you have already identified.
Candidates.
Sort of a timeline is it.
When when could we expect something.
Any sort of color around that.
King.
Yeah.
As I said in my remarks, we are we have.
Have a number of.
Opportunity that Lewis, we are evaluating we have.
Spent a lot of time looking at the markets and cross referencing what's out there too.
You know our capabilities in those gaps that I was just discussing in our capabilities. So we have a very good handle I believe in terms of of potential targets.
And we are working through a few business cases in that regard.
We can't say more than that at this point, but as soon as we have something.
If we have something.
Two two.
<unk> announced we will bring that to market.
Got it.
And then just moving on to the SASSA accounts there was a.
Our CFO and the post of has begun the search for a repeatable quote unquote card scheme to issue cards over the next five years.
And they said we need to issue about 12 million cards.
That needs to be replaced.
For a big cost is there does this repeatable card scheme as soon that's one would be a big contender.
I'm going to ask Lincoln to come in on this call on this question in particular, if you don't mind Raj.
What's important to address yes, we will give you that.
A good sense of of how we are working with SASSA and how that relationship with SASSA has been repaired as Lincoln was referring to earlier, but I think the guidance is best placed to provide a little bit more detail and color.
I'll take that.
Thank you Chris.
Do we apply to our mind to the tender.
We looked at the tender in quite a lot of detail.
And in the end, we decided not to participate further in the tender because we felt that the commercial terms of the tender were not acceptable to us and we felt that we could still go on.
With the momentum that we've got.
To try and grow the customer base organically.
Without having to go through a procurement process for a deal that we thought we did not make a lot of commercial sense for us. So we're able to go back to the both surface and politely declined to participate.
But we've indicated that we off are available to help in whatever way, but we couldnt see ourselves.
Participating in a module.
That did not make commercial sense and therefore, we didn't do that but on the other hand as Chris was saying we have spent a lot of time rebuilding our relationship with SASSA at all levels from the NASA leadership to provinces to local and it's done on a transparent.
<unk> competitive basis like everybody else because they want clients to have choice and we also want clients to have choice. If they are there.
The other organizations that can offer better services and us and that's fine we think that we can offer.
Good services and that's why we see our customers coming back to us So we didnt pursue.
That.
That tender at all.
Got it so there is still a.
Still the same opportunity available to NEP wanting to get back a lot of the assessor accounts.
As your customers, yes, indeed, so that that's exactly the opportunity we saw that.
Many of those clients still do come to us.
<unk> for their transaction.
Our staff are now engaging in more conversations than in the past as Chris was saying in the past it would have just paid.
The Grand and not engage in a conversation now they're able to engage in a conversation and give a sense of our capabilities and most of those clients have been with us before they know what Ned one is capable of and they are now coming back on the basis of the available positions that we have.
And the service that our staff has continuously given through all the difficulties we've had men and women who have been in this business for 15.2025 years and you've always given the pass to the customer and those are the people that are now.
Fitting from the our customers coming back.
Okay perfect. Thank you.
I'll get back in queue.
And take this offline. Thank you so much for answering my questions.
Thanks, Craig.
Thank you, ladies and gentlemen, just remind him even a half the question he welcomed by Star and then one.
The next question comes from Jeffrey yogurt he.
Genie Com capital.
Hi, guys. This is Jeff.
Welcome, Chris and Lincoln, It's great to have you on the call as well.
Congratulations on the recent pickup in EP accounts.
I was curious Alex if you could maybe.
Linda Roger's question, but could you provide you know are at least sort of a general view as to what breakeven would be in terms of the EPA accounts.
So you can get that African business sort of back to breakeven.
Yes, Hi, Jeff.
Look the numbers are materially different from what we've indicated in the past in terms of the number of <unk> accounts.
To get to breakeven.
So I think we've previously guided to $1 for 1.5 million for South Africa, as a whole to get back to breakeven and I think we are we see that significantly differently at this point, but as Chris mentioned, we're going through a process now.
So we'll certainly come back.
Give perhaps a clear a clear guidance around that in due course.
Okay, that's great and the second question I had is and this might be one for Lincoln.
There was a couple of press reports related to recently related to the Covid.
