Q2 2022 Net 1 UEPS Technologies Inc Earnings Call
Okay.
[music].
Good day, ladies and gentlemen, and welcome to the niche one Q2 'twenty to 'twenty two earnings call.
Speaker 1: Good day, ladies and gentlemen, and welcome to the NET1 Q2 2022 earnings call. All participants will be in the same room.
All participants will be in listen only mode.
Speaker 1: there will be an opportunity to ask questions later during the conference.
They will be an opportunity to ask questions later during the conference.
Speaker 1: If you should need assistance during the call, please signal an operator by pressing star, then zero. Please note that this call is being recorded.
If you should need assistance during the call. Please pick one operator pumping star things.
You bet.
Please note this call is being recorded.
Speaker 1: I would not like to hand the conference over to Dara Dukes. Please go ahead.
I would now like to hand, the conference over to Dara Dierks and she's got a hit.
Thank you operator, welcome to our second quarter 2022 earnings call with me today are Chris Meyer group, CEO and linking Molly South African E. L. C O and Alex Smith, CFO , our press release and the supplementary investor presentation are available on our Investor Relations.
Speaker 2: Thank you, operator. Welcome to our second quarter 2022 earnings call. With me today are Chris Meyer, Group CEO and Lincoln Molly South African CEO and Alex Smith.
Speaker 2: Our press release and supplementary investor presentation are available on our investor relations website at IR.netone.com. As a reminder, during this call, you will be making forward-looking statements, and I ask you to look at the cautionary language contained in our Form 10Q regarding the risks and uncertainties associated with forward-looking statements.
Let's say and I are dot one dot com as a reminder, during this call will be making forward looking statements and I ask you to look at the cautionary language contained in our Form 10-Q regarding the risks and uncertainties associated with forward looking statements.
Speaker 2: Also, we will discuss our results in South African RAND, which is non-GAAP . We analyzed our results of operations in our press release in RAND and to assist investors' understanding of the underlying trends of our business.
They'll be I'll discuss our results in South African Rand, which is non-GAAP , we analyze our results of operations in our press release in Rand and it and to assist investors understanding of the underlying trends of our business. As you know the company's results can be significantly affected by the currency fluctuations between the U S dollar and South Africa.
Speaker 2: As you know, the company's results can be significantly affected by the currency fluctuations between the US dollar and South African RAN.
And ran.
Speaker 2: Chris will start the call with an update on strategy, then Lincoln will provide an update on the turnaround of the South African operations. And finally, Alex will go through the results of the second quarter. Following that, we will have a Q&A session. With that, I would like to turn the call over to Chris.
Chris will start the call with an update on strategy than Lincoln will provide an update on the turnaround of the South African operations and finally, Alex will go through the results of the second quarter. Following that we will have a Q&A session with that I would like to turn the call over to Chris.
Speaker 3: Thank you, Dara. Good morning, good afternoon, and thank you all for joining us for our second quarter earnings call today.
Thank you Dara.
Good morning, good afternoon, and thank you all for joining us for our second quarter earnings call today.
Speaker 3: On today's call, I'd like to focus on four key pillars that are critical to the successful transformation of NET1 into becoming a leading South African full-service fintech platform.
On today's call I'd like to focus on four key pillars.
Okay.
Successful transformation of niche one into becoming a leading south African full service platform.
Speaker 3: Delivery on each of these pillars will enable the management team to stay focused on repositioning the business for growth and capturing the long term opportunity we see ahead.
Delivery on each of these pillars will enable the management team to stay focused on repositioning the business for growth and capturing the long term opportunity we see ahead.
Speaker 3: Firstly, I will provide an update on the transformation in our consumer financial services business and discuss the early progress we have made towards our strategic imperative in returning the consumer financial services business to break even by June 2022 and then into profitability as soon as possible thereafter.
Firstly I will provide an update on the transformation in our consumer financial services business and discuss the progress we have made towards our strategic imperative to returning the consumer financial service business to breakeven by June 2022, and then into profitability as soon as possible.
Yep.
Speaker 3: Secondly, I will provide a high-level update on the acquisition of Connect Group and recap on the opportunity the merged entity will provide.
Lee I will provide a high level update on the acquisition of connect groups and recap on the opportunity the merged entity will provide.
Speaker 3: And thirdly, I would like to take you through the progress we are making in transforming our organization into a world-class platform. And lastly, I will highlight the important work we are doing in South Africa to strengthen our relationships with key stakeholders.
And thirdly, I would like to take you through the progress we are making in transforming our organic our organization into a world class platform and.
Lastly, I will highlight the important work we are doing in South Africa to strengthen our relationships with key stakeholders.
Speaker 3: So I'm encouraged by the progress we are seeing in the turnaround of our consumer financial services business, which is manifesting in some of the key performance indicators we are measuring. Each of the three levers we focused on, which are growth in active accounts, increasing average revenue per customer, and cost optimization have all started to deliver benefits.
So I'm encouraged by the progress we are seeing in the turnaround of our consumer financial services business, which is manifesting in some of the key performance indicators.
Great.
Each of the three leave as we focused on which are which are great.
Growth in active accounts, increasing average revenue per customer.
And cost optimization have all started to deliver benefits Lincoln will give you more detail on the performance of each of these but at a high level I would like to make a few points.
Speaker 3: Lincoln will give you more detail on the performance of each of these, but at a high level, I would like to make a few points.
Physically active account numbers increased to just under $1 1 million active customers, we took a proactive.
Speaker 3: Firstly, ActiveEP account numbers increased to just under 1.1 million active customers.
Speaker 3: We took a proactive approach to winning new customers with our newly trained salesforce, becoming more active in the community.
Our active approach to winning new customers without newly trained sales force, becoming more active in their communities.
Speaker 3: As an example, SASA recently launched their new registration portal for grants.
As an example, SASSA recently launched a new registration portal for grants.
Speaker 3: Transforming a process that is very paper-based and takes weeks to an online process that can take minutes
Transforming our prices that he's very paper based and takes weeks to an online process that can take minutes.
Speaker 3: And as a result, we are empowering our sales force with the right tools to go into the communities and help grant recipients register for their grant online and at the same time register for a new EPE account.
And as a result, we are empowering our sales force with the right tools to get into the communities and help granta recipients registered for their grants online and at the same time Register for a new E. P E account.
Speaker 3: Existing grant recipients who want to move their banking to an EPE account are also being assisted online through the portal. Can we see this as a positive step in the right direction?
Existing grant recipients, who want to move their banking to an E. B accounts are also being assisted online through the portal.
See this as a positive step in the right direction.
It makes me at all.
Speaker 3: ARPU performed slightly ahead of our target of $4.50 and with a focus on winning a bigger share of our customers' wallets, we are investing our efforts into better understanding our customers and the type of products they are looking for. This has highlighted a gap in the market for the launch of two new products which have already delivered positive sign-ups.
Performed slightly ahead of our target of $4 50, and with a focus on winning the biggest share of our customers' wallets. We are investing a if it's a better understanding our customers and the type of products. They are looking for this is highlighted the gap in the market for the launch of two new products, which have already delivered positive sign ups.
Speaker 3: Cross-selling into our existing book is an important focus area to deliver growth in our...
Cross selling into our existing book is an important focus area to deliver growth in our view.
