Exhibit 99.1
Net 1 UEPS Technologies, Inc. Announces Third Quarter Results
Johannesburg, South Africa (May 9, 2006) –Net 1 UEPS Technologies, Inc. (“Net1” or the “Company”) (Nasdaq: UEPS) today announced results for the three and nine months ended March 31, 2006.
Results
The Company reported an increase in net income of 39% to $16.6 million for the three months ended March 31, 2006, from $12.0 million for the three months ended March 31, 2005. Earnings per common share and linked unit increased 34% to $0.292 for the three months ended March 31, 2006, compared to $0.218 for the three months ended March 31, 2005. Revenue increased 20% from $45.7 million for the third quarter of 2005 to $54.6 million for the third quarter of 2006.
The Company reported an increase in net income of 27% to $43.7 million for the nine months ended March 31, 2006, from $34.4 million for the nine months ended March 31, 2005. Earnings per common share and linked unit increased 23% to $0.774 for the nine months ended March 31, 2006, compared to $0.629 for the nine months ended March 31, 2005. Revenue increased 10% from $134.9 million for the first nine months of fiscal 2005 to $147.9 million for the first nine months of fiscal 2006.
Since the Company’s reporting currency is the U.S. dollar (“USD”) but its functional currency is the South African rand (“ZAR”), and due to the significant impact of currency fluctuations between the USD and the ZAR on the Company’s results of operations, the Company also analyzes its results of operations in ZAR to assist investors in understanding the changes in the underlying trends of its business. During the three and nine months ended March 31, 2006, the ZAR was weaker against the USD than during the same periods in the prior year. The impact of these changes on results of operations is shown under the column “Change” in the table of key metrics included at the end of this press release.
In ZAR, the Company reported an increase in net income of 42% to ZAR 102.3 million for the three months ended March 31, 2006, from ZAR 71.9 million for the three months ended March 31, 2005. Earnings per common share and linked unit increased 38% to ZAR 1.802 for the three months ended March 31, 2006, compared to ZAR 1.310 for the three months ended March 31, 2005. Revenue increased 23% from ZAR 274.5 million for the third quarter of 2005 to ZAR 336.8 million for the third quarter of 2006.
In ZAR, the Company reported an increase in net income of 32% to ZAR 279.7 million for the nine months ended March 31, 2006, from ZAR 211.5 million for the nine months ended March 31, 2005. Earnings per common share and linked unit increased 28% to ZAR 4.954 for the nine months ended March 31, 2006, compared to ZAR 3.862 for the nine months ended March 31, 2005. Revenue increased 14% from ZAR 828.6 million for the first nine months of fiscal 2005 to ZAR 946.9 million for the first nine months of fiscal 2006.
Third Quarter Highlights
- $187.8 million in transactions were processed through our merchant acquiring system in the third quarter of fiscal 2006, compared to $45.5 million in the third quarter of fiscal 2005. During the three months ended March 2006, 2,518,296 grants were paid through the Company’s terminal base, compared to 631,252 during the three months ended March 31, 2005;
- 3,905 terminals were in use at 2,352 participating UEPS retail locations as of March 31, 2006, compared with 2,406 terminals in use at 1,441 locations as of March 31, 2005. These numbers were comparable to December 31, 2005 while the number of transactions processed per terminal increased from 379 during the three months ended December 31, 2005, to 643 during the three months ended March 31, 2006 due to the improvement in the productivity of the installed base;
- UEPS transaction-based activities effected 10.7 million payments during the third quarter of fiscal 2006, a 7% increase over the number of payments effected during the third quarter of fiscal 2005;
- A total of 3,601,076 UEPS smart card-based accounts were active at March 31, 2006, compared to 3,321,368 active accounts at March 31, 2005;
- Hardware ordered in January 2006 totalling $4.4 million was delivered to Nedbank Limited with the remaining deliveries related to this order expected to be completed during the fourth quarter of fiscal 2006;
- Launch of SmartSwitch Namibia (Pty) Ltd in February;
- Customization and hardware totalling approximately $1.2 million was sold to SmartSwitch Namibia (Pty) Ltd during the three months ended March 31, 2006;
- Formation of SmartSwitch Botswana (Proprietary) Limited with Capricorn Investment Holdings (Botswana) (Proprietary) Limited; and,
- Offer for the entire issued and outstanding ordinary shares of Prism Holdings Limited, a South African company listed on the JSE Limited, for ZAR1.16 per share, or approximately ZAR720 million ($115.2 million at the March 31, 2006 USD/ZAR exchange rate).
