Lesaka Technologies Inc (LSAK) 2005 Q4 法說會逐字稿

Good morning to our colleagues and investors in the United States and good afternoon to the South African investors as well as the European investors. As you probably are aware, this is the first opportunity that we have had as a newly listed NASDAQ company to speak with our investors and present our financial year-end results. So what I am going to start by doing is to perhaps explain to you the way that I believe I should go about doing this particular task because in my view it is something that will possibly allow you to understand better our business model, our strategy for the future and therefore to make a better evaluation yourselves as to the performance of the company.

To kick off, I would like to say that I personally and I think our management is extremely proud of what we have achieved over the last 12 months. Not only from a fiscal point of view, which Herman will be taking you through in the near future, but specifically because as a South African company two years ago listed on the Johannesburg Stock Exchange we have now managed to join what we would call the big league by now being listed on the NASDAQ, which to us was absolutely fundamental to becoming a worldwide company and to extend our business plan from South Africa to Africa and to the rest of the continent.

This particular task was not simple. Not only did we have a number of restrictions within South Africa that made it very difficult to achieve this goal, but more importantly we had to fall in with a number of regulations, which obviously come together with being a NASDAQ listed company and governed by the SEC. Two of which you see the U.S. GAAP standards, which I believe together with our auditing firm we have managed to actually adhere to extremely well and understand now much better than ever before. But secondly, we also had to meet the Sarbanes-Oxley corporate governance standards, which somehow were a little bit different to what we were used to in South Africa, vis-à-vis what we call our King I and King II standards.

We have managed to do that as an accelerated filer, which means we had a very, very short amount of time to actually achieve it and we're very proud to say that we have managed to do that without any great hurdles or any real barriers to actually stop us from going forward. Now from that point of view, I am very happy to say that we have restructured our group in such a way that we will be able in the future to carry out these duties as some things are going to be invoked with each one of our businesses and therefore will come out automatically out of the processes that we have now redefined to insure that less and less management time is in fact spent on administrative issues.

More importantly to investors is to try to understand financially what have we done over the last 12 months and what we intend to in the next 12 months. Now this particular question I would like to answer two ways. One, I think we have to understand that our business can be divided into two parts. The first part is the business we have had for quite awhile. It's the business we continue to grow. It's a business which is very much South African based and it is the business that we continuously expand utilizing the same customer base but allowing us to introduce new products which gives us better margins.

Now first let's talk a little bit about this business. The South African business, as you know, is mainly based at the moment on our penetration into the social welfare grant distribution, which we do on behalf of the South African government in five out of the nine provinces in South Africa. Now today we pay in excess of 3.4 million people on a month-to-month basis and obviously 3.4 million people can generate a huge amount of revenue for our company. More importantly, the business model that we have adapted allows us to migrate a huge amount of these people across to our new merchant acquiring program that we started around nine months ago, nine, 10 months ago and by migrating these pensioners into our merchant acquiring program we achieve two financial things. The first is that we reduced the cost of distributing cash. The second is that we create that cost savings into a new income stream by generating fees out of the merchants that now provide the service. That's the fundamental or one of the fundamental why our margins keep on growing in South Africa and in our view will continue to grow until we have reached what we would name or what we would call a saturation in merchant acquiring.

Now what do we call saturation? One has to understand that South Africa's provinces are two types. Some are extremely rural, meaning there's little or no infrastructure. Others are more urban or semiurban where there is a litte infrastructure but certainly you do not find infrastructures even in those areas that you would find in Johannesburg or Cape Town, which are some of our top cities. What does this imply? This implies that in the deep rural areas there are no merchants because there is nothing. There is no water; there is no electricity. Now in that particular environment, we will continue to use our mobile vehicles to actually drive and service our pensioners and servicing means that we will be able to distribute to them cash, number one, but also to be able to continue to distribute to them financial services. Financial services from loans, insurance policies, medical aid schemes, money transfers or any other financial product that we can supply today from prepaid electricity to pay prepaid water.

Now in those environments it is unlikely that we will be able to save any costs from an operational point of view simply because we will have to continue to visit this environment and to continue to disperse cash. However, any product which will now be sold to the pensioner base in those environments will obviously be debited electronically from the smart card and only the balance will be paid in cash, which means a bonus that the company will gain is that we will have to transport and we will have to distribute less cash as more and more pensioners utilize our financial product. The net results of that will be that we will have an increase in our margins simply because our cost structure is of such a nature that cash management, cash distribution is one of the hardest components of our operations today.

When we move into the more let's call them semirural or semiurban areas are pensioners will then have the facility to not only buy financial products but also to be able to use a card to actually purchase goods and services in merchant stores. Now our model in merchant stores basically converts a merchant into an extension of our own company allowing each merchant to generate fees themselves out of selling our own financial products or financial products of others that are going to be sold through our smart card channel. The reason why the merchant acquiring program has been successful is exactly for that reason. Because merchants, unlike traditional banking systems today where a merchant simply pays a fee to a bank in order for a card to be accepted, can convert what today is a cost into an income stream for their own benefit. Now that is the reason why merchants have been coming onto our system at the huge rate of momentum.

You probably will remember looking at some of our figures that in fact until June of this year, which is over the last nine months, we had already installed in excess of 3.5 or 3.2, 3.3 thousand terminals and more than 1880 different stores. Now I did mention this on the roadshow once or twice that people tend to ask the question but it doesn't sound like a lot of terminals or a lot of stores for so many people. Now the answer is very simple. The more you move into rural areas, the more people live there but the less shops or the less outlets there are. So a typical average amount of card being used in the terminal can exceed 3000 while the typical average amount of card that is used is the typical Visa or MasterCard type of terminal can be 23. So by definition, we can require anything up to 100 of the infrastructure in order to service our pensioners in rural areas that would be required to service the same amount of people in an urban type of area. So this is why the numbers of terminals, the number of merchants, do not look very high but the amount of cash or the amount of transaction that are being performed through these terminals is actually going up at a huge, huge rate.

For example we have moved -- if we look simply at the fourth quarter, we did in excess of $87 million through merchant acquiring compared to the previous quarter of about $45 million. So it's sort of doubled in a matter of three months and we continue to maintain this momentum. In fact I think I did mention on the roadshow that our typical growth is around a 10 to 11% per month is what we continue to sustain. So the growth in merchant acquiring has been absolutely exorbitant. We know at the end of June we had processed in excess of 500,000 people that were actually moving through our merchant stores and we believe that that number will actually be well, well beaten by the end of this first quarter of 2006. So we're very, very excited about this simply because merchant acquiring does not only reduce our infrastructure that we have at formal paypoints but it also certainly generates an income stream of around 0.75% (ph) on average of every transaction that occurs within a merchant.