Covid relief grant, suggesting that SASSA confirmed.
The bank account method is the most convenient and quickest way to receive the grant also suggested a period I believe I think it was like September surge. The 10th is the window to change the math that.
I was wondering if you saw this affect your recent account adds and whether you think this is some sort of a shift.
And attitude thinking et cetera, SASSA that will make you know sort of opening new accounts easier or is it more sort of temporary or a temporary related to COVID-19.
I think I think broadly the sinking within SASSA and the thinking among financial institutions is starting to align.
That we need one another to solve an intractable south African problem.
And I think if anyone off Austin it is remind us how deep. These problems are the right kind of gave us that picture. So we now have more regular engagement with SASSA as part of the other.
Our financial institutions. So what SASSA has done is that it started to digitize the <unk> approval process.
So today for new grounds, you can actually apply for a grant in the SASSA portal without going to a SASSA brands.
What all our staff are doing for those clients mainly in the rural areas. We are now using that opportunity to help our clients apply and therefore those clients are able to apply and get their bank account and that is all done in the three to four D.
You know turnaround time, so that's a first positive for US we think that if that's done for new clients. It could also be done for other clients, who want to change bank accounts SEC.
Currently for the 350 Grand.
Did it in a way where everything was done digitally.
All the obligations are done digitally so you can see the swing from SASSA, which is aligned to our interest as well to do everything digitally and so we participated in that as well and we are starting to see some of those obligations.
The 350 Grand So I think Directionally, we see more and more of SASSA going more digital and we are also giving ourselves from our I T side to be able to do that with SASSA and that would also help us with the activation of accounts so that if we.
We've opened an account there must be a money flowing into that account and thats something thats going to be good for us and.
It's one of the variables in looking at when the financial services could be.
You know.
Turning around and get to breakeven. So these are all the variables. We are working on as Chris was saying that at the right time, we will be able to give better guidance, but these are good inputs into what we're trying to solve and so the stars I think are aligning much more now.
So that's very encouraging I guess then the last follow up would be related to the increase in August and that's a pretty significant.
Uptick in new accounts and sorry, how much do you attribute to you can give some color on this how much do you attribute to sort of the marketing campaign.
New staffing and then just sort of the digital Digitization that you just talked about from SaaS or you know sort of how much would you put in.
And each of those sort of buckets in terms of the the new accounts in August. Thank you very much.
It's probably early days, yet we are putting through the data to give us those answers.
But certainly the new leadership in all the provinces is playing a role.
We are repurposing, our marketing using more digital marketing using our own infrastructure that we've got our Atms, our branches and all of that to.
To market our own staff confidence.
Is getting better.
And then obviously the relationship with SASSA is also improving and we have the digital play also from SASSA. So in our mind, it's all of these.
Contributors, it's still very early days for us to be able to pinpoint specifically, which ones are more do you know can you attribute more to and we want to build more more history. We wanted to build more understanding and we're trying to get to entertain more of that.
And we are spending a lot of time in the field adjust again this morning.
With that.
Couple of brands running Josh just to get feedback from them about what do they see on the ground, what's improving and Thats also a big difference in the culture, we have.
And the organization that we spend a lot of my time in the field with our clients with our staff in all provinces to get the pulse of what's going on and engaging with SASSA and adderall players and that makes a big difference.
Yeah.
I'm curious does that conclude your questions.
Yes, thank you very much.
Thank you, ladies and gentlemen, I will now hand, it back to management for closing comments.
Alright.
Thank you very much operator.
Just to conclude.
Again, thank you very much to everybody for joining us on the call. Thank you for the questions.
Thank you for the interest shown in our business I think to hopefully you heard in those closing remarks from Lincoln.
The activity the levels of activity the momentum that is going on in our business the excitement that when you're starting to feel across our branches across the.
The country.
As we take this shift from a more reactive.
Operation focused business to one that is really focused around building momentum building client acquisition and building.
The leading south African Fintech platform focused on underserved consumers and merchants, we will very committed to this.
We look forward to sharing more on the journey.
In future calls thank you very much for joining us.
Thank you ladies and gentlemen that concludes today's event. Thank you for joining us keeping all disconnect your lines.
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