Comment and Outlook
Serge Belamant, Net1’s Chairman and Chief Executive Officer, stated, “I am very pleased with our strong quarter from both an operational and strategic perspective. During the third quarter more than 2.5 million grants with a value of $187.8 million were distributed through secure and convenient UEPS-enabled merchant locations, a 59% increase over last quarter. We also benefited from the shipment of products and services to SmartSwitch Namibia, which launched in February, and an acceleration in the delivery of equipment to Nedbank under their latest order.
“During the quarter we signed a new joint venture in Botswana,” Dr. Belamant continued, “which along with South Africa and Namibia creates an emerging bloc of countries using our UEPS technology. Additionally, we announced our planned acquisition of Prism, which I believe will make Net1 an even more dynamic company as we explore opportunities on the African continent and around the world.”
“Based on our performance over the first nine months of fiscal 2006, we reaffirm our guidance on earnings per share of $0.98 to $1.02 for the full year, assuming an exchange rate of ZAR6.50 to USD1.00," Dr. Belamant concluded.
Conference call
Net1 will host a conference call to review third quarter results on May 10, 2006 at 9:30 a.m EST. To participate in the call, dial 1-800-860-2442 (U.S. only), 1-866-519-5086 (Canada only), 0-800-917-7042 (U.K. only) or 0-800-200-648 (South Africa only) five minutes prior to the start of the call. The passcode is “Net1”. The call will also be webcast on the Net1 homepage, www.net1ueps.com. Please click on the webcast link at least 10 minutes prior to the call. A replay of the call may be accessed through the Net1 website through May 23, 2006.
About Net1 (www.net1ueps.com)
Net1 provides its universal electronic payment system, or UEPS, as an alternative payment system for the unbanked and under-banked populations of developing economies. The Company believes that it is the first company worldwide to implement a system that can enable the estimated four billion people who generally have limited or no access to a bank account to enter affordably into electronic transactions with each other, government agencies, employers, merchants and other financial service providers. To accomplish this, the Company has developed and deployed the UEPS. This system uses secure smart cards that operate in real-time but offline, unlike traditional payment systems offered by major banking institutions that require immediate access through a communications network to a centralized computer. This offline capability means that users of Net1’s system can enter into transactions at any time with other card holders in even the most remote areas so long as a portable offline smart card reader is available. In addition to payments and purchases, Net1’s system can be used for banking, health care management, international money transfers, voting and identification.