Speaker 3: We already have a 38% penetration into our loan book. However, in our insurance book, penetration remains low at around 19%.
We already have a city, 8% penetration in each of our loan book either.
Insurance book penetration remains low at around 19%.
Speaker 3: This presents an opportunity with 90% of our employees now trained on all net one financial services products with the creditations to follow we can actively cross sell into existing base.
This presents an opportunity with 90% of all employees not trained on all niche one financial services products with accreditations to follow we can actively cross sell into our existing base.
And touching on the last lever cost control.
Speaker 3: Intouching on the last lever, cross control. A lever which is fully in our control and which moves the needle the most in returning the business to profitability in the near term.
Which is fully in our control and which moves the needle the most and returning the business to profitability in the near term.
Speaker 3: Progress on the direct cost actions taken during the quarter can be clearly seen in the Q2 numbers.
Progress on the direct cost actions taken during the quarter can be clearly seen in the Q2 numbers, we reported a strong improvement in EBITDA loss in Q2, showing the operating leverage in our business.
Speaker 3: We reported a strong improvement in EBITDA last in Q2, showing the operating leverage in our business.
Speaker 3: And pursuing to our review and optimization of the overall cost space, we launched Project Spring.
And pursuant to a review and optimization of the overall cost base, we launched project spring.
Speaker 3: Our project spring will include the cost reductions we have communicated to date, as well as further cost reductions realized through a restructuring of the Consumer Financial Services business and the rationalization of our distribution network.
Our project Spring will include the cost reductions, we have communicated to date as well as further cost reductions realized through a restructuring of the consumer financial services business and the rationalization of our distribution network.
Speaker 3: On an annualized basis, Project Spring is targeted to deliver in excess of 300 million Rand or $19.5 million in annual cost savings, which represents just over 20% of the consumer financial services cost base and freeing up some capacity for targeting.
On an annualized basis project spring is targeted to deliver in excess of 300 million red or 19, and a half million dollars in annual cost savings, which represents just over 20% of the consumer financial services cost base and freeing up some capacity for targeted investments in the business.
Lincoln will provide a detailed update on the turnaround of the South African operations later on the call and Alex will provide more color on the cost benefits to the bottom line.
Speaker 3: Lincoln will provide a detailed update on the turnaround of the South African operation.
Speaker 3: later on the call and Alex will provide more colour on the cost benefits to the bottom line.
Speaker 3: Given our progress on these levers, we continue to work towards reaching our break-even targets for the consumer financial services business by June 2020.
Given our progress on these leave as we continue to work towards reaching a breakeven targets for the consumer financial services business, but June 2022 .
Our second topic is regarding the connect group acquisition.
Speaker 3: Our second topic is regarding the Connect Group acquisition.
Speaker 3: And for those who are new to knit, why not, by the help to briefly discuss the rationale for their acquisition.
And for those who are new to niche wanted bought helped to briefly discuss the rationale for the acquisition.
Speaker 3: As we announced back in November last year, the Connect Group acquisition represents a transformational leap forward in net one's journey to becoming the leading Fintech platform for the underserved in South Africa. With this acquisition, we believe we will be able to transform our merchant business.
We announced back in November last year, the connect group acquisition rips. It represents a transformational leap forward in this one's journey to becoming the leading fintech platform for the underserved in South Africa with this acquisition. We believe we will be able to transform our merchant business compare.
Speaker 3: competitively positioning the combined entity to address the 700,000 formal MSMEs and the 1.4 million informal MSMEs, which is a large and growing opportunity.
To repositioning the combined entity to address the 700000 and formal M. S Emmys and the $1 4 million informal M. S. M S, which is a large and growing opportunity there.
Speaker 3: The Connect Group offers four main products to its customer base. First, a prepaid value added services platform, branded Kazang. Second, a digitized cash management and supply of payment solution, branded cash connect. Third, a digitized provider of growth capital to merchants, branded capital connect. And fourthly, a merchant acquiring solutions platform, branded card connect and Kazang pay.
The connect group office four main products to its customer base first and prepaid value added services platform branded <unk>.
Second a digitized cash management and supplier payment solution branded cash connect and third a digitized provider of growth capital to merchants branded capital connect and firstly, a merchant acquiring solutions platform branded card connect and cause they can pay.
Speaker 3: The Kinect Group will form part of our merchant B2B segment with the combination broadening our footprint and enabling us to deliver on our growth aspirations.
The connect group will form part of our merchant <unk> segment with a combination broadening our footprint and enabling us to deliver on our growth aspirations.
Speaker 3: In our next set of results, provided the term action is closed, we will provide further information on the strategy for the combined end.
And our next set of results provided the transaction is closed we will provide further information on the strategy for the combined entity.
Speaker 3: And as a reminder, the Connect Group transaction is subject to regulatory approvals and other customary closing conditions.
And as a reminder, the connective transaction is subject to regulatory approvals and other customary closing conditions.
Speaker 3: The respective financing agreements have been concluded, subject to usual condition precedence, and the transaction has been lodged with the competition authorities to obtain competition approval in South Africa, Namibia, and Botswana.
Financing agreements have been completed subject to condition usual condition precedents and the transaction has been lodged with the competition authorities to obtain competition approval in South Africa, Namibia and Botswana.
Speaker 3: But on the whole, we feel the transaction closing process is moving forward as planned, and importantly, the Connect Group is performing in line with expectations.
But on the whole we feel the transaction closing process is moving forward as planned and importantly, the connect group is performing in line with expectations.
Speaker 3: I'd now like to turn to my third topic, which is about building a world-class...
I'd now like to turn to my third topic, which is about building a world class platform.
Speaker 3: We believe building a world class platform firstly requires highly talented people. Secondly, an environment where they can outperform. And thirdly, a clear vision and strategy where everyone is aligned, understands their role and knows what winning looks like. We need to deliver...
We believe building a world class platform, especially requires highly talented people secondly, an environment, where they can outperform and thirdly, a clear vision and strategy where everyone is aligned.
Zero and knows what winning looks like.
We need to deliver on all three of these and I'm pleased to say that our leadership team of highly talented people is now largely in place with a focused golf on delivering on this vision and strategy and I want to welcome our New group CFO named Carla who will begin his role that did one on March the first 2022.
Speaker 3: And I'm pleased to say that our leadership team of highly talented people is now largely in place with a focused goal on delivering on this vision and strategy. And I want to welcome our new group, CFO , Naim Kola, who will begin his role at that one on March 1, 2022. And Barty Cuck, our new CTO.
<unk> and.
And bossy Kuck on news C T O.
Speaker 3: RC is a proven tech entrepreneur who brings over 15 years of financial technology experience to net one.
Well she is a proven tech entrepreneur, who brings over 15 years of financial technology experienced generic one.
Speaker 3: We also have our new head of human capital, Karabbo Matibi, our new head of consumer financial services, sales and distribution, Sampiuya Pakati, and shortly next week, our head of risk and compliance, Denzel Landy will also be in place.
We also have a new head of human capital Carrabba GB a new head of consumer financial services sales and distribution. Some few at Ekati and shortly next week I hit a risk and compliance tens of Landy will also be in place.
Speaker 3: I wanted to take this time to thank Alex for his dedication and commitment to NetOne and express how thrilled I am that he will be staying on as our group accounting officer.
