Lesaka Technologies' loss starts to improve significantly despite a year of big acquisitions

Lesaka Technologies’ net loss improved 386% to $87.5 million (R1.6 billion) in its 2025 financial year, a transformative 12 months with big acquisitions to build out its fintech merchant and payments solutions platform.

The big reduction in the Nasdaq and JSE-listed company's loss was largely due to the inclusion of a tax adjusted $49.3m non-operating, non-cash charge from a change in fair value and sale of non-core asset MobiKwik, impairment losses of $18.4m, and once-off transaction costs of $17.8m.

During the year, the group acquired payments solutions provider Adumo for R1.74bn, the submetering and payments solutions company Recharge for R507m, while in June, it announced the R1.1bn acquisition of online bank, Bank Zero. The group has also exited MobiKwik for R290m.

Chairman Ali Mazanderani said in an online presentation that 2025 was a strong year for them, and the group delivered on its guidance and advanced key priorities. The group had met its earnings guidance for 12 consecutive quarters.

Net revenue for the group that provides financial services, software, and other business services to Southern Africa's underserviced consumers and merchants, increased 38% to $328.7m (R5.3bn).

Adjusted earnings before interest, tax, depreciation, and amortisation (aEBITDA) of $50.7m was up 33% in rands, achieving the guidance provided. Adjusted earnings per share of $0.13 (R2.29) was up 187% in rand.

“We expect to maintain this momentum into 2026 and are guiding for aEBITDA growth of at least 35%. We have also introduced an adjusted earnings per share guidance, expecting this to more than double in FY2026 to at least R4.60, from R2.29 per share this year," he said.

He said the merchant division increased net revenue 46% to R3bn, and integration of acquisitions was still taking place.

The consumer division had grown revenue by 35% to R1.7bn - the division was growing market share from grant beneficiaries who were formerly Post Bank clients. Client numbers increased 23% to 1.9 million, 90% of whom were grant beneficiaries and 40% had a lending product.

The enterprise division reported a 9% decline in revenue but was expected to make a positive contribution to group earnings in the new financial year, he said. The division saw digital expansion during the year to allow alternative digital payments solutions.

For the first quarter of the 2026 financial year, the group guided for net revenue between R1.50bn and R1.65bn, while group aEBITDA was expected to be between R260m and R300m.

The guidance for the full 2026 financial year excluded the impact of the Bank Zero acquisition, which is still subject to regulatory approval by the Prudential Authority and South African Reserve Bank, and any unannounced mergers and acquisitions that may be concluded. The group hopes the Bank Zero acquisition will be concluded by the end of the year.

The Bank Zero transaction was settled through the newly issued shares and up to R91m cash, and Bank Zero’s shareholders will be left with some 12% of Lesaka’s shares once the deal is completed.

Kazang, a Lesaka company that focuses on prepaid value-added services (VAS) and payments solutions for informal merchants, on Thursday launched Kazang Pulse, a new version of its point of sale (POS) device.

Michael Wright, an executive head of growth and International at Kazang, said more than 90 000 informal traders nationwide depended on their POS devices to accelerate their growth and profits, and the latest edition of the Kazang device was designed to do everything in one strong, reliable machine.

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