This announcement may contain forward-looking statements pursuant to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, implied or inferred by these forward-looking statements, such as product demand, market and customer acceptance, the effect of economic conditions, competition, pricing, development difficulties, foreign currency risks, costs of capital, the ability to consummate and integrate acquisitions, and other risks detailed in the Company’s SEC filings. The Company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events. |
Contact William Espley at Net1 Investor Relations at: |
Telephone:(604) 484-8750 |
Toll Free:1-866-412-NET1 (6381) |
NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Operations
Three months ended | Nine months ended | |||||||||||
March 31, | March 31, | |||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||
(In thousands, except per share data) | (In thousands, except per share data) | |||||||||||
REVENUE | $ | 54,584 | $ | 45,667 | $ | 147,900 $ | 134,885 | |||||
EXPENSE | ||||||||||||
Cost of goods sold, IT processing, servicing and support | 14,469 | 12,428 | 39,196 | 41,207 | ||||||||
General and administration(1) | 13,620 | 11,436 | 36,232 | 33,804 | ||||||||
Depreciation and amortization | 1,428 | 1,668 | 4,331 | 4,897 | ||||||||
Costs related to public offering and Nasdaq listing | 25 | - | 1,529 | - | ||||||||
OPERATING INCOME | 25,042 | 20,135 | 66,612 | 54,977 | ||||||||
INTEREST INCOME, net | 1,535 | 294 | 3,781 | 1,497 | ||||||||
INCOME BEFORE INCOME TAXES | 26,577 | 20,429 | 70,393 | 56,474 | ||||||||
INCOME TAX EXPENSE | 10,074 | 8,619 | 27,062 | 22,534 | ||||||||
NET INCOME FROM CONTINUING OPERATIONS | ||||||||||||
BEFORE EARNINGS FROM EQUITY ACCOUNTED | ||||||||||||
INVESTMENTS | 16,503 | 11,810 | 43,331 | 33,940 | ||||||||
EARNINGS FROM EQUITY ACCOUNTED | ||||||||||||
INVESTMENTS, net | 73 | 147 | 356 | 480 | ||||||||
NET INCOME | $ | 16,576 | $ | 11,957 | $ | 43,687 | $ | 34,420 | ||||
Net income per share | ||||||||||||
Basic earnings, in cents – common stock and linked units | 29.2 | 21.8 | 77.4 | 62.9 | ||||||||
Diluted earnings, in cents – common stock and linked units | 28.8 | 21.4 | 76.2 | 61.8 | ||||||||
The following weighted average number of shares was used to calculate: | ||||||||||||
Basic earnings – common stock and linked units | 56,670,580 | 54,700,393 | 56,442,066 | 54,700,393 | ||||||||
Diluted earnings – common stock and linked units | 57,592,554 | 55,870,344 | 57,343,816 | 55,707,240 |
(1) General and administration expense includes a stock compensation charge of $124,199 for the three and nine months ended March 31, 2006. |
NET 1 UEPS TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
Unaudited | (A) | |||||
March 31, | June 30, | |||||
2006 | 2005 | |||||
(In thousands, except share data) | ||||||
ASSETS | ||||||
CURRENT ASSETS | ||||||
Cash and cash equivalents | $ | 193,897 | $ | 107,749 | ||
Pre-funded social welfare grants receivable | 15,961 | 11,567 | ||||
Accounts receivable, net of allowances of – March $160; June: $0 | 24,000 | 15,293 | ||||
Finance loans receivable, net of allowances of – March: $3,652; June: $3,636 | 8,492 | 7,760 | ||||
Deferred expenditure on smart cards | 1,202 | 3,014 | ||||
Inventory | 2,930 | 1,927 | ||||
Deferred income taxes | 3,290 | 3,354 | ||||
Total current assets | 249,772 | 150,664 | ||||
LONG TERM RECEIVABLE | 1,108 | 969 | ||||
PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED | ||||||
DEPRECIATION OF – March: $24,353; June: $20,624 | 4,969 | 6,216 | ||||
EQUITY ACCOUNTED INVESTMENTS | 4,397 | 1,325 | ||||