As I mentioned before, the reason why merchants tend to like it as well is because the cost for them to deposit cash normally exceeds the 0.75% (ph) that we charge for them to actually facilitate cash withdrawal as well as sales to the majority of our clients.

If we move now a little bit more into -- still within South Africa in terms of the penetration that we are now moving into, which is really to tackle the people that are unbanked but today are employed, which is quite different to pension and welfare. Now that particular model we are starting to penetrate and we started in the following areas of South Africa. Many, many millions of people are employed either on a full-time or part-time basis but of course being paid in cash, this creates a huge amount of problems, exactly the same problems we have in pension and welfare in terms of cash management, cash transportation, insurance, fraud, etc., etc. We remove this problem on behalf of employers and therefore bank, for lack of a better word, the employees onto our card and offer them a realm of financial services at costs, which are substantially less than what they can actually have or obtain today. We have already moved into this area into something like 11 farms. The obviously have kicked off this project about four or five months ago and this is a project that I believe is going in time to actually equal if not overtake in terms of cost revenue as well as profitability specifically what we are making today out of the pension and welfare business.

The simple reason for that is that obviously employed people earn an average of two sometimes to three, four, or even five times what a particular pensioner would earn. 700 rand versus 2.5 or 3000 rand a month. Now the reason why this makes a difference is because employed people that are being paid in cash would therefore be able to actually subscribe to far more of our financial products and obviously for example insurance policies that they might decide to undertake might be far higher in terms of value than what the pensioner could afford. So by definition, a debit or fees go up, obviously our percentages that we get out of, for example, selling an insurance policy would obviously go up and obviously the amount of money that those people would be able to sell or to spend in merchant acquiring environment would be greater. Therefore 0.75% of the greater number would generate larger profits. So for us, we know that an employed individual that is earning two to three times as to the pensioner can sometimes generate three to four times more income for our side than in fact the pensioner themselves.

So this is going to be the focus of 2006 from our South African operations. It's not only to maintain our growth on pensioners but also to penetrate because of our merchant acquiring to penetrate the earners that are being paid in cash, very mainly an issue in rural areas were we already have infrastructure.

Now outside of the South African context, which in our view is what is really exciting about our company and the reason why we listed on the NASDAQ in first place and the reason why we wanted a huge base of U.S. investors and European investors, is what we believe we can achieve on the worldwide basis. South Africa for us is a business that continues to grow at 20, 25% per annum. It is a business that proves that our business model works. It's our business model is acceptable and it's our business model can continue to generate very, very good bottom line for our company and continue to actually improve the margins as and when we launch new products on top of the same infrastructure. So we're very excited about that.

But the South African model is purely a model that we believe we can export and launch in many other countries around the world. This is what is exciting about the company Net1. If we cannot achieve to do that on the worldwide basis, while investors made a good investment in South Africa but certainly would not have made the investment it actually deserves. Now as far as we're concerned, we believe that even still this year we will be making a number of announcements that is going to show that the model in South Africa will and can be exported elsewhere. Initially in Africa and I know that many of you have mentioned to me many times well we know you can do it in Africa but can you do it somewhere outside of the continent? We obviously are working on doing it outside of the continent as well. To be quite honest, right now we have been taking a little bit of a break after the NASDAQ Sarbanes-Oxley and U.S. GAAP and simply finalizing all the administrative issues that we had to finalize last year.

We have also talked to a lot of our investors that we needed to restructure our international operation in such a way to be able to penetrate countries in parallel rather than one at a time, which was the model that we used to use in the past before we became a NASDAQ listed company. Now this is something we are busy working furiously on and we believe that already we're seeing some signs that there are far more people phoning us that are interested in our model than we had for example three or four months ago. This is not only due I believe to the fact that we have restructured some of the company but also because some of our shareholders, which come from the United States and Europe, have already been able to open some doors for us to introduce our technology and already believe that the fact that we were listed on the NASDAQ has already born some fruit whereby we are already better known now than what we were three to six months ago. So things in my view are going in the right direction and we really strongly believe that in the next twelve months we will have achieved most of the things, if not all of the things, that I certainly spoke about from the roadshow, vis-à-vis South Africa in terms of its growth, certainly vis-à-vis our market penetration within Africa and we are definitely hoping to have won some contract outside of the African continent.

I know that a lot of people pressurize us in terms of where would be that continent and some of you might have worked out where it could come from. I'm not unfortunately at liberty to mention it. All I can say is that we're working furiously at being able to achieve that during the next twelve months of operation and it was until the end of our financial year of June 2006. So from that point of view, I believe that we're fully on track and I think it will be worthwhile watching the space because we tend to make as many announcements as we possibly can as we go forward.

Now a lot of people have also mentioned to us what guidance can we possibly tell our investors in terms of going forward? Now that is something new for us because in South Africa it was something that you could simply not do. Now we understand why guidance is important. On the other hand, we also understand that some research has been conducted on our company and we believe that a number of analysts that we have been speaking to have come out with some research, which they have published, and I'm very, very proud to say that some of these analysts have done an incredible job of really dissecting and analyzing our company to really the nth degree. I'm not going to mention any names but I'm sure you will be able to see from the research who those people are.

Now obviously when one reads their reports, it is important to understand that they are attempting to understand the business model the way we do but it is almost impossible for them to perhaps understand it with the color and the fashion that we have. So I think if one basis, whatever we are going to perform in the next year or two on what these analysts are saying, one thing I know for sure is that they should be able to represent what I would call is the worst-case scenario. So I really believe that although they have been very conservative and by the way we're pretty conservative ourselves in nature, we do not like to talk about things that we have not signed and delivered and normally we do not talk about them unless we have the money in the bank. That is the way we have always been. Now at the end of the day, I think if one follow these particular analysts research, one will get a very good feel because I haven't seen too many things that they have written, which is either incorrect or where the focus, is actually not correct as well. They seem to be understanding very clearly where our strengths are and they also seem to understand very clearly where the market potential is going to come from and where the potential of this company can grow if we can actually export our business model in some other places in the world.

