Picture: 123RF/SOLAR SEVEN
Picture: 123RF/SOLAR SEVEN

Shares in financial services and technology group Net1 UEPS, fell 12.73% on Friday despite the group saying its loss narrowed in the three months to end-September, the first quarter of its financial year, as economic activity in SA picked up in the wake of easing Covid-19 restrictions.

Net1, whose share price movements tend to be volatile, is down 18.4% so far in 2020. The stock closed the week at R41.90, a far cry from its record intraday high of R298.50, reached in July 2008. 

The group, now valued at R2.36bn, provides transaction processing services, including being a leading payment processor and bill payment platform in SA, but has taken a hit from SA’s lockdown, which has weighed on general economic activity and kept people at home.

The group reported revenue of $37.1m (R582m) in the three months to end-September, a constant-currency decrease of 12% from the prior year period, but an increase of 39% from the three months to end-June.

The group reported a headline loss of $13.47m for the quarter ended September, from a loss of $4.5m in the prior year.

“We are pleased to see some encouraging signs in our operational and financial results this quarter,” said interim CEO Alex Smith.

“With the return to full operations, we have seen increased transaction processing volumes, loan originations, and a significant increase in the utilisation of our ATM infrastructure over the fourth quarter of the last financial year,” said Smith.

“Our long-term initiatives remain unchanged, to be the leading financial technology company in SA, focused on underserviced customers” he said.

The company warned “with Europe in the grip of a second wave of infections under the pandemic and some countries reintroducing restrictions”, this could have a negative impact on its Liechtenstein business, Bank Frick, in future. 

Bank Frick, in which Net1 holds a 35% stake, made $481,000 (about R7.48m) for the group, in the quarter. 



Update: November 8 2020

This story has been updated with additional information

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