GOODWILL | 15,242 | 14,636 | ||||
INTANGIBLE ASSETS, NET OF ACCUMULATED AMORTIZATION OF – | ||||||
March: $6,840; June: $4,919 | 6,587 | 7,944 | ||||
TOTAL ASSETS | 282,075 | 181,754 | ||||
LIABILITIES | ||||||
CURRENT LIABILITIES | ||||||
Accounts payable | 32,327 | 20,315 | ||||
Income taxes payable | 9,925 | 14,038 | ||||
Total current liabilities | 42,252 | 34,353 | ||||
DEFERRED INCOME TAXES | 17,738 | 10,399 | ||||
TOTAL LIABILITIES | 59,990 | 44,752 | ||||
SHAREHOLDERS’ EQUITY | ||||||
COMMON STOCK | ||||||
Authorized: 83,333,333 with $0.001 par value; | ||||||
Issued and outstanding shares - March: 48,009,788; June: 28,548,269 | 48 | 29 | ||||
SPECIAL CONVERTIBLE PREFERRED STOCK | ||||||
Authorized: 50,000,000 with $0.001 par value; | ||||||
Issued and outstanding shares - March: 8,660,792; June: 26,733,521 | 9 | 27 | ||||
B CLASS PREFERENCE SHARES | ||||||
Authorized: 330,000,000 with $0.001 par value; | ||||||
Issued and outstanding shares (net of shares held by the Company) - March: | ||||||
63,816,383; June: 196,983,841 | 10 | 31 | ||||
ADDITIONAL PAID-IN-CAPITAL | 104,323 | 71,960 | ||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | 16,367 | 7,314 | ||||
RETAINED EARNINGS | 101,328 | 57,641 | ||||
TOTAL SHAREHOLDERS’ EQUITY | 222,085 | 137,002 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 282,075 | $ | 181,754 | ||
(A) – amounts derived from audited financial statements |
NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
Three months ended | Nine months ended | |||||||||||
March 31, | March 31, | |||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||
(In thousands) | (In thousands) | |||||||||||
Cash flows from operating activities | ||||||||||||
Cash received from customers | $ | 25,724 | $ | 18,941 | $ | 135,763 | $ | 127,910 | ||||
Cash paid to suppliers and employees | (11,905 | ) | (21,365 | ) | (63,889 | ) | (81,864 | ) | ||||
Cash generated by operations | 13,819 | (2,424 | ) | 71,874 | 46,046 | |||||||
Interest received | 3,805 | 3,815 | 10,128 | 11,645 | ||||||||
Finance costs paid | (2,377 | ) | (3,517 | ) | (6,456 | ) | (10,131 | ) | ||||
Income taxes paid | (6,234 | ) | - | (24,309 | ) | (31,984 | ) | |||||
Net cash provided by (used in) operating activities (refer | ||||||||||||
to note 10) | 9,013 | (2,126 | ) | 51,237 | 15,576 | |||||||
Cash flows from investing activities | ||||||||||||
Capital expenditures | (315 | ) | (1,260 | ) | (1,203 | ) | (2,982 | ) | ||||
Proceeds from disposal of property, plant and equipment | 16 | 8 | 100 | 29 | ||||||||
Cash inflow from disposal of business | 10 | - | 10 | - | ||||||||
Acquisition of equity interest in and advance of loans to equity | ||||||||||||
accounted investment | (761 | ) | - | (2,612 | ) | - | ||||||
Net cash used in investing activities | (1,050 | ) | (1,252 | ) | (3,705 | ) | (2,953 | ) | ||||
Cash flows from financing activities | ||||||||||||
Proceeds from issue of share capital, net of share issue | ||||||||||||
expenses | - | - | 32,219 | - | ||||||||
Repayment of credit facilities | - | - | - | (19 | ) | |||||||
Net cash provided by (used in) financing activities | - | - | 32,219 | (19 | ) | |||||||
Effect of exchange rate changes on cash | 2,032 | (9,226 | ) | 6,397 | (174 | ) | ||||||
Net increase in cash and cash equivalents | 9,995 | (12,604 | ) | 86,148 | 12,430 | |||||||
Cash and cash equivalents – beginning of period | 183,902 | 105,316 | 107,749 | 80,282 | ||||||||
Cash and cash equivalents – end of period | $ | 193,897 | $ | 92,712 | $ | 193,897 | $ | 92,712 |
Net 1 UEPS Technologies, Inc.