I know that Herman will talk a little bit about giving some sort of guidance and I have heard that some of the guidance was around between I think -- what was it, Herman? Between about -- up to about $0.98 in the next twelve months. Now that's a number that I believe we can certainly achieve otherwise we would never have published it. What I am going to be monitoring is something a little bit different. What I'm going to be monitoring myself is -- and I will enumerate these for you -- one is over the next twelve months, the growth in our pensioner numbers. That's number one.

Two, I will be monitoring the change in the amount of grants or the value of the grant that is distributed. Why? Because very often we get paid on a percentage.

Three, I will be monitoring the penetration of merchant acquiring and the take up of our pensioners to merchant acquiring because I know that this results directly in higher margins.

Four, I will be monitoring the success of selling our financial products within our pensioner base and to see for example our loan insurance policies and medical products can sell.

Five, I will be monitoring the take up of the number of people that are coming onto our system who are non-pensioners and who are unbanked individuals.

Six, I will be monitoring the number of countries outside of South Africa that have decided to actually implement our system in such a way that we retain a minimum of 35 to 50% equity to implement the same business model as we have in South Africa today.

And seven, I think it is seven, I will be monitoring our success outside of the African continent, vis-à-vis trying to tackle or export our model in the countries or in a continent which is different from the point of view of language, from the point of view of demographics but certainly very similar from the point of view of poverty and people that are unbanked.

Now these will be the sort of metrics that certainly as management we are going to be focusing on over the next twelve months. Those metrics are the ones that are going to drive this business from where we are today to a company that hopefully will be two or three times the size in the next couple of years. This is really the goal of what we want to try to achieve. Either we will be successful in which case this company will fly or we will become static and the company will continue to growth but it will grow at the pace that will continue to slow down. These are the things that I will be monitoring as the CEO of this particular company and if at any stage I believe that we're not going to be achieving the targets that I have spoken about I will make sure that everybody knows about it because there must be a reason for it and if we cannot find a way to actually get back onto track we will also make sure that everybody knows about. Because after all, we are looking after your money at the end of the day. So if anybody deserves to know what we're doing and why we're doing it, you as the investors of this particular company deserve to know first and foremost.

Now before I hand it over to Herman that is going to give you more factual information, vis-à-vis the actual numbers themselves, you will note that coming from South Africa at the moment there are number of numbers which unfortunately get distorted. Those numbers involved exchange rates, which I think we all understand but sometimes we do not understand how erratic those can be. Number two, we also are talking about the fact that for the last two years we have been going through a number of restructurings, restructuring that has involved huge sums of money to be paid to underwriters, lawyers, accountants, etc., etc. and therefore I think these are things that in South Africa we used to call non-recurrable expenses and we had a concept here called headline earning whereby you could actually tell your investors what the figures would look like going forward if you had to remove these particular expenses that in any case can only occur on a one-to-one basis.

Why I'm mentioning these things is because this isn't a game to try to convince you that the company is growing at the rate that it isn't growing at. It's to try to give you as much information as possible so you can remove any what I would call abnormalities that will then give you a properly defined statistical growth rate without suddenly saying well she is this year with a 200% more than last year because last year we actually had $20 million worth of expenses that we know we're not going to have this year. I think it's important that if at any stage, anyone of you do not understand some of the financials, do not understand one-off expenses and want to understand better what the statistical growth of this company is outside of what the accounting numbers are telling you then obviously please let us know and we will make sure we do a publication that will make sure that it is much clearer than perhaps what it is today or what it might even appear to be in the 10-K.

So because of this, as we move forward at and we internationalize the company, we know that this currency issue is going to show its head over and over again because every country by definition will be running a different currency. Now in a way it's not so bad because it is like a natural hedge because one currency might hedge the other. But at the end of the day it is something we have to understand is that a majority of our business is going to come out of developing countries with developing economies, which means it is unlikely that the joint ventures that we're likely to put together in these countries are in fact going to be generating dollar income. They are going to be generating local currency income that will have to be converted into U.S. dollars. And it is something we're going to work very hard at making sure in our financials specifically in our MD&A, which gives us a little more freedom to understand to actually explain what management thinks rather than what GAAP things to be able to be clearer in terms of the way we are going when we have taken all these other elements out of the equation.

To conclude, and we will be asking for questions and answering questions of now, I would like to say that I am very, very happy with our performance this year. Very happy that we have managed to accomplish all the things that we have done, like the NASDAQ, like the corporate governance and the SOX. Like the U.S. GAAP, but on top of this, we thought dropping the ball and continuously growing the company to an extent, if I remember correctly the bottom line was around 27%, which I think is a phenomenal growth when one looks at the rest of the work that in fact was actually performed.

To conclude, I am very confident that this company will continue to grow in the next twelve months and I still believe wholeheartedly that the business plan that I've described in the roadshow specifically can be achieved and can be achieved at the momentum that I spoke about. So thank you for your attention and I'll hand over now to Herman that is going to take you through the financials in more detail. Thank you for your time.

Thank you, Serge. First of all, I would like to explain and apologize to our investors for the later publication of the press release as well as the 10-K than what we had anticipated. Originally we had envisioned for this to happen yesterday evening after the close of the market in New York but you will appreciate that we are the first South African domestic U.S. filer filing from this country and we ran into some logistical problems specifically in our planning to relevant content letters but I'm glad to report that that has all been sorted out and that the 10-K itself has been filed just after we commenced with this conference call. So for those of you who haven't had the benefit of properly analyzing and looking at the numbers, my apologies but I will briefly take you over the salient features and just point out the few of the more important statistics and ratios that (indiscernible) the annual results for the last 12 months. And where appropriate, we will also just touch on the fourth-quarter performance.

Overall, our revenues for the year grew to $176.3 million or 35%. In dollar terms and again just to reiterate what Serge has said, please bear in mind that there was a fairly strong appreciation of the South African rand against the U.S. dollar during the year under review. So the real growth rate in terms of rand-to-rand comparison is actually 22% as compared to the 34% in U.S. dollar terms. The revenue up to $176 million and for the quarter to $41.4 million, which is the fastest (indiscernible) increase from the fourth quarter last year.

