Lesaka Technologies, Inc. (NASDAQ:LSAK) Q2 2023 Earnings Call Transcript

We have the non-core investments such as MobiKwik and . And we will be looking at means and ways to exit those positions in a responsible way. And that would result in quite a significant cash inflow for us to manage. In addition to that, I think we would be also looking at the right time in the market in terms of adjusting the structure of our capital position.

Frank Geng: Okay, thanks.

Rob Fink: Great. The next question is coming in from Raj Sharma of B. Riley.

Raj Sharma: Yes. Hi, thank you for taking my question. I wanted to ask maybe, perhaps, directed towards Lincoln. If you can talk a little bit about the consumer division, you know, talk about the lower transaction, the ATM transaction fees and the higher insurance fees? And also, what’s happening in the ARPU? And how you are able to push it up? And what should we see that going forward in terms of the traction in the conversion of the accounts?

Lincoln Mali: First of all, thank you so much. I think firstly, I want to say how pleased we are with the turnaround of the consumer business. I think that we’ve spoken over the last few months about the work we’ve done to get our staff to understand the importance of cross-selling. And all of that work is starting to come through. You’re starting to see more of our clients taking our insurance business and our sort of insurance products and our lending products. Those two things how to drive our ARPU. As long as we’ve got quality clients and those clients are able to take more of our lending products, and our insurance products, we want to see that ARPU increasing. And we think that if we maintain that, you’ll start to see some upside on that ARPU even further.

So we’re quite confident on the trajectory of our ARPU as we improve our business, as we improve our cross-sell to our existing clients. So we’ve been quite pleased with how our customers have responded on the lending side and the insurance side.

Raj Sharma: And on the ATM transaction fees, was that just primarily because of reducing your infrastructure.

Lincoln Mali: So just to clarify — can you just clarify the question specifically on ATMs? Are you asking about

Raj Sharma: Yes. You know, on the ATM transaction fees, they were lower. And was that because of the reduction in the infrastructure? I know that the ATMs have become far more efficient. And productive?

Lincoln Mali: Yes. So what I like — let me comment on just a macro point around it, ATMs in the business and then we can talk about some of the macro movements quarter-on-quarter as well. I think that according to your highlights is we’ve taken the 18 states down from around 1,500 devices, you know, just over year ago to around 880 at the moment. And approximately 60% of those are now in retailers. Previously, all of them were in our branches. And what we are seeing is a significant increase in volumes on those ATMs what we would call, transactions, which means other banks, the clients of other banks using our ATM. So you know, with the and state that it’s essentially hard. We are seeing and we’re protecting our volumes, and in fact growing and then that really is coming from a much more efficient, you know, per ATM activity than what we saw previously.

So I think very happy with the, you know, with the strategy that we — that’s playing out on the ATMs are in terms of driving productivity and super good device.

Raj Sharma: Yes. Thank you. And then just a question on Connect. Just wanted to understand how was it better than initial expectations when Connect was acquired? Has it — has Connect surprised you in any particular segment, and it surprised you positively?