Attachment A
Key metrics and statistics at and for the three and nine months ended March 31, 2006 and 2005:
Three months ended March 31, 2006 and 2005
Three | ||||||||||||||||||
months | ||||||||||||||||||
ended | ||||||||||||||||||
Three months ended | December | Year ended | ||||||||||||||||
March 31, | Change | 31 | June 30 | |||||||||||||||
Constant | ||||||||||||||||||
2006 | 2005 | Exchange | 2005 | 2005 | ||||||||||||||
US$ | US$ | Actual | Rate (1) | US$ | US$ | |||||||||||||
Key statement of operations data, in | ||||||||||||||||||
‘000, except EPS | ||||||||||||||||||
Revenue | $ | 54,584 | $ | 45,667 | 20% | 23% | $ | 47,429 | $ | 176,290 | ||||||||
Stock compensation charge | 124 | - | n/m | - | - | |||||||||||||
Operating income | 25,042 | 20,135 | 24% | 28% | 21,173 | 71,303 | ||||||||||||
Income tax expense | 10,074 | 8,619 | 17% | 20% | 8,577 | 29,666 | ||||||||||||
Net income | $ | 16,576 | $ | 11,957 | 39% | 42% | $ | 13,932 | $ | 44,562 | ||||||||
Earnings per share, in cents | ||||||||||||||||||
Basic | 29.2 | 21.8 | 34% | 37% | 24.6 | 81.4 | ||||||||||||
Diluted | 28.8 | 21.4 | 35% | 38% | 24.2 | 79.6 | ||||||||||||
Key segmental data, in ‘000, exceptmargins | ||||||||||||||||||
Revenue: | ||||||||||||||||||
Transaction-based activities | $ | 31,767 | $ | 26,683 | 19% | 22% | $ | 27,255 | $ | 103,653 | ||||||||
Smart card accounts | 9,570 | 9,157 | 5% | 7% | 8,744 | 34,931 | ||||||||||||
Financial services | 4,200 | 5,322 | (21)% | (19)% | 3,982 | 20,215 | ||||||||||||
Hardware, software and related | ||||||||||||||||||
technology sales | 9,047 | 4,505 | 101% | 106% | 7,448 | 17,491 | ||||||||||||
Total consolidated revenue | $ | 54,584 | $ | 45,667 | 20% | 23% | $ | 47,429 | $ | 176,290 | ||||||||
Consolidated operating income (loss): | ||||||||||||||||||
Transaction-based activities | $ | 16,428 | $ | 11,622 | 41% | 45% | $ | 13,517 | $ | 44,233 | ||||||||
Smart card accounts | 4,351 | 4,163 | 5% | 7% | 3,974 | 15,878 | ||||||||||||
Financial services | 1,782 | 2,836 | (37)% | (35)% | 1,828 | 9,316 | ||||||||||||
Hardware, software and related | ||||||||||||||||||
technology sales | 5,449 | 1,533 | 255% | 265% | 3,874 | 5,689 | ||||||||||||
Corporate/ Eliminations | (2,968 | ) | (19 | ) | n/m | n/m | (2,020 | ) | (3,813 | ) | ||||||||
Total operating income (loss) | $ | 25,042 | $ | 20,135 | 24% | 28% | $ | 21,173 | $ | 71,303 | ||||||||
Operating income margin (%) | ||||||||||||||||||
Transaction-based activities | 52% | 44% | 50% | 43% | ||||||||||||||
Smart card accounts | 45% | 45% | 45% | 45% | ||||||||||||||
Financial services | 42% | 53% | 46% | 46% | ||||||||||||||
Hardware, software and related | ||||||||||||||||||
technology sales | 60% | 34% | 52% | 33% | ||||||||||||||
Overall operating margin | 46% | 44% | 45% | 40% | ||||||||||||||
Mar. 31, | June 30, | |||||||||||||||||
2006 | 2005 | |||||||||||||||||
Key balance sheet data, in ‘000 | ||||||||||||||||||
Cash and cash equivalents | $ | 193,897 | $ | 107,749 | 80% | |||||||||||||
Total current assets | 249,772 | 150,664 | 66% | |||||||||||||||
Total assets | 282,075 | 181,754 | 55% | |||||||||||||||
Total current liabilities | 42,252 | 34,353 | 23% | |||||||||||||||
Total shareholders’ equity | $ | 222,085 | $ | 137,002 | 62% |
(1)– This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during the third quarter of fiscal 2006 also prevailed during the third quarter of fiscal 2005.
