Financial services and technology group Net1 will change its name to Lesaka later in May after shareholders voted in favour of the word, which means “kraal” in Setswana and Sesotho, as part of shedding its tainted image from the Sassa debacle.
Livestock, often seen as a symbol of security, community and wealth, are sometimes kept in a kraal in the centre of the community and considered the economic heart of a village.
The company said on Wednesday, when it released its results for the three months to end-March 2022, it wants its new identity to express its “commitment to the local communities” and “drive financial inclusion”.
Net1, valued at R3.734bn, has a primary listing on the Nasdaq and a secondary one on the JSE, and uses its banking and payment technology to distribute low-cost financial and value-added services to small businesses and consumers.
Net1’s image was tainted by the Constitutional Court ruling in 2014 that its payment arm, Cash Paymaster Services, unlawfully secured the R10bn contract to pay social grants every month between 2012 and 2018.
The company suffered huge losses after the contract was terminated in 2018 when it was challenged in court by one of the unsuccessful bidders, AllPay, which argued the tender process was irregular.
The backlash the company received led to an overhaul of its executive leadership and board in a bid to salvage its operations and position.
Since then, the company closed its loss-making International Payments Group (IPG) business in 2021 and bought the Connect Group on April 14, in a R3.7bn deal that will expand its footprint in the micro, small and medium enterprises sector in Southern Africa. The Connect Group, founded in 2006, provides fintech solutions to nearly 44,000 micro, small and medium enterprises (MSMEs).
CEO Chris Meyer believes the acquisition will help Net1 provide financial services to underserved consumers and merchants in Southern Africa to unlock growth opportunities, particularly in the informal merchant market.
He told investors the name change and conclusion of the Connect Group deal positions Net1 well for growth.
The company recently said its new strategy is to focus on growing its SA operations — having just sold off its remaining stake in Liechtenstein-based Bank Frick for $30m (R481m) — and it is looking to shut down its international payments unit.
To effect the strategy, the group will focus on products such as unsecured credit, transactional banking, microinsurance and value-added services through their EasyPay platform.
The tickers of the dual-listed company will change on May 18 from NT1 to LSK on the JSE and from UEPS to LSAK on the Nasdaq.
Its headline loss per share worsened 38.4% year on year to 54 US cents as it started with retrenchments expected to cost R91.3m. This is despite year-on-year revenue rising 27% in rand terms to $35.2m, as hardware sales, merchant transaction processing fees, and lending and insurance revenues increased.
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