I wanted to take this time to thank Alex for his dedication and commitment to net one and express how thrilled I am that he will be staying on as a group accounting officer.
Speaker 3: With these enhancements, we have built an exceptional team who will stay laser focused on executing our growth plans and advancing our strategic initiatives.
With these enhancements we have built an exceptional team who will stay laser focused on executing our growth plans and advancing our strategic initiatives.
Speaker 3: Our fourth and last pillar is improving stakeholder relationships.
Fourth and last pillar is improving stakeholder relationships we.
Speaker 3: We continue to build our relationship with Sassar through regular constructive engagements at both a national, provincial and local level.
We continue to build our relationship with SASSA to regular constructive engagements at both a national provincial and local levels.
Speaker 3: As I mentioned in our Q1 results, we have made a joint submission together with Green Road Tissasa to become one of a number of banks providing specific social ground payment service.
As I mentioned in our Q1 results, we have made a joint submission together with grin rod to SASSA to become one of a number of banks, providing specific social grant payment services. We are still waiting for the announcement from governments on the outcome of this tender. However, this joint bids evidences the strength of our growing relationship with grin right further.
Speaker 3: We are still waiting for the announcement from government on the outcome of this tender. However, this joint bid evidences the strengths of our growing relationship with Green Road.
Speaker 3: Furthermore, NetOne Moneyline is now officially registered on the National Treasury database as a supplier, positioning us for participation in future efforts by government to digitize the ground payment system in South Africa.
Net one money line is not officially registered on the National Treasury database as a supplier positioning us for participation in future. If it's by government to digitize the grant payment system in South Africa.
A key stakeholder of course is our customer and.
Speaker 3: The key stakeholder, of course, is our customer. And building a relationship with them at community level is of paramount insurance, important, rather, in building trust to ensure that you choose us to safeguard their financial assets.
And building a relationship with them and community level is of Paramount insurance importance rather.
In.
In building trust to ensure that choose us to safeguard their financial assets.
As part of our CSR initiatives in line with our corporate Pita pit at our core purpose of improving People's lives. We sponsored a number of branded blankets wheelchairs and large freshwater tanks and some of the communities in which we operate.
Speaker 3: As part of our CSI initiatives in line with our corporate purpose of improving people's lives, we've sponsored a number of branded blankets, wheelchairs, and large freshwater tanks in some of the communities in which we operate.
Speaker 3: Taken together, these partnerships are an important part of our strategy to increase net ones visibility and broaden our growth opportunities.
Taken together. These partnerships are an important part of our strategy to increase net ones visibility and broaden our growth opportunities.
Speaker 3: So before I turn the call over to Lincoln, I would also like to just highlight a change in the way we segment our business.
And so before I turn the call over to Lincoln I would also like to just highlight a change in the way we segment our business.
Speaker 3: We have decided to move away from the previous segmentation of processing financial services and technology to segmenting the business based on the way we operate, analyse and manage the business.
We have decided to move away from the previous segmentation of processing financial services and technology to segmenting the business based on the way, we operate analyze and manage the business.
Speaker 3: We have therefore made the decision to segment the business into consumer and merchant.
We have therefore made the decision to segment the business into consumer and merchant.
Speaker 3: The Consumer Operating Segment, I.E.R. Consumer Financial Services Business, will group all financial services provided to customers, in other words, business to consumer.
The consumer operating segments I E all consumer financial services business will.
It will drift all financial services provided to customers in other words business to consume at the <unk>.
Speaker 3: The merchant operating segment will group all goods and services provided to corporates, in other words our business to business.
Mentioned operating segments will groups, all goods and services provided to corporates in other words, our business to business Division.
Speaker 3: and the connect group will be included in the merchant segment following the close of the acquisition.
And the connect groups will be included in the merchant segment following the close of the acquisition.
Speaker 3: This segment change is reflected in our fiscal Q2 reports and Alex will provide additional color later in his remarks.
This segment change is reflected in our fiscal Q2 reports and Alex will provide additional color later in his remarks.
And with that I'll now hand over to my colleague Lincoln Molly Lincoln.
Speaker 3: And with that I'll now hand over to my colleague Lincoln Marley. Lincoln.
Thank you Chris Good morning, and good afternoon, everyone. Thank you so much.
Speaker 4: Thank you Chris, good morning and good afternoon everyone. Thank you so much for the timely of the forwarded us.
Tom we have afforded us.
As Chris mentioned I'll be unpacking some of the details behind what we're doing to target the consumer business returning to breakeven by June 'twenty to 'twenty two.
Speaker 4: As Chris mentioned, I will be unpacking some of the details behind what we're doing to target the consumer business returning to break even by June 2022 and profitability as soon as possible.
And profitability as soon as possible thereafter.
Speaker 4: I will also use the time to explain some of the results we've seen already in this court.
We also used the time to explain some of the results we've seen already in this quarter.
Speaker 4: Chris mentioned that we have three levers we are focusing on.
Chris mentioned that we have three leavers were focusing on.
Growth in active accounts.
Speaker 4: increase our revenue by user, our pool and cost optimization. I'd like to...
Average revenue per user our pool and cost optimization.
I'd like to focus on the first two.
Speaker 4: In order to drive growth in active accounts and increase our foods, we've had to fundamentally rethink the way we do...
In order to drive growth in active accounts, an increase a pause we've had to fundamentally rethink the way we do business.
Speaker 4: and focus on gaining a better understanding of what our customers are actually looking for. Our customers are out.
And focus on gaining a better understanding of what our customers are actually looking for.
Our customers that our customers by choice.
And to ensure that they trust us and choose to do business with us we need to make sure that we one have the right sales team and empowered with the right tools to be able to better serve them too.
Speaker 4: And to ensure that they trust us and choose to do business with us, we need to make sure that we, one, have the ride sales team and power to the ride tools to be able to better serve them.
Speaker 4: to build a deeper relationship of trust with them, thirdly understand their needs and the type of products they're looking for to drive a bigger share of wallet and ultimately hire up.
To build a deeper.
The relationship of trust with them fairly understand their needs and the type of products, they're looking for to drive a bigger share of wallet and ultimately get higher op, whose and lastly have the right distribution footprint to better service our customers in their community.
Speaker 4: And lastly, have the right distribution footprint to better serve with our customers in their comments.
Sure.
So at the beginning of our fiscal second quarter, we undertook a massive training program.
Speaker 4: So at the beginning of our fiscal second quarter, we undertook a massive training program to upskill our sales force nationally on all net one products as well to improve their sales at your...
Skill, our salesforce nationally on all net one product as well as to improve their phase I trial.
Speaker 4: This meant teaching them how to better connect with customers to entrench a deeper relationship as well as gain a better understanding of our customers.
This man teaching them, how to better connect with customers to entrench, a deeper relationship as well as gain a better understanding of our customer needs.
Speaker 4: We have successfully cleaned about 90% of our sales force so far.
We have successfully trained about 90% of our sales force so far.
The insurance product.
Yes.
Speaker 4: On its own requires training, there is followed up by an accreditation exercise.
All his own required training that is followed up by a computation exercise.
Speaker 4: This has seen an increased number of accredited sales representatives from 386
Do you just see nothing Chris the number of account you get sales representatives from 286.