Three months ended March 31, 2006 and 2005 (continued)
Three | |||||||||||||||
months | |||||||||||||||
ended | |||||||||||||||
Three months ended | December | Year ended | |||||||||||||
March 31, | Change | 31 | June 30 | ||||||||||||
2006 | 2005 | 2005 | 2005 | ||||||||||||
Additional information: | |||||||||||||||
Transaction-based activities: | |||||||||||||||
Total number of grants paid: | |||||||||||||||
KwaZulu-Natal | 4,606,938 | 4,283,526 | 8% | 4,444,129 | 16,774,940 | ||||||||||
Limpopo | 2,832,121 | 2,693,793 | 5% | 2,753,537 | 10,635,232 | ||||||||||
North West | 801,524 | 789,504 | 2% | 787,009 | 3,153,868 | ||||||||||
Northern Cape | 401,712 | 361,818 | 11% | 396,750 | 1,459,264 | ||||||||||
Eastern Cape | 2,088,799 | 1,884,626 | 11% | 2,034,904 | 7,410,272 | ||||||||||
10,731,094 | 10,013,267 | 7% | 10,416,329 | 39,433,576 | |||||||||||
Average revenue per grant paid: | ZAR | ZAR | ZAR | ZAR | |||||||||||
KwaZulu-Natal | 20.19 | 17.07 | 18% | 20.67 | 17.85 | ||||||||||
Limpopo | 15.42 | 15.57 | (1)% | 15.59 | 15.34 | ||||||||||
North West | 17.23 | 16.34 | 5% | 17.21 | 16.43 | ||||||||||
Northern Cape | 18.84 | 19.43 | (3)% | 18.89 | 19.41 | ||||||||||
Eastern Cape | 11.98 | 12.35 | (3)% | 12.07 | 12.35 | ||||||||||
UEPS merchant acquiring system: | |||||||||||||||
Terminals installed at period end | 3,905 | 2,406 | 62% | 3,929 | 3,235 | ||||||||||
Number of participating retail | |||||||||||||||
locations at period end | 2,352 | 1,441 | 63% | 2,366 | 1,880 | ||||||||||
Value of transactions processed | |||||||||||||||
through POS devices during the | |||||||||||||||
quarter (in $ ’000) | 187,841 | 45,529 | n/m | 118,396 | 87,643 | ||||||||||
Value of transactions processed | |||||||||||||||
through POS devices during the | |||||||||||||||
completed pay cycles for the quarter | |||||||||||||||
(in $ ’000) | 171,022 | 44,433 | n/m | 127,765 | 85,408 | ||||||||||
Average number of grants processed | |||||||||||||||
per terminal during the quarter | 643 | 344 | n/m | 379 | 406 | ||||||||||
Average number of grants processed | |||||||||||||||
per terminal during the completed pay | |||||||||||||||
cycles for the quarter | 584 | 349 | n/m | 470 | 464 | ||||||||||
Smart card accounts: | |||||||||||||||
Total number of smart card accounts | 3,601,076 | 3,321,368 | 8% | 3,497,664 | 3,353,603 | ||||||||||
Hardware, software and related | |||||||||||||||
technology sales: | |||||||||||||||
Ad hoc significant hardware sales | |||||||||||||||
(US$ ‘000) | |||||||||||||||
Nedbank POS’s, pin pads, smart cards | |||||||||||||||
and other hardware | 4,400 | 2,700 | 63% | 3,400 | 10,400 | ||||||||||
Smartswitch Namibia hardware and | |||||||||||||||
software (before consolidation | |||||||||||||||
adjustments) | 1,200 | - | Nm | 1,500 | - | ||||||||||
Financial services: (US$ ‘000) | |||||||||||||||
Traditional microlending: | |||||||||||||||
Finance loans receivable – gross | 8,289 | 11,143 | (26)% | 8,318 | 7,212 | ||||||||||
Allowance for doubtful finance loans | |||||||||||||||
receivable | (3,652 | ) | (7,059 | ) | (48)% | (3,672 | ) | (3,636 | ) | ||||||
Finance loans receivable – net | 4,637 | 4,084 | 14% | 4,646 | 3,576 | ||||||||||