From an earnings point of view, the net annual income for the 2005 whole year was $44.6 million. That being an increase of 236% in dollar terms over the previous year and 210% in rand terms over the previous year. Primarily the reason for this increase is that we have included in last year's numbers a fairly sizable chunk of the reorganization costs amounting to some $15 million, which obviously had a tremendous impact on the earnings last year as well as the earnings per share numbers last year. If one had to ignore, as Serge has stated, those specific one off charges and again in the current financial year, we had some costs relating to the public offering and the NASDAQ listing amounting to $1.8 million, the earnings per share on a constant currency basis would have grown by 27%. And that for us is probably a fair indicator of what the real growth rate has been. That's computing the earnings per share on a constant share basis. In other words we used the same denominator of all shares at issue. We removed the non-recurring items and we equalize the exchange rate to a current constant currency rate. So those are really the salient features of the year under review.

Now a few of the highlights that are reflected by these numbers is one, the conclusion of our contract with NASDAQ in the past financial year, which added approximately $10 million in revenue at a fairly high profitability ratio. Please bear in mind when you look at these numbers and then we analyze them going forward that those revenues were recorded in the first, second and third quarters of the current financial year. The fourth quarter therefore has none of this one off (indiscernible) revenue in it and this is just something that we have got to bear in mind going forward when we try to establish what the revenue growth will be.

The second really important issue that we can see reflected in the financials is that the growth in the operating profit margin has gone from 27% to around 40% and again one has to take into account the fact that we had some reorganization charges last year, which lowered that significantly. But overall, at 40%, we believe that we are approaching the sort of profit and operating profit rates that we would like to sustain and grow on going forward.

If we look at our segmental analyses briefly and just again on a revenue and operating profit basis, we have our four normal segments being transaction based activity, smart card accounts, financial services and then the corporate reorganization segment. Firstly and obviously most importantly, the transaction based activity segment. We recorded an increase in the revenues of the segment of 19% for the year and that's in dollar terms; 9% in rand terms. Most of the growth in the segment has been driven by a growth in the number of beneficiaries that we paid during the year under review, now special welfare business. That number just in terms of the number of payments year-on-year in 2004 we did 53.4 million payments to beneficiaries. That compares to 39.4 million during the 2005 fiscal year.

Most of the growth in those statistic areas have come from the Eastern Cape where in the 2004 year we were not fully operational in the first half of that specific year. So 2005 really reflects the first year of full operation and ability in the Eastern Cape Province. And there was also some growth in the KwaZulu-Natal Province, which is the most populous Province in South Africa and we have seen traditionally a fairly high rate of growth specifically in the South Province.

The second thing which is very important when looking at the financial services or rather the transaction based segment and again looking at the operating profit margins that have been improved quite substantially is that the contribution of our merchant acquiring project is now becoming a tangible contribution and it is starting to contribute to the growth in the operating profit margin numbers and, as Serge mentioned before, the metrics that we measure and that we also reflect in the 10-K revolve around the number of point-of-sale devices installed, the value of transactions processed through these devices and also the number of beneficiaries that migrate from the paypoints to the merchant infrastructure.

And just to give you an update on what those numbers are. Serge gave you a quick summary of that earlier on but in dollar terms, we processed $87.6 million worth of transactions in the fourth quarter of 2005. That compared to $45 million in the third quarter. We had 829 devices installed in the fourth quarter alone to give us a total of 3235 devices. And the value of transactions overall processed for the year came to $147 million or just under one billion rand from when we commenced in June last year. And we obviously feel that this has contributed significantly in terms of improving our operating efficiencies in this specific segment.

If we briefly touch on the smart card account statement, for those of you who we saw on the roadshow you will recall that this segment reflects really the growth in the number of beneficiaries that we have and during the year under review, as I mentioned before, that number of beneficiaries primarily increased in the Eastern Cape and in the KwaZulu-Natal provinces. We have at the end of the financial year we have approximately 3.3 thousand (indiscernible) beneficiaries that we service to our infrastructure and that compares to just over 49 (ph) million beneficiaries in the year before. But the smart card account doesn't really reflect the growth in that specific area. The operating profit for the segment remains constant at the 45% level.

The financial services segment is something which is quite difficult to analyze because it is comprised of something that has both got an annuity component to it as well as a business that isn't necessarily annuitized and maybe later just to elaborate on that again for a minute or two. We have our traditional (indiscernible) finance business, which is an annuity business focusing on traditional 50 day loans. It is not a business that we are aggressively growing and we expect that our intention is not to do so over the last three or four years. So the book in our financial services business is steadily declining but the contribution in terms of profitability remains more at sustained levels.

One of the things that you will see clearly from the 10-K is that we performed an (indiscernible) exercise during the 2005 financial year where we actually applied our provision for (indiscernible) against the growth book. So you will notice the growth book has declined, the provisioning level has declined but the net book number remains the same or a little bit less than what it was in the prior financial year.

The second business is our UEPS based lending business. The UEPS based lending business is the component that isn't necessarily annuity based because this is where we provide our card holders with the ability to refinance their existing 50 day traditional micro loan that are typically given to them at exorbitant interest rates and really sets them into a debt spiral. This business is not annuity based because we -- the intention of us providing these loans is for our card holders to become debt free as this typically takes a period of six months and we find that once we have assisted them to escape the debt spiral they are not that keen to come back and to take another loan. That happens later on typically for smaller amounts than they need them for specific uses but it is not something that revolves or repeats itself like a normal lending book.

The last segment from an operational point of view being the hardware/software and related technology sales segment for the past financial year obviously looks pretty impressive. That mainly because of the contribution from the point-of-sales -- sales to Nedbank over the last financial year and so the federal consolidated operating income for this specific segment, up 214% in rand terms, again would have cautioned going forward this is a once off type sale and we do not anticipate sales of this nature to recur on an annual basis.

Included in the final segment, which in corporate elimination obviously we have the costs associated with head office. No major changes there with the exception of course of the reorganization charges last year as well as the cost relating to the NASDAQ business in the current financial year. So that is just a short overview of our income statement. Maybe if I could just quickly touch on the balance sheet and at the same time talk about the cash-flow statement. The group remains strongly cash degenerative as it has in the past. There are a few cash outflows over the last financial year, which will immediately draw your attention but overall cash generated by operations -- in other words, really the cash conversion ratio before interest finance cost and income taxes, increased from $50 million in the year before to $73 million for the 2005 fiscal year. After taking into account interest finance cost and income taxes, we generated $38 million worth of cash during the current financial year or 2005 as opposed to $41 million the year before.

The major reason for that slight decrease is because we had to pay approximately $10 million in transaction taxes related to the reorganization the year before in the current fiscal year.