Speaker 4: In Corridor 2 fiscal 21 to 554 in Corridor 2 fiscal 21.
In quarter, two fiscal 'twenty, one to 554 incurred through fiscal 'twenty two.
Speaker 4: To better understand how the newly trained cells were performing, we started to improve our own matrix measurement.
To better understand how the newly trained sales force, we're performing we started to improve our own metrics measurement.
Speaker 4: by sales consultant, by branch, by province, so that we can see the actual performance.
By sales consultant.
By branch by Province, So that we can see the actual performance. We're still at an early stage of our journey, but we can see the refocused sales culture, starting to emerge from our teams.
Speaker 4: We are still at an early stage of our journey, but we can see the refocus sales culture starting to emerge from art.
Our newly trained sales teams focused their efforts on building relationships with our customers.
Speaker 4: Our newly trained self-teams focus their efforts on building relationships with our customers.
Speaker 4: We are added by a new head of consumer financial services failed in distribution, the Imperial Packer T. Our sales force took to the streets and into the communities and interacted with our customers.
We added about a new head of consumer financial services further distribution simpler Parker to our sales force took to the streets and into the communities and interacted with our costs a customized aim.
Speaker 4: in their place of stay in their communities to better understand their needs and build deeper relationships of trust. This allowed us to identify a gap in the market.
In their place of <unk>.
Stay in their communities to better understand their needs and bird.
Our relationships of trust.
This allowed us to identify a gap in the market.
For two new products on the first of November 2021 will launch a new product E. P. He like.
Speaker 4: On the 1st of November 2021, we launched a new product, EPE Life.
Speaker 4: after a very successful pilot. This new account is competitively priced with a lower five-round membership fee for the entry-level low cost and factual account money.
After a very successful pilot this new York count as competitive competitor.
Competitively priced with a low of five prime membership fee for the entry level low cost transaction account market.
Speaker 4: This product is currently performing above expectations.
This product is currently performing above expectations with our own 20000 gross enrollments during quarter two.
Speaker 4: with around 20,000 gross enrollments during courted.
Speaker 4: In November 2021, we relaunch the rebranded standalone insurance product. This product was previously called in Dandy and has now been rebranded to Smart One.
In November 2021 .
We relaunched our rebranded Standalone insurance product. This product was previously called him Dandy and has now been rebranded to smart one.
Speaker 4: The rebranding was also accompanied by the increase in the insurable value of up to 30,000 rents and an increase in premium be cover time.
The branding was also accompanied by the increase in the insurable value of up to 50000 range and an increase in premium cover type.
Lastly, we also launched our one month loan product and that is also showing great traction with around 5300 loans issued since inception.
Speaker 4: Lastly, we also launched our one month loan product and that is also showing great traction with around 5300 loans issued since inception of which 60% were issued in color too.
With 60% were issued in quarter two.
Speaker 4: The maximum loan amount on this product is 500 rent for a period of one month.
Maximum loan amount on this product is 500 rent for a period of one month.
In order to better service our customers in their communities.
Speaker 4: In order to better service our customers in their communities.
Speaker 4: We are also reviling our current brand footprint to ensure that we have the optimum number of brands.
We are also revising our current branch footprint to ensure that we have optimum the optimum number of branches with the appropriate productivity in the right catchment areas and to ensure that we continue to own the last mile.
Speaker 4: with appropriate productivity in the right catchment areas and to ensure that we continue to own the last mine.
Speaker 4: During this quarter, 78 underperforming branches were identified and are in the process of being clued.
During this quarter.
78, underperforming branches were identified and are in the process of being closed.
Speaker 4: with ATM from the branches already relocated.
With a T M from these branches already relocate it.
Speaker 4: A framework was developed to assess the location of each HGM to ensure that their strategically placed closer to where our customers are to deliver higher volumes through securing better visibility, longer operating hours and access to higher foot traffic. The customers have yet
A framework developed to assess the location of each ATM to ensure that they are strategically placed closer to where our customers are to deliver higher volumes through securing better visibility longer operating hours and access to higher foot traffic.
<unk>.
Working together with Tianjin retail partners.
Speaker 4: We have relocated the number of underperforming ATMs to prime retail sites.
We have relocated a number of underperforming a T M two prime retail sites.
Speaker 4: For an example, an installation of 58 ATMs into the Tropis Group.
For an example, an installation of 58 Atms into the Trump is group.
Speaker 4: and 86 ate's into high boosts commenced transmission...
86, Atms into hypotheses commenced in December .
Speaker 4: We found that ATMs located in our express branches that we had recently launched became a target for increased ATM robbery.
We found that Atms located in our express branches that we had recently launched became a target for increased ATM robotics.
Speaker 4: As a result, we've taken the decision to remove ATM from all our express branches and relocate them into retailers that are in the community.
As a result, you've taken the decision to remove ATM from all our express branches and relocate them into retail as that I in the community.
A partnership with various retailers has been breached which will allow E. T E. N E. P light customers to do a direct deposit all withdrawals from their coupons.
Speaker 4: A partnership with various retailers has been reached, which will allow PPE and PPE-like customers to do direct deposits or withdrawals from their till-point.
Speaker 4: It's quarter end 31st December 2021. Over 5,480 retail outlets are now available to our customers nationally for withdrawals and deposits.
At quarter end 31 December 'twenty two into one.
Over 5480 retail outlets are now available to our customers nationally for withdrawals and deposits.
Speaker 4: All these efforts contributed to driving account growth.
All of these efforts.
Do you tend to driving account growth.
Speaker 4: on a gross basis, we saw 126,000 new accounts and and brought men over the court.
On a gross basis, we saw 126000, new accounts enrollments over the quarter.
With average activation rates in line with previous trends of 45% to 50% after three months of account opening.
Speaker 4: With average activation rate in line with previous trends of 45% to 50% after three months of account opening.
Speaker 4: Active EPE grew to just under 1.1 million active account holders as Chris mentioned earlier.
I'd give a b E grew to just under 1 million, one 1 million active accounts orders as Chris mentioned earlier.
Speaker 4: There is now a dedicated Web Stream focusing on improving account activation and utilization.
There is now a dedicated workstream focusing on improving account activation and utilization.
Speaker 4: The initiatives we have put in place to improve account activation are ready starting to deliver results with activations on new enrollment accelerating in the last two months of the second quarter.
The initiatives, we have put in place to improve our accounting division outrageous starting to deliver results with activations on new enrollment accelerating in the last two months of the second quarter.
Speaker 4: A renewed emphasis on cross-selling of loans and insurance products has contributed to our poor growing slightly ahead of our target of $4.50.
Our renewed emphasis on cross sell cross selling of loans and insurance products.
Contributing to our growing slightly ahead of our target of $4 50.
Now coming to our other products.
Speaker 4: Our loan book, Evidence, a 38% penetration, was around 221,000 new loans issued to the capital value of 321 million. With a capital value of new loans up 12% quarter on quarter, ending the quarter with an outstanding balance of 382 million.
Our loan book evidence of 38% penetration.
With our own 221000, new loans issued to the capitalized value of $321 million with a capital value of new loans up 12% quarter on quarter, ending the quarter with an outstanding balance of $382 million.