UEPS-based lending: | |||||||||||||||
Finance loans receivable –net and gross (i.e., no provisions) | 3,855 | 4,746 | (19)% | 5,732 | 4,184 | ||||||||||
nm– Statistic not meaningful |
Nine months ended March 31, 2006 and 2005
Nine months ended | Year ended | ||||||||||||||
March 31, | Change | June 30 | |||||||||||||
Constant | |||||||||||||||
2006 | 2005 | Exchange | 2005 | ||||||||||||
US$ | US$ | Actual | Rate (1) | US$ | |||||||||||
Key statement of operations data, in | |||||||||||||||
‘000, except EPS | |||||||||||||||
Revenue | $ | 147,900 | $ | 134,885 | 10% | 14% | $ | 176,290 | |||||||
Stock compensation charge | 124 | - | n/m | n/m | - | ||||||||||
Operating income | 66,612 | 54,977 | 21% | 26% | 71,303 | ||||||||||
Income tax expense | 27,062 | 22,534 | 20% | 25% | 29,666 | ||||||||||
Net income | $ | 43,687 | $ | 34,420 | 27% | 32% | $ | 44,562 | |||||||
Earnings per share, in cents | |||||||||||||||
Basic | 77.4 | 62.9 | 23% | 28% | 81.4 | ||||||||||
Diluted | 76.2 | 61.8 | 23% | 29% | 79.6 | ||||||||||
Key segmental data, in ‘000, except | |||||||||||||||
margins | |||||||||||||||
Revenue: | |||||||||||||||
Transaction-based activities | $ | 86,840 | $ | 77,538 | 12% | 17% | $ | 103,653 | |||||||
Smart card accounts | 26,866 | 26,362 | 2% | 6% | 34,931 | ||||||||||
Financial services | 12,456 | 15,642 | (20)% | (17)% | 20,215 | ||||||||||
Hardware, software and related | |||||||||||||||
technology sales | 21,738 | 15,343 | 42% | 48% | 17,491 | ||||||||||
Total consolidated revenue | $ | 147,900 | $ | 134,885 | 10% | 14% | $ | 176,290 | |||||||
Consolidated operating income (loss): | |||||||||||||||
Transaction-based activities | $ | 44,077 | $ | 31,629 | 39% | 45% | $ | 44,233 | |||||||
Smart card accounts | 12,212 | 11,983 | 2% | 6% | 15,878 | ||||||||||
Financial services | 5,454 | 7,579 | (28)% | (25)% | 9,316 | ||||||||||
Hardware, software and related | |||||||||||||||
technology sales | 13,390 | 5,803 | 131% | 140% | 5,689 | ||||||||||
Corporate/ Eliminations | (8,521 | ) | (2,017 | ) | 322% | 340% | (3,813 | ) | |||||||
Total operating income (loss) | $ | 66,612 | $ | 54,977 | 21% | 26% | $ | 71,303 | |||||||
Operating income margin (%) | |||||||||||||||
Transaction-based activities | 51% | 41% | 43% | ||||||||||||
Smart card accounts | 45% | 45% | 45% | ||||||||||||
Financial services | 44% | 48% | 46% | ||||||||||||
Hardware, software and related | |||||||||||||||
technology sales | 62% | 38% | 33% | ||||||||||||
Overall operating margin | 45% | 41% | 40% | ||||||||||||
Mar. 31, | June 30, | ||||||||||||||
2006 | 2005 | ||||||||||||||
Key balance sheet data, in ‘000 | |||||||||||||||
Cash and cash equivalents | $ | 193,897 | $ | 107,749 | 80% | ||||||||||
Total current assets | 249,772 | 150,664 | 66% | ||||||||||||
Total assets | 282,075 | 181,754 | 55% | ||||||||||||
Total current liabilities | 42,252 | 34,353 | 23% | ||||||||||||
Total shareholders’ equity | $ | 222,085 | $ | 137,002 | 62% |
(1)– This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during the nine months ended March 31, 2006 also prevailed during the nine months ended March 31, 2005.