Moving on from the cash generation abilities of the group maybe just into the balance sheet. Obviously the most important single item in the balance sheet would be the cash and cash equivalents line. That is now at the end of June at $107 million. Most of the other line items on the asset side have remained fairly static with the exception of the accounts receivable line that has gone up from 18 million to $26 million and that again mainly the result of prefunding obligations that we have in the various provinces. And maybe just allow me to elaborate slightly on that because this is something that we will see in every quarter going forward.

We have no control over the payment cycles. Those are dictated by government. So most of the time we now find that we commence payment in all of our provinces to our beneficiaries one or two days before the commencement of the calendar month. Now that unfortunately runs into the end of our quarter, which means that we have to prefund in KwaZulu-Natal and the Eastern Cape a big chunk of money and that obviously has been reflected as a receivable rather than a cash or a cash equivalent. And so we will continue to see a bit of an erratic movement around the accounts receivable and cash line over quarter end. But we will endeavor to provide you with the sufficient detail for you to make the necessary adjustments as far as that is concerned on a quarterly basis.

Inventory you will see has almost doubled not really so material from 1 to $2 million mainly as a result of us acquiring a number of point-of-sale terminals in stock really for rollout to our merchant acquiring program. That is also the main reason why our property plant and equipment numbers in terms of CapEx has gone up as we push these point-of-sale terminals into the retailers and we typically rent them so they still belong to us. The asset is moved from inventory to property plant and equipment and that is what happened in the past fiscal year.

On the liability side there is not a lot to say other than the accounts payable is fairly static and the income taxes payable line has come down quite substantially because the transaction taxes payable as a result of the reorganization last year were settled in the first half of the current fiscal year.

So that is an overview of the balance sheet and then just finally a short look -- maybe discussion on the statement of changes in shareholder's equity, not a lot has happened yet during the year under review. There were no real issues of stock other than stock issues in terms of the stock incentive plan, but again not a material in amount and the only real movement reflected on the schedule being the recent earnings increase and obviously the movement in the foreign currency translation reserve, which in the last financial year amounted to approximately $7.7 million.

So that is just my short comments. I'm sure that those of you who have had the opportunity to look at these numbers have some questions. So I will just ask our conference host to instruct you as to how to enter the queue for the question-and-answer session.

(OPERATOR INSTRUCTIONS). David Togut, Morgan Stanley.

Thank you and good afternoon, Serge and Herman. I have three questions. First, Serge, if you could update us on the transition from provincial management of the Social Security Administration to the national level and more particularly what impact do you expect that to have on beneficiary growth in the year ahead.

Do you want me to answer one at a time, David?

Yes. Thank you.

As we are all aware in South Africa there is a new central social security agency called SASSA, South African Social Security Agency, that has been created by government. And the concept that has been created by this agency was to really do a number of things. Number one was to ensure that all payments of beneficiaries or grant distribution would be controlled through that agency. This was to ensure that in fact provincial government that used to have in the past would not be able in any sort of formal shape to be able to utilize the social agencies' budget for other tasks except for the payment of social welfare. Very, very important in a country where we have a huge amount of poor, poor people.

The second objective was for the central agency to reduce the cost of managing social welfare in South Africa. Now obviously the cost comes from different areas. The first part of the cost is obviously the registrations of grants and ensuring that the people that register for grants are in fact supposed to be getting a grant to eliminate those people -- in other words, people that are claiming grants but in fact do not exist and to really eradicate fraud in its totality. And I think Dr. Skweyiya, our minister of welfare has been extremely verbose in the press and in fact stating that one of the focal areas of SASSA would be to eliminate fraud in every possible way that they can think of. So this consolidation that SASSA has got to commence means that they have got to try to rebuild from each of the provinces a central group of people that they have got to select and account for them to be able to, according to the norms and standards document that was published in South Africa to be able to actually manage pension and welfare as a whole.

Now there are two issues here. One, it is a task which is a huge monumental task simply because consolidation is like almost a big company in government buying nine different companies in nine different provinces and putting them together, deciding on who is going to manage this new particular group and then actually ensuring that the cultural differences between these nine particular companies can now be normalized. It's a huge task for SASSA and for of course the managing director. Now that is something that we believe is going to take a little while for them to stabilize. Probably in my view if they can manage that task in the next year to 18 months, they will have done incredibly well to become effective.

Now in terms of the payment contractors, which are really as we know two really main companies; ourselves and our competitors can all pay (ph). Today, apart from looking at obviously trying to shrink our profit margins, which is something that government has the right to do and should do as running a business, it is unlikely that they are likely to spend a good amount of time and effort focusing on something that is working. They would rather focus in my view on integrating pension and welfare across the nine provinces through the SASSA rather than to worry about doing something that has been done reasonably well, in our view extremely well, for example the payment of social grants.

Now we know however that there are a number of contracts from different contractors that are going to expire. And we believe that in the very, very near future there will be at least one, maybe two, contractors that are going to go to (indiscernible) for SASSA to try out for lack of a better word a new formula in which they believe that payment of grants should actually be performed. And that is something that we believe will occur in the next -- maybe in the next month or should come out in the next month. That is both an opportunity and a risk for us. We believe it's an opportunity because we believe our system is far more superior in the country than our competitors simply because we offer an (indiscernible) solution rather than purely a dispensation of cash, which is really what our competitors are doing.

It is a risk because by definition when you are entering any game that has got new rules, well in theory anybody can actually enter the game and actually beat you at it. Now we actually welcome that particular risk simply because we believe that once all provinces are actually managed through SASSA, we also believe that SASSA will have only one goal in mind and that in fact will be to deliver the best possible service to the majority of people at the lowest possible cost. And we believe that we are structured in the country to be able to achieve that better than anyone else.

Thanks. And more specifically, Serge, what impact would you expect there to be on beneficiary growth as SASSA and the provinces go through this transition?

Well, we're hoping two things, David. One of them is that government has obviously already indicated that they want to increase the number of beneficiaries from around 9 million to maybe 10, 11, 12 up to 15 million beneficiaries. Specifically with child grants because they want to increase the age to 18. Now that is something they are not going to do over a period of three months. They're going to do it over a period of a couple of years. But as they are doing it over a couple of years, by definition today, if we have 45% of the market, there is no reason why we shouldn't pick up a minimum of 45% of all new beneficiaries. So if there are two or three more million people, we should pick up 45% of two or three million people. On top of it of course if a new tender goes out and it is a tender that we don't already have then I think we have a better chance than average to actually get this particular tender. And most of the provinces where we are not today, you're looking at about 500,000 people per province, five to six or 700,000 people per province. We believe that with a little bit of management, a little bit of luck, that if these particular tenders go up or come out we should be able to increase our number of pensioners over the next twelve months to 18 months substantially.

