Lesaka Technologies Inc (LSAK) 2021 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Net 1s UEPS Quarter 4 of 2021 Earnings call. (Operator Instructions) Please note that this event is being recorded.

I'd now like to hand the conference over to Dara Dierks. Please go ahead, ma'am.

Thank you, operator. Welcome to our fourth quarter 2021 earnings call. With me today are Chris Meyer, Group CEO; Lincoln Mali, South Africa CEO; and Alex Smith, CFO.

Our press release and supplementary investor presentation are available on our Investor Relations website at ir.net1.com. As a reminder, during this call, we will be making forward-looking statements, and I ask you to look at the cautionary language contained in our Form 10-K regarding the risks and uncertainties associated with forward-looking statements. Also, we will discuss our results in South African rand, which is non-GAAP. We analyze our results of operations in our press release in rand to assist investors' understanding of the underlying trends in our business. As you know, the company's results can be significantly affected by the currency fluctuations between the U.S. dollar and the South African rand.

Chris will start this call with an update on strategy. Then Lincoln will provide an update on the turnaround of the South African operations. And finally, Alex will go through the results of the fourth quarter. Thereafter, we will have a Q&A session.

So with that, let me turn the call over to Chris.

Thank you, Dara. hope you can hear me okay. Good morning, good afternoon, and Thank you to everyone for joining us for our fourth quarter earnings call today.

I think, first and foremost, I want to recognize that this is our first earnings call since the tragic passing of our former Chairman, Jabu Mabuza. Jabu played a critical role in Net 1s journey of change and renewal, including the appointment of high-quality non-exec directors, the appointment of new senior executives, rebuilding Net 1s relationships with key stakeholders and also the conclusion of the strategic review last year. We're fortunate to have Kuben Pillay who has just become our Chairman in August following Jabu's passing. Kuben joined the Board in June 2020 and was part of the various changes that I've just mentioned that occurred during Jabu's tenure. And Kuben is providing strong continuity on that journey.

So this is my first earnings call at Net 1, and I've been in the role as Group CEO for just under 2 months. The opportunity to take on the role of Group CEO was presented to me earlier in the year, and it was very quickly apparent that the mix of people, capabilities and mission is unique. Simply put, the opportunity to be part of unlocking Net 1s potential was too important to ignore. I'm a proud South African, and I've spent much of my career building businesses outside of the country, in the U.K. and elsewhere. I'm tremendously excited by the opportunity to reposition the Net 1 platform for growth and see it as an opportunity to make a real difference in our country.

Our mission of driving financial inclusion for underserved consumers and merchants in South Africa has a deep personal meaning for me. And there is no one better positioned in the market than Net 1. Our company has incredible assets and capabilities in South Africa, and we aim to work towards creating a company that will be a force for good, whilst also unlocking value for shareholders. I also consider myself incredibly lucky to have joined a strong team of over 3,000 people here at Net 1. And from that team, today, I have on the call with me, Alex Smith, our CFO and Lincoln Mali, who joined as our Southern African CEO in May and is a critical leader in Net 1s turnaround journey.

So being 2 months into my time here at Net 1, I wanted to share a few initial observations and areas of focus going forward. Firstly, our vision. Our vision is to build and operate the leading South African full-service fintech platform, offering payment processing and financial services to underserved merchants and consumers. Our core purpose is to improve people's lives by bringing financial inclusion to South Africa's underserved customers and helping small businesses access the financial services they need to prosper. We will achieve this through our ability to efficiently digitize the last mile of financial inclusion and to provide a full-service fintech platform across cash and digital, serving the needs of both, while also facilitating a secular shift from cash to digital that we see taking place.

We have a large target addressable market of more than ZAR 150 billion. And this TAM broadly split into 2 overlapping markets, providing consumer financial services to South Africa's more than 26 million adults in [Elysium's] 126 and providing merchant financial services to South Africa's micro and small businesses, of which there are an estimated 700,000 formal merchants and 1.4 million informal merchants.

Second, our addressable market is growing, and it's supported by long-term tailwinds. South Africa is primarily a cash-based economy, with approximately 60% of transactions still conducted in cash. As you know, worldwide, there is a secular shift away from cash towards digital payment methods. And South Africa is part of this shift, and is at a similar phase of transition as other middle income countries. We are well-positioned to benefit from that shift.

And that leads me to my third observation, which is on our core competencies. On the consumer side, we currently provide transactional banking, unsecured credit and a digital wallet, as well as insurance and various value-added services to people underserved by the large banks. Our consumer offering is underpinned by our proprietary technology, which gives us the unique ability to provide secure payment processing in offline and rural environments. Our consumer offering is also underpinned by our network of over 350 branches and over 1,500 ATMs.

