Net1 expects growth ahead

Johannesburg, 31 Aug 2009

Listed universal electronic payment company Net1 UEPS expects growth of 20% in earnings per share for the 2010 year.

The company reported its year-end results to June and said fourth quarter revenue was $61.6 million, a year-on-year decline of 1% in US dollars, but an increase of 5% in constant currency.

Earnings per share, under US generally accepted accounting principles, in the last quarter, were $0.33, compared with $0.38 a year ago, a decline of 13% in US dollars and 8% in constant currency.

For the full year, the company reported revenue of $246 million, a 3% decline in US dollars, but a 19% improvement in rand. Net income, at $86.6 million, was flat in US dollars, but 22% up in rand, while fundamental earnings per share were down 7% in US dollar terms and down 2% in rand to 5c.

Transactions grow

Serge Belamant, CEO and chairman, says the last quarter was impacted by the timing of a new pricing structure with the South African Social Security Agency (Sassa). However, the company grew its transaction-based activities, while maintaining margins. It continues to be an integral social welfare distribution supplier to the South African government, he says.

“We are well-positioned to continue expanding the number of people using our technology and the breadth of services we provide in SA, as well as other global markets. I remain confident that we will continue to deliver sustainable growth for all of our stakeholders,” Belamant adds.

CFO Herman Kotze adds the company expects “to achieve constant currency fundamental earnings per share growth of at least 20%” in the year ahead.

“While our South African pension and welfare business should generate modest growth, given our new contract with Sassa, we expect EasyPay, and new country implementations to be more meaningful contributors to earnings growth in fiscal 2010,” he notes.

Net1 provides a universal electronic payment system, or UEPS, as an alternative payment system for the unbanked and under-banked populations of developing economies. The system enables an estimated four billion unbanked people to conduct electronic transactions.

In addition to payments and purchases, UEPS can be used for banking, healthcare management, international money transfers, voting and identification. The company also focuses on the development and provision of secure transaction technology, solutions and services.