You referred to this in your comments, but more specifically what is the timeline for the award of the expected Mpumalanga tender?

David, again, that is an extremely good question and we know that with government -- remember SASSA is a brand-new agency, which means they are going to make very, very sure that before they even go out to tender that the tendered document is 100% in line with all the regulations of SASSA as well as the regulations of the country. And that we believe means for them is a lot of work to put together. So I am guessing in my view that that tender will come out towards the end of this month, towards the middle of next month at the latest.

Now if this occurred, David, we believe that the typical amount of time, the shortest amount of time that normally government will take to make a decision will comprise four weeks of tender replies. In other words, tenderers reply, they will probably be two weeks after that of SASSA looking at the short list and interviewing the short list people and maybe even look at the technology. Then there will be some deliberation from the (indiscernible) that could easily take another two to four weeks. So we're looking at 2.5 months down the line. Then there will be the December period, which unfortunately in South Africa is really the holiday period. So we don't expect December to be too productive from any point of view and therefore, we expect the tender to be awarded in the first quarter of next year, namely probably January, beginning of February.

Thanks. And just finally can you update us on the timeline for the USAIDs Petfarv (ph) contract process?

That's another really good question. Now the latest information we have, which is not as of June but as of last week, so I apologize for jumping a couple of months, is that we are still expecting a decision by the end of September. And this is what we have been told that everything has been filed and has gone through the first round. It has gone through the second round. We are still in it at this point in time. I'm not too sure how many people fell off from it but I know that we are still in it and the people that we are working with are telling us that they are expecting some news as a final decision by the end of September.

A final decision on the contract award?

That is quite correct. That is what we expect. The awarding of the tender, they are expecting towards the end of September.

Tien-tsin Huang, JP Morgan.

Thanks. Hi. It's Tien-tsin. I have Imran Khan with me on the line as well. I was hoping you could give us the constant currency organic growth in revenues in the fourth quarter?

The constant currency growth for revenue in the fourth quarter and assuming a constant currency rate of 6.684 is 2% for the fourth quarter from 2004 to 2005 in rand.

Okay 2%. Were there any other onetime factors that impacted revenue growth in the fourth quarter beyond the Nedbank hardware (indiscernible) issue?

No there were not.

Okay. I just wanted to make sure. And then broadly maybe, Serge, if you can give us an update on the pipeline for other types of products among your existing beneficiary base like -- or even -- thinking about insurance, money transfers, bill payments among your existing base and then even broadly other products like wage payments and medical management surrounding HIV. If you can give us some metrics and update that would be helpful.

I think on this one let me kickoff by saying that one of the contracts that we did announce that we didn't talk much about is our Cell C contract. Now our Cell C contracts entail the provision of our terminal equipment in around 10,000 containers that is out to be deployed by Cell C around South Africa under a government initiative, which would provide cheap access to telephony to the majority of poor people of this country. Now this is something that we obviously have to develop the system because we want won the tender. I'm pleased to report that in fact the system is under test as we speak and we are expecting the launch of the system to occur I think during the first week of October.

Now during the first week of October, we are also expecting and we have been told that we have already got 500 containers to actually service almost with immediate effect and ourselves through our own blake (ph) empowerment process and initiative we have been able to actually raise interest to implement in excess of 2.5 thousand containers in our south provinces. Now what is exciting for us is not only the fact that we are expecting to generate a fee on every recharge, which will vary between 5 and 2% depending on the total amount of money exchanged. So even if you were at the worst case of 2% it is a lot better than the 0.75% we get in retail. But what is more important is that we are also going to be getting a footprint of thousand of little offices, for lack of a better word, that are going to allow us to do electronic pension welfare loads, salary loads, money transfers, as well as selling insurance and loans on our behalf as well as our medical products. So we believe that that full point is going to accelerate our market penetration of our financial product simply because it is going to be sold in the right areas to the right people by people that are going to require that extra income to actually sustain our own business, which is really simply to provide telephony. So that is one exciting product that I think is going to be a very good money spinner for us in the next twelve months.

The second product, which we are very excited about which really has very little to do with the tender that I spoke to David about, namely the debt (ph) tender in the -- the HIV AIDs tender with the U.S. government is really the thing that we have already implemented in South Africa five hospitals. We're already utilizing our technology and we already have, as far as I'm aware, more than 15,000 people have been issued with an HIV AIDS card and that HIV AIDS card manages not only the prescriptions that they receive but allows them to also receive -- to be able to take that particular card to any doctor or any agency that is qualified to deal with HIV AIDS patients. Anywhere in the country, off-line or online in order to be able to receive treatment.

And that is something that I think is also a huge initiative in South Africa simply because the information that comes out of the system is going to allow medical experts to actually manage how well the particular handing out of HIV AIDS drugs is actually working on the particular population and how many people whose count are below 200 are going to be able to actually go up to your number, which no longer actually makes them HIV AIDS active patients. So that is something that as you know we charge around between 20 and 10 rand per transaction depending if they are on HIV AIDS drugs or if they are simply on the KS/2 ports (ph) support system. So that is something that we believe has got a huge amount of not only interest but marketability as well.

And then the last one which are sort of addressed a little bit is of course our initiative within the unbanked but employed population of South Africa. Now in that, we had mentioned that we have an initiative at the moment that we are working on with one of the largest banks in South Africa in order to perform a joint venture with them. Why? Because we believe that it will be easier for us through their own infrastructure, namely the branch network but more importantly their corporate network to be able to address the need of corporate, vis-à-vis the people that they are paying in cash today.

Now we have two views to this. One we are continuing to export a particular initiative and we have moved reasonably far down the line with that particular institution. Two, we are also looking at the possibility of getting a second-tier license or banking license in South Africa simply because the South African government believes that they would like a company like us to actually compete in the world of banks. So a joint partnership with a formal bank would not necessarily meet government approval because they would prefer us to really do it alone as a competing bank rather than to simply partner with something which they have described or viewed as being a bit of a cartel. So that is something that we are a little bit divided here and the Board is taking some steps to discuss it among themselves. But we are certainly pursuing this avenue in one form or the other. I don't know if that sort of answered the question.