As you know, the products and infrastructure were built originally to service a base of over 10 million clients, but the offering now has 1 million clients and is thus loss-making. We, therefore, have a large and urgent strategic imperative to make the consumer offering profitable through significant interventions on customer acquisition and on costs. This is a huge focus area for us right now, and my colleague, Lincoln Mali will provide more information on our actions in this area shortly.

On the merchant side, we currently operate one of the largest bank independent financial switches in South Africa with integrations to over 40,000 terminals for bill payments and value-added services. We also manage point-of-sale terminals for third parties and provide various cryptographic solutions. My key reflection on our offering is that it is well-positioned in the formal merchant space. However, we are not currently addressing informal merchants, and in particular, the micro and small businesses, which is a large opportunity. And from a product perspective, we are not fully addressing the opportunity in merchant acquiring, lending and cash management. Part of that opportunity can be addressed organically and part of it can be addressed through acquisition.

These initial reflections aligned very well with the outcomes of the strategic review that was concluded by Net 1 and communicated to the markets on the Q4 earnings call last year. I therefore have a high degree of alignment on strategy with the Board and my management team. And I can say we are going full steam ahead in building the leading fintech platform for underserved consumers and merchants in South Africa.

Being new to this role, I also want to provide an update on 2 investor expectations that preceded my tenure here at Net 1. First, Net 1 is in a significant net cash position. As custodians of this capital, we have a responsibility to invest in high-return opportunities or to return it to shareholders. 2 months in, I can say I'm working through the business cases for various potential uses of capital within the business and in the market. I'm doing that with the support of the capital allocation committee that was established in 2020. We will continue to apply rigor to capital allocation, and we will update the market of any material developments in due course.

Second, I'd like to address the topic of continued losses in our financial services business, which is EasyPay Everywhere, EPE; Moneyline; and SmartLife. This is a question of scale, and it requires material growth in the EPE account numbers in order to sustain the significant fixed cost base that we have. The previous communication was a target of 1.4 million accounts by December '21, and therefore, reaching monthly breakeven in that business unit by June of 2022.

Getting to a breakeven number is no longer realistic within that timeframe. We have had to establish an entirely new senior sales capability across the country, hiring new provincial sales heads into 8 of the 9 provinces, which is now in place, but it has taken longer than we anticipated. Additionally, our marketing efforts that were launched in June were interrupted by the riots and civil unrest that took place in July. These riots were unprecedented in democratic South Africa.

To be clear, though, we have ramped up the account acquisition significantly. In August, we experienced over 50,000 sign-ups, achieving the amount of growth in 1 month for what has been taking us 1 quarter. So the plan to significantly increase the account numbers and reach breakeven is still top priority, and it will take time as we focus on investing in the business to position us for growth going forward. We look forward to providing more clarity on the expected growth rate and breakeven timelines in the coming months. I'll say to you that going forward, what you should expect from me is a very high bar on setting guidance and executing against that guidance. You should also expect clear and transparent reporting on progress versus plan.

And so to wrap up, I'm really excited to have joined Net 1 at such a pivotal stage in our journey. I'm strongly aligned with my Board and with the management team on this strategy, and we are absolutely focused on execution.

I will now hand over to my colleague, Lincoln Mali, for a fuller update on the turnaround of the South African operations. Lincoln?

Thank you my brother, Chris. Certainly been an incredible 2 months working with you, partnering with you as we try and work on the business together with our colleagues. I personally joined Net 1 in May and can sincerely say that it's been a huge honor to be part of the Net 1 family at this critical time. For a while, this was an organization under siege, but now there is a new mood, this new energy across all our teams, and we're reengaging with all our stakeholders and then a stronger commitment to our financial inclusion purpose.

I'd like to take you through some of the key developments over the last few months and some of the plans for the coming months. My first step in my new role was to ensure that we have the right team, and we have the right culture to execute on our growth ambition. I found many highly competent people already within Net 1, especially in the operational areas. However, I also found the need to add many new skills into the business, especially into the senior management ranks for product and commercial ownership.

To that end, we've appointed several high-caliber experienced and well-regarded individuals to our management team within the last few months. We've included a page with brief bios in the supplementary investor presentation posted on our IR site. Suffice to say that we have significantly strengthened our team over the last quarter, and we are humbled by the number of people showing an interest to join Net 1.

On culture, Net 1s focus has historically been on the technology, logistics and operations that enable you to successfully place grants up to 10 million customers every month with SASSA as their main client. The task at hand now, however, requires all of that. But in addition to that, it also requires a greater focus on new and existing customers as individuals. It requires us to deeply understand the needs of our clients so that we can offer them appropriate solutions.

Further, whereas Net 1 historically has had a fixed base of clients based on the contract with SASSA, we now need to acquire new customers on the basis of our value proposition to the customer and retain our existing customers through great service. We are currently involved in far-reaching training and role modeling exercise for all of our team members to enable them to manage through this transition. There are already good signs that the cultural change is taking hold.