Speaker 4: The performance of the loan book remains very good with a lot of ratio of around one
The performance of the loan book remains very good with a loss ratio of around 1%.
Speaker 4: The measures we've put in place to reduce churn are delivering throughout, with our loan book showing a notable trend of repeat borrowing, where clients pay off existing loans and reapply for new loans on a regular basis.
The measures we have put in place to reduce churn and are delivering rollout with our loan book showing a notable trend of repeat borrowing where clients pay off existing loans and reapply for new loans on a regular basis.
We have noted.
Speaker 4: We have noted over 200,000 customers on the current loan book are repeat borrowers.
200000 customers on the current loan book a repeat borrower.
Speaker 4: It's important to emphasize that these repeat borrowers must undergo new credit vetting process to ensure that they can still afford the loans and that our loan book remains held.
It's important to emphasize that these repeat borrowers must undergo an do undergo new credit vetting process to ensure that they can still afford the loans and that our loan book remains healthy.
Speaker 4: We have also had extensive engagements with our customers about why they take loans from us. And the feedback has been overwhelmingly, overwhelmingly positive.
We have also had extensive engagement with our customers about why they take loans from us and.
The feedback has been overwhelmingly overwhelmingly positive.
Speaker 4: In our case, we offer a competitive advantage. Our processes are straightforward and easy to understand. With full disclosure of how much is being borrowed, how much must be repaid every month and our longer repayment period.
In our case, we offer a competitive advantage.
But our processes are straightforward and easy to understand with full disclosure of how much is being borrowed how much must be repaid every month and no longer report you mean period is.
Speaker 4: This is all made possible by the model that we've got in place, where the maximum loan amount is 2000 rents, or $105. And the maximum period is 600.
This is all made possible by the model that we've got in place where the marginal loan amount is 2000 brands.
$425 and the maximum period is six months.
Speaker 4: We strongly believe that our work in this space is at the very heart of financial inclusion.
We strongly believe that our work in this space is that the very heart of <unk>.
Financial inclusion.
By offering transparent easy to understand competitively priced lending products to those in the most underserved sections of our society.
Speaker 4: By offering transparent, easy to understand, competitively priced lending products to those in the most under 5 seconds of our society.
Speaker 4: We ensure that through employee training and consumer awareness, we're landing in line with the NASA credit act and are regulated by the NASA credit regulator. And it...
And so that through employee training and consumer awareness, we're lending in line with the natural kind of act in a regulated by the national regulator.
It comes to the insurance book.
Speaker 4: This provides us an ongoing opportunity, as Chris mentioned earlier, to execute on our cross sailing strategy. Because of the low penetration levels, that are averaging at 19% of our active account base, this is way below the target we want of about 45%.
This provides us an ongoing opportunity as Chris mentioned earlier to execute on our cross selling strategy because of the low penetration levels that are averaging at 19% of our active account base.
This is way below the target we want of about 45%.
Speaker 4: During Qura-2, we did write over 6000 new policies.
During quarter, two we did right over 6000 new policies.
Finally.
Speaker 4: on Project Spring, the last lever of cost optimization.
On project spring.
The last lever of cost optimization.
We are pleased with the progress we've seen in the second quarter having delivered.
Speaker 4: We are pleased with the progress we have seen in the second quarter. Having delivered a 53.
A 53 5 million range.
Speaker 4: O O O 3.5 million US dollars reduction in fixed cost in our consumer financial services business and the pinned by execution on our direct cost initiative.
Three $5 million reduction in fixed costs in our consumer financial services business underpinned by execution on our direct cost initiatives.
Speaker 4: We embarked on a challenging project to shut down our mobile payment business.
We embarked on a challenging project just sat down on mobile payment business to create a true financial services business unit that sells on fragile accounts loans and insurance products.
Speaker 4: to create a true financial services business unit that sells on taxial accounts, loans, and insurance products.
Unfortunately.
Speaker 4: As much as we try to minimize the impact on our employees.
As much as we try to minimize the impact on our employees.
Speaker 4: We recently announced a Section 189 process which started in January and will conclude early March 2020.
We recently announced a section 189 process, which started in January and will conclude early March 'twenty to 'twenty two.
There's a buffer again labor arbitration body, just as CMA Commission for conciliation mediation and application has been invited to lead this process and we are busy we're just progressing as we speak.
Speaker 4: The South African Labour Abederation Body, the CCMA Commission for Contillation Mediation and Abederation has been invited to lead this process and they are busy with this process.
Speaker 4: The combined cost savings that Project Spring is estimated to deliver is in excess of 300 million rent or 19.5 million US dollars on an annualized
The combined cost savings that project Springs is estimated to deliver in excess of 300 million or $19 $5 million on an annualized basis.
Speaker 4: We have already seen 53.5 million rents, or 3.5 million US dollars on these cost savings realized during this quarter, and we are targeting to realize.
We have already seen $53 5 million rands, all three $5 million on these cost savings realized during this quarter and we are targeting to realize.
Speaker 4: about 100 million over the remaining two quarters.
About 100 million over the remaining two quarters.
Speaker 4: These are difficult times for our employees. And the moral is adversely affected.
These are difficult times for our employees and their morale is adversely affected.
But in response.
Speaker 4: We have been more visible and more engaging as leaders to ensure that our employees keep serving customers whilst we're giving them the support and counseling they certainly do.
We have been more visible and more engaging as leaders to ensure that our employees keep serving customer months, whilst we're giving them the support and counseling they certainly deserve.
Speaker 4: Moving into our merchant business or the B2B, this was negatively impacted by delayed hardware sales in the new words terminal supply business due to the global chip shortage. However, the demand for product remains strong with continued support from key customers for payment devices order.
Moving into our merchant business or the B to B. This was negatively impacted by delayed hardware sales in the new wedge terminal supply business due to the global chip shortage. However, the demand for product remains strong.
With continued support from key customers for payment devices or that.
Speaker 4: We have worked with our suppliers and our training devices ordered I expected to be delivered over the next two quarters which will drive a rebound in the merchant business. We're excited.
We have worked with our suppliers and outstanding devices or that I expect it to be delivered over the next two quarters.
Which will drive a rebound in the merchant business.
We're excited about the potential.
Speaker 4: connect group acquisition and what this will mean for our broader merchant business as a combined group opening the door to integrate our value-edited services model across plants.
Connect group acquisition and what this will mean for our broader merchant business as a combined group opening the door to integrate our value added services model a cross platform.
Speaker 4: In closing, I'd like to recap that we are on track with the overall turnaround of the consumer business with all the initiatives I've spoken about, progressing very well.
In closing.
I'd like to recap that we are on track with the overall turnaround of the consumer business with all the initiatives I've spoken about progressing very well on the merchant side. The transformative connect group acquisition is in the process of being finalized with the regulator.
Speaker 4: The emergency site, the transformative group acquisition, is in the process of being finalized, with regulatory requirements moving ahead in line with expectation. Our responsibility...
Requirements moving ahead in line with expectation.
It is fungibility.
Speaker 4: During this time, it's to lead with empathy and compassion.
During this time is to lead with empathy empathy and compassion.
Speaker 4: during these difficult times, as we make tough choices towards our goal of reaching break even in consumer financial services by June 2020.
