Net1 posts first-quarter loss
Financial services and technology group Net1 said on Friday that the loss of its social-grants contract as well as a migration of grants accounts to the SA Post Office had resulted in a 36% decline in revenue for its first quarter to endSeptember.
Financial services and technology group Net1 said on Friday the loss of its social grants contract as well as a migration of grants accounts to the SA Post Office had resulted in a 36% decline in revenue for its first quarter to end-September.
Revenue fell 36% to $80.7m (R1.2bn), with the company reporting an operating loss of $2.7m, as it continues to grapple with the fallout from changes to the grant distribution system at the SA Social Security Agency (Sassa).
The JSE- and Nasdaq-listed technology group fought lengthy and costly battles in various courts about the grants system, with its Cash Paymaster Services subsidiary ultimately losing its R1.3bn lawsuit against Sassa in July 2019.
It has been ordered to pay back R317m to the agency.
Net1 also owns just over a quarter of credit provider Finbond, which has been hit by a card switch at Sassa to the Post Office. The new card does not have the functionality to load electronic fund transfer debits or stop orders, with Net1 saying on Friday it had seen a decline in account numbers.
The company’s focus in the near term is to improve liquidity to reduce debt, to invest in growth businesses and to return capital to shareholders, said CEO Herman Kotzé.
Net1’s share price was unchanged at R40 on the JSE on Friday, down 73% from its 52week high.
THE FOCUS IS TO IMPROVE LIQUIDITY TO REDUCE DEBT, TO INVEST IN GROWTH BUSINESSES AND TO RETURN CAPITAL TO SHAREHOLDERS