Nine months ended March 31, 2006 and 2005 (continued)
Nine months ended | Year ended | |||||||||||
March 31, | Change | June 30 | ||||||||||
2006 | 2005 | 2005 | ||||||||||
Additional information: | ||||||||||||
Transaction-based activities: | ||||||||||||
Total number of grants paid: | ||||||||||||
KwaZulu-Natal | 13,359,432 | 12,494,917 | 7% | 16,774,940 | ||||||||
Limpopo | 8,279,826 | 8,012,425 | 3% | 10,635,232 | ||||||||
North West | 2,365,496 | 2,366,301 | (1)% | 3,153,868 | ||||||||
Northern Cape | 1,188,037 | 1,081,419 | 10% | 1,459,264 | ||||||||
Eastern Cape | 6,093,874 | 5,480,916 | 11% | 7,410,272 | ||||||||
31,286,665 | 29,435,978 | 6% | 39,433,576 | |||||||||
Average revenue per grant paid: | ZAR | ZAR | ZAR | |||||||||
KwaZulu-Natal | 20.04 | 18.11 | 11% | 17.85 | ||||||||
Limpopo | 15.38 | 15.25 | 1% | 15.34 | ||||||||
North West | 17.01 | 16.48 | 3% | 16.43 | ||||||||
Northern Cape | 18.92 | 19.47 | (3)% | 19.41 | ||||||||
Eastern Cape | 12.08 | 12.37 | (2)% | 12.35 | ||||||||
UEPS merchant acquiring system: | ||||||||||||
Terminals installed at period end | 3,905 | 2,406 | 62% | 3,235 | ||||||||
Number of participating retail | ||||||||||||
locations at period end | 2,352 | 1,441 | 63% | 1,880 | ||||||||
Value of transactions processed | ||||||||||||
through POS devices during the | ||||||||||||
quarter (in $ ’000) | 187,841 | 45,529 | n/m | 87,643 | ||||||||
Value of transactions processed | ||||||||||||
through POS devices during the | ||||||||||||
completed pay cycles for the quarter | ||||||||||||
(in $ ’000) | 171,022 | 44,433 | n/m | 85,408 | ||||||||
Average number of grants processed | ||||||||||||
per terminal during the quarter | 643 | 344 | n/m | 406 | ||||||||
Average number of grants processed | ||||||||||||
per terminal during the completed pay | ||||||||||||
cycles for the quarter | 584 | 349 | n/m | 464 | ||||||||
Smart card accounts: | ||||||||||||
Total number of smart card accounts | 3,601,076 | 3,321,368 | 8% | 3,353,603 | ||||||||
Hardware, software and relatedtechnology sales: | ||||||||||||
Ad hoc significant hardware sales | ||||||||||||
(US$ ‘000) | ||||||||||||
Nedbank POS’s, pin pads, smart cards | ||||||||||||
and other hardware | 10,900 | 10,400 | 5% | 10,400 | ||||||||
Smartswitch Namibia hardware and | ||||||||||||
software (before consolidation | ||||||||||||
adjustments) | 3,900 | - | nm | - | ||||||||
Financial services: (US$ ‘000) | ||||||||||||
Traditional microlending: | ||||||||||||
Finance loans receivable – gross | 8,289 | 11,143 | (26)% | 7,212 | ||||||||
Allowance for doubtful finance loans | ||||||||||||
receivable | (3,652 | ) | (7,059 | ) | (48)% | (3,636 | ) | |||||
Finance loans receivable – net | 4,637 | 4,084 | 14% | 3,576 | ||||||||
UEPS-based lending: | ||||||||||||
Finance loans receivable –net and | ||||||||||||
gross (i.e., no provisions) | 3,855 | 4,746 | (19)% | 4,184 | ||||||||
nm– Statistic not meaningful |