During these difficult times as we made tough choices towards our goal of reaching breakeven in consumer financial services by June 2022 I now hand over to my colleague Alex to give you the financial picture for CT Alex.
Speaker 4: I now hand over to my colleague Alex to give you the financial picture for this quarter. Alex. Thank you Lincoln.
Thank you Lincoln and good day everybody.
Speaker 5: Now let's turn to the details of our financial metrics for the court.
Now, let's turn to the details of our financial metrics for the quarter.
Speaker 5: Firstly, as Chris highlighted earlier, I wanted to point out the change in our segmental disclosure beginning in the second quarter.
Firstly as Chris highlighted earlier I wanted to point out the change in our segmental disclosure beginning in the second quarter.
Speaker 5: The new segments are disclosed in the financial section of our earnings press release with more details in our fiscal second quarter 10Q.
The new segments are disclosed in the financial section of our earnings press release with more details in our fiscal second quarter 10-Q.
And they show the operating results of the group split into the two business units. We are now looking at.
Speaker 5: and they show the operating results of the group split into the two business units we are now looking at in order to manage our operations.
In order to manage our operations.
We've decided to label our business units as consumer and merchant talking to the nature of the customers we serve in each segment.
Speaker 5: We decided to label our business units as consumer and merchant. Talking to the nature of the customers we see.
Speaker 5: Consumer will comprise the financial services business, while merchant will comprise what we've been referring to as payment.
Consumer will comprise the financial services business, while merchant will comprise what we've been referring to as payments.
Speaker 5: When the connect creep acquisition closes, it will form part of the merchant's sake.
And the connect group acquisition.
It will form part of the of the merchant segment.
Speaker 5: Moving on to the financial update for the quarter, our performance was characterized by continued delivery on the turnaround in our Consumer Financial Services business, which was partially offset by a slightly weaker performance in our merchant business.
Moving onto the financial update for the quarter. Our performance was characterized by continued delivery on the turnaround and all consumer financial services business.
Which was partially offset by a slightly weaker performance in our merchant business.
Speaker 5: primarily as a result of supply chain delays due to the global chip shortage.
As a result of supply chain delays due to the global chip shortage.
On a normalized constant currency basis total revenue for the quarter it was down 4% year over year.
Speaker 5: On a normalized constant currency basis, total revenue for the quarter was down 4% year over year.
Speaker 5: On a reported basis, total revenue for the quarter was 31.1 million, which was also a 4% decrease year over year in US dollars.
On a reported basis total revenue for the quarter was $31 1 million, which was also a 4% decrease year over year in U S dollar terms.
Speaker 5: The round was a broadly similar level against the US dollar during the second quarter of fiscal 2022 compared to the same period in the prior year.
The range was at broadly similar levels against the U S. Dollar during the second quarter of fiscal 2022 compared to the same period in the prior year.
So there's some taxes year on year quarterly performance in a little bit more detail focusing on our segments.
Speaker 5: So let's unpack this year on year quarterly performance in a little bit more detail, focusing on our segments. I would like to show that all way to the spots I applied.
I'll start with the merchant business, which was the main driver of the lower revenue number which was down 7% year on year in dollar terms.
Speaker 5: which was the main driver of the low revenue number, which was down 7% year on year in dollar term.
Speaker 5: Revenue from processing fees was up 26% underpinned by strong performance in our easy pay business with bill payment volumes up 9% year on year and an increase in the commission earned on the value of prepaid electricity and airtime sales.
Revenue from processing fees was up 26% underpinned by strong performance in our easy pay business with bill pay payment volumes up 9% year on year and an increase in the commission earned on the value of prepaid electricity and airtime sales.
Speaker 5: However, this performance was offset by a 40% decrease in revenue from technology products due to the global chip shortage, which impacted sales of terminal device.
However, this performance was offset by a 40% decrease in revenue from technology products due to the global chip shortage, which impacted sales of terminal devices.
Speaker 5: We have committed orders, but the deliridilais have led to delay in revenue, which we expect to rebound in the third and fourth quarters once stock is resu-
We have committed orders, but the delivery delays have led to a delay in revenue, which we expect to rebound in the third and fourth quarters. One stock is received.
Speaker 5: On the consumer side, our focused efforts to return the consumer business to profitability translated the revenue of $16.6 million up dollars up 2% year on year.
On the consumer side, our focused efforts to return the consumer business to profitability translated into revenue of $16 6 million.
Dollars up 2% year on year.
Speaker 5: This was underpinned by a strong performance in the insurance business and moderately higher account holder.
This was underpinned by a strong performance in the insurance business and moderately higher account holder fees.
Speaker 5: Spice a loan book of 382 million rand at December 31, 2021.
Despite a loan book of 382 million Rand at December 31, 2021 .
Speaker 5: compared to 352 million round a year ago, and a 19% increase in the capital value of new loans year on year, lending revenue was slightly down by 2%.
Compared to 352 million Rand a year ago.
And the 19% increase in the capital value of new loans year on year lending revenue was slightly down by 2%.
Speaker 5: This is because the majority of the new loans issued during the quarter were issued in December , with the revenue from these loans expected to flow through in the following.
It's just because the majority of the new loans issued during the quarter were issued in December with the revenue from these loans expected to flow through in the following quarters.
Speaker 5: On the profitability front, we're starting to see the benefits of our cost optimization initiatives coming through. Both on a constant currency and reported basis, the adjusted EBITDA loss for the quarter improved 42% from a loss of $12.1 million in the prior year to a loss of $7.1 million.
On the profitability front, we're starting to see the benefits of our cost optimization initiatives coming through.
But it's on a constant currency and reported basis, the adjusted EBITDA loss for the quarter improved 42% from a loss of $12 $1 million in the prior year to a loss of $7 $1 million.
Speaker 5: The main drivers of this improvement were the closure of our lost making IPG business and stronger profitability in the consumer segment.
The main drivers of this improvement with the closure of a lossmaking IPG business and stronger profitability in the consumer segment.
Speaker 5: which improved its EBITDA loss by 13% year on year and 52% versus quarter one 2022.
Which improved its EBITDA loss by 13% year on year, and 52% versus quarter one 2022.
Speaker 5: This was boosted by the execution of 53.5 million Rand or 3.5 million dollars of project spring cost savings initiatives largely linked to the closure of our mobile paypoint infrastructure.
This was boosted by the execution of $53 5 million rent or $3 $5 million of project spring cost savings initiatives largely linked to the closure of our mobile paypoint infrastructure.
Speaker 5: Included in our income statement for the current quarter is a $2.4 million and realized loss related to a fair value adjustment in respect of currency options.
Included in our income statement for the current quarter is a $3 4 million unrealized loss related to a fair value adjustment and respective currency options.
In anticipation of the closing of the connect group acquisition, we have entered into a currency hedge to fix the dollar amount required to meet our obligations.
Speaker 5: In anticipation of the closing of the Connect Group acquisition, we ventured into a currency hedge to fix the dollar amount required to meet our obligation.
Of an estimated $132 million of cash we have allocated to the transaction $122 million has been hedged at an effective rate of 15 ran 72.
Speaker 5: Of an estimated $132 million of cash we have allocated to the transaction, $122 million has been hedged as an effective rate of 15 round 72.
Speaker 5: Under Gap, these hedges must be marked a marker at each period end, resulting in this non-cash accounting charge for Q2 fiscal 22.