Thanks for the overview.

Carla Cooper, Robert W. Baird.

I wonder if you could give us an update on the contract in Namibia and how that is progressing. Thank you.

Thank you for the question. This is Serge again. We are pleased to say and we can't I think jump the gun but we are in fact traveling to Namibia tomorrow and we are expecting that you will be seeing an announcement probably within 24 hours of tomorrow to tell you that in fact our negotiations with Namibia has been concluded and that the project has become an active and a large project.

Great. Thank you. I wonder if Herman can just come back to -- I'm also trying to think about the differences in the actual revenue produced versus the revenue that we contemplated say a couple of months ago. I guess I could use some more explanation of any differences from your prospective, anything that would have arisen that was different than what you would have thought as the quarter began. Thanks.

You mean specifically for the fourth quarter, right?

I mean specifically for the fourth quarter. That's right. I mean was the number of beneficiaries different? The amount of value that was processed. Perhaps the amount of financial transactions and the amount of loans that you actually saw in the quarter.

No, I think all of those were in line with our expectations. The fourth quarter overall in terms of those metrics and if we look at the beneficiary numbers specifically they have been fairly static but we have anticipated a steady static growth in those sort of numbers and it's a trend that we anticipate to continue for the next couple of months. Obviously I'm told the Mpumalanga tender comes out and there are a few reasons for that. One, the creation of SASSA went hand in hand with a fairly rigorous antifraud campaign by government in which they encouraged government officials who were perpetrating fraud on the social grant system to come forward. There was a moratorium on prosecuting those individuals and that resulted in a big chunk of grants being taken off the system because they were actually fraudulent grants paid to people who didn't really deserve them. That was really in the space of disability grants and child support grants.

In other words, what these people would do it is they would apply for these grants using parameters that were incorrect in terms of being disabled or whatever. So that resulted in a bit of a drop in the number of beneficiaries. Obviously also the changeover to SASSA by the individual provinces has resulted in them not actively enrolling or registering new beneficiaries until such time as the new structure is finalized. So we are finding that it is a bit frustrating but there is a bit of a relaxation in terms of the endeavors on that specific front as far as that is concerned.

As far as the other businesses are concerned, the growth rate in the merchant acquiring business has been exceptional and that is well in line with the sort of adoption curve that we modeled if you recall earlier on this year. So that is well in line with what we expected. And in terms of the number of financial transactions and our expectations in terms of what has been achieved, it has been in line. We are targeting the rollout of financial services in some of the other provinces and we have commenced those specifically in the Northwest Province and both those continue as well. Obviously you know from time to time we ran into a -- we ran into a (indiscernible) in specific areas. I won't say provincial areas but districts certainly sometimes present unique opportunities for us. But overall I think we are quite satisfied that we have achieved in the fourth quarter what we had modeled, what we had budgeted and that we are well on track in the first quarter of the current year to do what we have anticipated.

Thank you. And then just a final question. Was the -- I believe it was Serge that mentioned or perhaps it was you who mentioned a number of POS devices that you had in place at the end of the year. And the number I wrote down was 3235. But if that number is correct, that doesn't foot to the number that I had for the prior quarter which was 1140. Did I mishear some numbers?

The 1140 number that you mentioned is the total amount installed in the first quarter. So it wasn't the total at the end of the quarter. If that makes any sense to you. In other words, in the third quarter, we installed a total of 1140 terminals but the total amount at the end of the third quarter would have been about 2400.

Thank you.

Blaine Marder (ph), Loeb Partners.

Thank you for having the call. Serge, you mentioned back in February of this year in the Business Day article that regarding your growth prospects that perhaps by the end of this year that your revenue could be a 50-50 balance between South Africa and elsewhere. Obviously and then you mentioned on the beginning of the call that perhaps it has been a bit delayed because of restructuring and the public filing. Is that still a reasonable goal for the next twelve months do you think?

Again, when I did mention it I think there might have been a miss connection between financial year and calendar year. Obviously what we are focusing on doing, like I mentioned, is that we are attempting and we are focusing our efforts in growing our revenue outside of South Africa for the simple reason that I think everyone will feel more far more comfortable once we have got a couple of big systems running in three or four countries outside of the South Africa borders, even if they are other African countries.

Now I also mentioned the fact that at the moment we really had only one real country in Africa, namely Malawi, that was based on the South Africa model but unfortunately for us it was a country whereby the central bank decided to buy the system and therefore we had no equity inside that particular company itself. Namibia for us, which I just spoke about, is going to be the real first country, which we believe we will end up buying (ph) 3 or 400,000 people almost within the year in fact and that is the particular JV in which we will have around 50% equity. So we are hoping that over the next twelve months and my marketing director, Brenda Stewart, has just joined me and is nodding but we are hoping that we're going to be able to achieve a number of other wins in Africa itself, which then certainly starts moving the balance of income from South Africa away from South Africa.

But that is something we have got to understand as well is that because we continue to grow at such a fast rate in Africa and South Africa as well that we have got to say to ourselves when are we going to get to the 50-50 balance because if I can grow, and at the moment my rate of momentum in South Africa is far greater than what it is outside of South Africa, so while I continue to grow at the fast rate in South Africa, it is going to become more and more difficult to shift to a 50-50 in terms of money earned within and money earned outside. But if we fix the numbers in South Africa today, I have no doubt that within the next year or two we will be on the 50-50 balance. And sorry to interrupt you but when I also referred to my statement, I normally refer to profitability simply because turnover in some of the countries other than South Africa is not going to be something that even we are going to be able to measure considering that we are really going to be equity accounting for those particular organizations. So it will be from a profitable point of view I would like to become 50-50 as quickly as we possibly can.

Okay. Very good. And then perhaps this is a question for Herman but when you start doing the joint ventures, would you consider some sort of proportionate or pro forma accounting that will show up if you were to fully consolidate them what the numbers would look like. In other words, we will get 50% of the beneficiaries, 50% of the EBITDA and the revenues, etc.

We will obviously try to account for it in whatever U.S. GAAP we take to us is the most appropriate treatment. Now as things stand at the moment, if we have a significant minority stake and if it is not a variable interest entity, we will have to equate the account for it because what it will certainly do is we will provide you with that sort of information obviously as part of the MD&A and over time as the geographic contributions increase we will also segment the business along geographic lines.

