Dual-listed payments provider Net1 UEPS expects to invest as much as $50 million - or R384 million - in capital equipment as it rolls out a South African Social Security Agency (SASSA) contract.
The company says the new five-year deal to process grants across SA's nine provinces should increase its monthly pension and welfare revenue by about 45% in rands.
In the six months to December, the company recorded revenue of $192 million and net income of $44.85 million. In the second quarter, it reported revenue of $92 million and net income of $25 million.
Net1 won the SASSA deal in January, and said subsidiary Cash Paymaster Services would pay out 15 million grants to 10 million South Africans across SA.
CFO Herman Kotze says the “next 12 months will require substantial investment in capital equipment and establishment costs, as we implement the new SASSA contract”. Kotze explains the revenue gains will come off the back of an increased number of beneficiaries.
He says the company expects to spend between $45 million (R345 million) and $50 million (R384 million) on capital equipment, and Net1 expects to be “fully phased-in by the second quarter of fiscal 2013”.
Chairman and CEO Serge Belamant says Net1's “focus over the next several months will be to execute on the expectations laid upon us by providing a comprehensive, seamless and superior service to this important constituency”.
Net1, which operates in SA, Republic of Korea, Ghana and Iraq, provides a universal electronic payment system, or UEPS, as an alternative payment system for the unbanked and under-banked populations of developing economies.
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