Under GAAP these hedges must be mark to market at each period end, resulting in this noncash accounting charge for Q2.
Fiscal 'twenty two.
Turning to our various investments.
Speaker 5: Bin Bond has no impact on our results as quarter as are any reports during our first and fourth quarters.
Pinbone has no impact on our results. This quarter is there any reports during our first and fourth quarters.
We currently hold our investment in fin bond on our balance sheet at $7 $2 million.
Speaker 5: We currently hold our investment in Finland on our balance sheet at $7.2 million.
And respected might be quick we continue to hold our investment at $76 million in line with the valuation achieved in that June 2021 fund raise.
Speaker 5: In respect of MobyQuick, we continue to hold our investment at $76 million in line with the valuation achieved in their June 2021 fund rose.
Speaker 5: They have postponed their planned IPO in the face of unfavorable market conditions, but are optimistic of being able to launch this during calendar 2022.
They have to spend the planned IPO in the face of unfavorable market conditions, but are optimistic of being able to launch this during calendar 2022.
They are making positive progress in expanding the B N P O business.
Speaker 5: They are making positive progress in expanding their BNPL bus.
Speaker 5: We continue to hold our investment in cell C at no value. We noted the renewal of the cautionary by blue label telecoms in respect of the recapitalization and are optimistic about their prospects for achieving.
We continue to hold our investment in cell C at no value.
We noted the renewal of the cautionary but by Blue label telecoms in respect to the recapitalization.
We're optimistic about their prospects of achieving this.
Speaker 5: We continue to hold around $14.5 million of so-sea airtime within our inventory balance.
We continue to hold around $14 $5 million associate time within our inventory balances.
At December 31, 2021 we had unrestricted cash of $182 $4 million.
Speaker 5: At December 31, 2021, we had unrestricted cash of $182.4 million, down 8% from $198.6 million at the end of June 2021.
One 8% from $198 $6 million.
At the end of June 2021 .
Speaker 5: The decrease in our unrestricted cash balances from the year end was primarily due to growth in our financial loans receivable book in December 2021 and the utilization of cash reserves to fund our operations, partially offset by the receipt of $7.5 million related to the sale of bank-fric in fiscal 2021.
The decrease in our unrestricted cash balances.
From the year end was primarily due to growth in our financial loans receivable book in December 'twenty, 'twenty, one and the utilization of cash reserves to fund our operations, partially offset by the receipt of $7 $5 million related to the sale of bank Frick and fiscal 2021 .
U S dollar denominated balances were $159 $4 million out of that title.
Speaker 5: US Dollar Denominated Balances were $159.4 million out of that total.
Speaker 5: And the total cash represents $3.33 per share and about 59% of our current net asset value of $5.64.
And the total cash represents $3.33 per share.
59% of our current net asset value of $5.64.
Speaker 5: Our operational cash burn for the quarter amounted to $13.8 million, which included around $4.2 million of an investment into working capital, being principally in respect of our lending book.
Our operational cash burn for the quarter amounted to $13 $8 million, which included around $4 $2 million of investment into working capital.
Principally in respect of our lending book.
Speaker 5: With that operator, we'd like to turn the call back over to you for the Q&A portion of our call.
With that operator, we'd like to turn the call back over to you for the Q&A portion of our call. Thank.
Thank you.
Yeah.
Speaker 1: Thank you ladies and gentlemen. If anyone would like to ask a question, you're welcome to press star and then one on your touch tone phone or on the keypad on your screen.
Thank you, ladies and gentlemen, if anyone would like to ask a question Youre welcome to pay Star and then one on your Touchtone phone or on the keep that on your screen.
Speaker 1: how I wish you would throw the question in my first star and then two to remove yourself from the question.
And how easily she was toward the question you May press Star and then choose to remove yourself from the question can you.
Speaker 1: If anyone would like to ask a question, you're welcome to play the star and then one.
If anyone would like to ask a question Youre welcome to pay Star and then one.
Speaker 1: This question is from Raj Sharma of Beeride. Please go ahead.
First question is from Raj Sharma of B Riley. Please go ahead.
Hello, Good morning, I had a question if you could kind of touch upon the B E. P. E accounts are you the number.
Speaker 6: Hello, good morning. I had a question, if you could kind of touch upon the EPET accounts, are you the number, I say is just under 1.1 million. You can also talk about the churn in the accounts. Has there been substantial churn in the last quarter?
Any change in just under $1 1 million.
Can you also talk about the churn.
Churn in the accounts has there been substantial churn in the last quarter.
Speaker 6: And if you're including the ETE light numbers in this, in the figure that you just gave a 1.1 million.
And if you're including the E T E light numbers in this in the figure that you just gave.
$1 1 million.
Hi, Raj. Thank you. Thank you for your question.
Speaker 3: Hi Raj, thank you. Thank you for your question. So I'll try and just make sure I cover of all of it. So firstly, the 1.1 million, just under 1.1 million active accounts does include the EPE light customers. It's still relatively small in terms of active accounts. So the contribution to that number is still relatively low, but we have included in that number.
I'll try and just make sure I cover all of it so.
Actually I'm, the one 1 million just under $1 1 million active accounts it.
Does include the E. P E Lat am customers, it's still relatively small in terms of active accounts the contribution to that number is still relatively low but.
But we have included in that number.
Speaker 3: In terms of churn, I think what I'd say is we are still learning. We're still understanding customer behavior, customer experience, and really getting closer to the activity in this book.
In terms of churn I think what I'd say is we you know we are still learning we still.
Understanding customer behavior customer experience.
And really are getting closer to the activity in this in this book.
Speaker 3: There is churn and as I say we're working on that and really trying to understand it and root cause it So you know we will when we're ready and and have you know clearer sort of sense of of trends Be able to start giving you some sense of what that will look like but for now it's
It is true in them and as I said, we're working on that and and really trying to understand it and root cause it's a yeah.
We will when we are ready and and have a clearer sense of of trends be able to start giving you. Some sense of what that will look like but for now. It's you know we feel it's quite early days and we you know we've got we've really got two quarters. If you think about it behind us of of this new strategy.
Speaker 3: You know, we feel it's quite early days and we, you know, we've really got two quarters of you think about it behind us of Of this new strategy And and so you know, we're learning and we don't believe yet that we can really with confidence give you a sense of trend I hope you understand that. Thank you
And and so yeah, we are learning and we don't believe yet that we can really with confidence give you a sense of trends hope you understand it. Thank you.
Speaker 6: Yeah, sure, thank you. And then my next question is on the merchant group. So, could you, I mean, what would the sales have been if you didn't have the delays on the equipment?
Yeah sure. Thank you.
Then my last question is on the merchant group Schwall did you I mean, what would the sales have been if you didn't have the delays on the equipment.
Speaker 6: And you reiterate that you would see recovery in the next two quarters.
And did you reiterate that you would you would see a recovery in the next two quarters.
Speaker 6: How much was the impact is what I'm trying to understand on the merchant group sales because of the chip shortage?
How much was the impact is what I'm trying to understand on the merchant group sales because of the chip shortages.
Hi, Raj I'm the.
Speaker 5: I rush the impact on the positive devices, so the positive devices that we were selling left, that's been primarily the impact.