Okay. Very good. And then just finally, Serge, you mentioned in the press release this morning that you will be pursuing -- I'm just looking for it now -- acquisitions. Maybe I'm reading this wrong that deploying certain acquisitions, could you give us a sense of what you're looking for in terms of acquisitions?

I think your reading is correct and I think we did mention it on the roadshow to a number of people is that when we enter a particular territory, we are looking for something very specific. We're not really looking for somebody with money because candidly we have our own money and we could start our own company pretty much anywhere we would like. We look really for an equity partner simply because we want to ensure that we have got somebody locally that understands culture, that understands language, that understands demographics, that understands what is going on, politics in the country.

Now more importantly, we also want to make sure that we have an equity partner that also can utilize the technology for their own business because immediately that gives a new switch or a new system in that particular country capacity. Normally we find somebody that is large enough to make the switch breakeven and then we start building the rest of the business around it. Now to achieve that we must actually decide to go into a country and actually purchase a business that will be absolutely ideal to actually marry our technology and therefore that is the type of acquisition that we were looking at.

For example I can go into and let me use a country that won't really affect anything or that is difficult because we're talking to many of them, but let's talk Ethiopia, only the wrong one, but anyway Ethiopia. If we found that somebody today that distributes pension and welfare in cash the chances are that we would look at the potential acquisition of that business so we could introduce our technology a lot quicker and therefore get the business to be profitable within (indiscernible) rather than to actually go there and to actually start building critical mass ourselves. That is the type of acquisition that I'm talking about.

Very good. Like you did with the lender in South Africa.

100%.

Very good. Thank you, gentleman.

We are running out of time. So can we have the last question?

Certainly, sir. Our last question comes from Craig Peckham, Jefferies.

Thanks for having the call. I wanted to clarify the financial guidance for fiscal 2006. First of all, am I to assume that the earnings per share number includes the full impact of stock option expensing?

It does.

And can you give us perhaps a rough sense maybe a range of what you think the underlying revenue growth would be to support that EPS range?

We are very reluctant to provide revenue guidance at this point in time simply because -- although most of our revenues are recurring based, they are fairly lumpy in some of the segment areas. On top of it, the impact that the potential equity accounting of some of our joint ventures may have makes it very difficult for us in our view to provide accurate revenue guidance and so we would rather not provide the revenue guidance. We would encourage the market and our investors to rather focus on the profit numbers and the earnings per share number simply because of the method that we will have to employ to account for some of our new ventures.

Okay. I wanted to follow back up on the pace of expansion with regard to the point-of-sale terminals. I think you had said 3235 at the end of the year. So that is a very sharp schedule for rollout from September '04. What does your sense for what the potential distribution could be of the point-of-sale terminals?

Again, it's an extremely good question. At the moment, we have to look at two things. If we look in the five provinces in which we operate, and let's just focus on them for just one second. We believe that if we get to around 8000 terminals, we will probably reach what I would call an 80% saturation. In other words, 8000 terminals will give us enough terminals to capture all of the beneficiaries that we believe would move to merchant acquiring. When we then of course, and let's assume that we win a new province in pension and welfare, that is quite obvious then that that particular province would itself then add another depending on the province it could be anything between 1500 to 3000 terminals itself. So we believe that that will be the top off level.

The final thing, which is very interesting, is Cell C because by definition Cell C could be up to 10,000 containers and that would add 10,000 terminals to our footprint and those particular containers obviously have been built or are going to be deployed for a specific reason. But on top of that specific reason, which is providing telephony, we are going to be using them to actually sell our financial products as well as our money transfer system. So that would give us another footprint of around 10,000 terminals. We do not really see that number of terminals going much bigger than that whilst we are still very much in the rural areas of South Africa. If we end up by doing of course some sort of a joint venture with for example the fourth largest banking in South Africa that I mentioned then by definition we would also have access to the existing point-of-sale network, which exceeds 30,000 other point-of-sales. Now those would have to be modified in order to accept our fingerprint technology but those would also give us access to urban transacting rather than rural. So I don't know if that makes sense to you but at this point in time that would be the plan.

Thank you. That makes perfect sense. My last question really pertains to the three provinces that have listed current contract expiration dates in December and November of this year and where we stand on those three.

I think when I mentioned the time frame of the Mpumalanga contract, I think we have to understand that it is very, very difficult for SASSA to go to tender and award the contract and let's call it less than the six to nine-month period at best. So by definition that would imply that any contract that we feel, for example that expires in November of this year, which is two months away, that by definition would be automatically extended for at least another six months, may be even another year simply because there is simply no time for SASSA to actually go to tender, prepare a tender, evaluate a tender before the tender itself would actually expire. So I could be wrong, but my evaluation would be that I think there will be a tender that would go out towards the end of this month, beginning of next month for a province that is not one of our provinces and until that particular tender has been awarded, which might only happen at the beginning of next year, I think we will simply see extensions being granted by SASSA to all the other providers of services at the moment for the foreseeable future.

And is your best guess that the extensions would be a minimum of six-month duration?

Normally typically SASSA will not give something, which is less than six months but also the other thing they're going to go and say to everybody we're going to give you another three years because it will be the same as going to tender. So I think that you'll find six months is a little bit short because if you take two months from now to November, in six more months, they would have to issue a tender today to be able to award it in eight months time anyway. So if they are going to do this and give us six months, the chances are that they will give us another six months anyway simply because they would be no time for them to go to tender and award it. Otherwise they are probably going to say in November let's give you guys another year and then we will see what happens after the twelve months.

Thank you, Serge.

It was an absolute pleasure.

If I can perhaps conclude by I hope that we haven't disappointed too many people, vis-à-vis questions. Obviously we will attempt to talk to more people like we attempt to do on a regular basis and we will obviously be planning a visit back to the United States to actually do some one on ones again simply because we would like to personally thank many of the investors that have committed to our company. We certainly hope that we will not let you down and certainly we will keep you 100% in touch with what we're doing, being it good or being it bad, simply because at the end of the day I think it is important that all of us are on the same page in terms of where we're going. We really strongly believe that we have a winner here in the company. We have a winner in our technology and I really do not believe that we will not be able to deploy this model in many, many other countries around the world. So thank you very, very much to all of you for listening to us today and to all of you for committing to the company and we certainly will do our utmost best not to let you down. Thank you very much for your attention and for your time and commitment.

Thank you very much, sir. On behalf of Net1, that includes this afternoon's conference. Thank you for joining us. You may now disconnect your lines.