The impact on the on the other Pas devices since the positive US is that we are that we were setting that's that's been primarily the impact.
Speaker 5: Now, because it's always a bit difficult to quantify exactly what that number is quarter on quarter, because the nature of these cells are quite lumpy.
Look it's always a bit difficult to quantify exactly what that what that number is quarter on quarter. Because you know the nature of the service that they are quite lumpy.
Speaker 5: I think the one thing that we have confidence is that we have a committed order book and a strong committed order book.
I think the one thing that we have confidence is that we have a committed order books and our strong committed order book that we are expecting to come through in Q3 and Q4.
Speaker 5: that we are expecting to come through in Q3 and Q4.
Speaker 5: Obviously, I think there's been plenty of publicity around the chip shortage hasn't gone away, but we've had commitments from our suppliers around meeting the obligations that we have in terms of the orders that we've had from our customers. And so we'll be...
Obviously, you know I think there's been plenty of publicity around you know the chip the chip shortage hasn't gone away, but we have seen you know we've had commitments from our suppliers around around meeting the obligations that we have in terms of the orders that we've had from our customers and so it will be you know.
Speaker 5: You know, we're certainly in regular contact around making sure that we fulfill those orders and meet our expectations over the next couple of courts.
Well, we were certainly in regular contact around making sure that we fulfill those orders in and meet our expectations over the next couple of quarters.
Speaker 6: Yeah, thank you. And then, if I could ask them, the Connect Group acquisition, what are the remaining approvals that are left? And could you talk about the timeline or are you still expecting a close by the end of Kisbee?
Got it. Thank you and then if I could ask them to connect group acquisition. What are the remaining approvals that are that are left and you could you talk about the timeline are you still expecting a close by the end of Q3.
Thanks Raj.
Speaker 3: Thanks, Raj. Yes, our timeline, you know, as I was saying earlier, it's largely unchanged. We feel the transaction is moving along in the time frames that we previously communicated and expected. And so, yes. The...
Yes, Tom.
<unk>.
As I was saying earlier.
It is largely unchanged we feel the transaction is moving along in the timeframe that we previously communicated an unexpected and say yes.
Sort of late March is a I sort of guidance around that when we feel the transaction should close now.
Speaker 3: late March is our sort of guidance around that where we feel the transaction should close. Now the key requirement to closing is competition commission approval and we are in the midst of that process with the competition commission.
The key requirement to closing is competition Commission approval and we are in the midst of that process with the competition Commission.
Speaker 3: and it's moving along, you know, again in the timeframes that
And it's moving along again in the Timeframes that that we anticipated and at this point, we have had no cause for concern or surprised so you know I think the time frames that are meeting as expected. The competition Commission is the main.
Speaker 3: that we anticipated and at this point we have had no cause for concern or surprise. So I think the timeframes are moving as expected. The competition commission is the main requirement for us to receive approval and we're hoping to have that all done in place by the end of March.
You no requirement for us to do to receive approval and we are hoping to have that all done any place by the end of March.
Got it. Thank you just one last question on the account and the new account growth.
Speaker 6: Thank you. Just one last question on the account in the new account growth. I know that it was great to hear Lincoln talk extensively about all the efforts that are going into recalibrating the sales force.
It was great to hear Lincoln talk extensively about all the efforts that are going into recalibrating the salesforce.
Speaker 6: But also, what could you give us a sense of what we should expect as ongoing a new account, gross new account ads for the next couple of quarters? And would your efforts into acquiring Sasa accounts? Would those be materials for the next two quarters?
But.
What could you give us a sense of what we should expect as ongoing.
Account gross new account for the next couple of quarters and would would your afterwards into acquiring SASSA.
Accounts would those be materials for the next two quarters.
Speaker 3: The Royal Junction? You know, as we were saying, we feel it's the early days. We've really got...
So Roger.
Yeah, that's what I was saying we feel is it's early days.
We've got you know tomorrow mine two quarters of data to to go upon we feel tremendously excited about.
Speaker 3: You know, to my mind, two quarters of data to go upon, we feel tremendously excited about, you know, the shift that's going on in the business into a, you know, sales driven sales oriented organization. You know, we have tremendous focus on improving our processes, training our staff.
You know the shift that's going on in the business into a sales driven sales oriented organs.
Organization.
You know, we have tremendous focus on improving our processes training our staff.
Speaker 3: As we said, getting out into the communities and really understanding our customer base, so we delighted with the progress we've made. But we just feel it's too early at this point to make predictions or try and give estimation.
You know as we said getting out into the communities and really understanding our customer base. So we you know we are delighted with the progress we've made but we just feel it's too early at this point to two to make predictions or try and give estimations on a you know let's call it a steady state or even a trend around.
Speaker 3: on, you know, let's call it a steady state where you're even a trend around a count growth. So my appeal would be patient with us. You know, we are working full-fume ahead. We're giving everything to, you know, to the turnaround of this business and getting it to break even as quickly as possible as we've set. And as those trends emerge, we'll be, you know, we'll be wanting to share them with you.
Our Congress.
My appeal would be pet be patient with US you know we are working full steam ahead.
We're giving everything to you know to the turnaround of this business and getting it to breakeven as quickly as possible as we as we said and as those trends emerge will be you know we will be wanting to share them with you. Thank you.
Speaker 6: Great, thank you so much. I'll pick my questions off one. Thank you again.
Okay, great. Thank you so much I'll take my questions offline. Thank you again.
Yeah.
Ladies and gentleman just another reminder, if anyone else Atlanta asked a question Youre welcome to pay Star and then one.
Speaker 1: Ladies and gentlemen, just another reminder, if anyone else would like to ask a question, you're welcome to raise a star and then one. Hello?
We won't force amendment to see if we have any other questions.
Speaker 1: It seems we have no further questions on the lines. I would like to hand back to Dora for closing comments.
It seems we have no other questions on the lines I would like to hand back to <unk> for closing comments.
Alright, Chris if I may I'm I'd like to just go ahead.
Speaker 3: Sorry, it's Chris, if I may, I'd like to just go through. Yeah, hopefully. Yeah, I just wanted to conclude really by, you know, emphasizing that we remain excited about the progress towards our transformation and then turning around the financial services business through those three levers of customer acquisition, increased our crew and reduced cost. And to ultimately deliver on our goal of building a leading South African FinTech platform for underserved consumers and merchants.
Yeah I just wanted to wanted to conclude really by emphasizing that we remain excited about the progress towards our transformation and then turning around our financial services business through the three levers of customer acquisition increased our crews and reduce cost and to ultimately deliver on our goal of building a leading.
South African Fintech platform for underserved consumers and merchants.
Speaker 3: And we remain committed to this and we look forward to sharing more on the journey in future calls. And so thank you very much, operator. And thank you to everybody for joining us on the call and for the interest in our business. Thank you.
And we remain committed to this and we look forward to sharing more on the journey in future calls and so thank you very much operator, and thank you to everybody for joining us on the call and for your interest in our business. Thank you.
Yeah.
Speaker 1: Thank you ladies and gentlemen, that concludes this conference for today. Thank you for joining us. You might now disconnect your lines.
Thank you ladies ladies and gentlemen that concludes this conference for today. Thank you for joining US you may now disconnect your lines.
Yeah.