With the team in place and the cultural changes ongoing, our focus, as Chris said, has been on significantly raising the growth trajectory of our client base. In June, we embarked on an internal communication and an advocacy campaign, and in an above the line campaign through 9 radio stations in 9 South African languages to show the market that Net 1 is back, that our products are available for our clients. We registered 19,000 EPE accounts in June; 20,000 EPE accounts in July, despite the unprecedented civil unrest in the country during that month; and then 55,000 EPE accounts in August. Whilst it is early days, we're extremely encouraged by this trajectory.

We are also in advanced stages of launching 2 new exciting products for our clients. The first is called EPE Lite. This is a transaction account with a physical EMV debit card, aimed at providing low-cost banking services to the unbanked customers in South Africa. It will compete very favorably with all the entry banking products with other banks. The second new product is called [EasySend]. It enables individuals without a bank account to receive cash using onetime vouchers that can withdraw at Net 1 ATMs. Our marketing test on both products have shown strong traction, and we expect them to be in the market in the next few months.

In the ATM channel, we are taking several strategic steps to drive bottom-line growth. We are introducing, firstly, value-added services onto our ATM for consumers to buy airtime, data, electricity, lotto tickets and vouchers. Secondly, customers will also be able to apply for loans using our ATMs. And finally, we are introducing self-cash ATMs and recyclers for merchants because we're responding to the needs that Chris was talking about what merchants are looking for, for us.

Finally, we have and will continue to invest a significant amount of time and energy to show that we are a responsible corporate citizen, offering low-cost financial services to our clients, sold in an honest and transparent manner. We are very proud that we are back at the main table in key conversations in the financial sector, that we are now part of the stakeholder community that is involved in financial services, and that our infrastructure was used during the riots and civil unrest to close the gaps that the industry was facing.

Before I close off, I think it's important to provide clarity on the damages and losses that we sustained in the riots and civil unrest that took place in July. 173 ATMs were damaged or destroyed. ZAR 9.2 million was lost across 80 and 19 branches were damaged. All the damages were faced at a loss of ZAR 34.5 million for ATMs and branch damages. And these have been submitted via our insurers to Sasria, which is the South African national riot insurer, and we await payments of these claims. Our insurers have given us a go-ahead to proceed with some repairs and replacement and this is in progress.

In conclusion, we have made significant progress over the last quarter in providing the platform for the growth of Net 1 South African operation, and we have also materially improved the monthly run rate on customer additions. Lots of work remains, and we are very strongly focused on this task.

I will now hand over to my brother, Alex, to talk about our quarterly results.

Thank you, Lincoln and Chris. And I wanted to take the opportunity to extend an official welcome to you both on your first earnings call. It's been an exciting few months since your arrivals, and I know all of our people are looking forward to our future under your leadership.

Now on to the financial and operational highlights. Total revenue for the quarter was $34.5 million, which was a 41% increase year-over-year in U.S. dollar terms and a 15% increase in rand terms, primarily due to higher volume-driven transaction fees, improved lending revenue and hardware sales. The U.S. dollar was 18% weaker against the rand during the fourth quarter of 2021 compared with the prior period, which also impacted on our reported results.

We reported an adjusted EBITDA loss of $8.2 million, which was 31% better than the $11.9 million EBITDA loss reported for the fourth quarter of 2020. This was mainly as a result of the closure of IPG, which incurred a loss of $4.2 million in the prior period. The core South African operations saw EBITDA losses for the quarter of $7.8 million compared to the $5.9 million in the prior period, primarily due to weaker profitability in the Financial Services segment linked to increased insurance claims related to the COVID pandemic. Otherwise, the cost base remains stable, and we have significant available capacity.

The fourth quarter 2021 fundamental loss per share was $0.18 compared to $0.21 per share a year ago. Corporate costs were $4.6 million, which was significantly higher than Q4 2020, primarily due to an allowance for doubtful loans receivable of $4 million, which we have excluded from adjusted EBITDA and fundamental earnings. This was partially offset by the net reversal of stock-based compensation charges of $0.5 million.

In South Africa, our consumer bank accounts, EPE, increased by about 43,000 gross accounts and 23,000 net accounts during the quarter. The encouraging increase we have seen during the first 2 months of fiscal '22 have been discussed earlier in the call. This left us with a total number of active bank accounts at June 30, 2021, of a little over $1 million.

Our ATM network utilization has continued to trend in the right direction, both in terms of total transactions and the number of cash withdrawal transactions. For the quarter, total transactions were up 3.5% compared to the prior quarter and was 16% higher than the same quarter in fiscal 2020. The number of unique customers using our infrastructure was up 4.4% on the prior quarter and up 27% on the same quarter last year, though the prior year was impacted by the COVID lockdowns that were prevalent during that quarter. Transaction volumes through our EasyPay switch were up 7% compared to the prior quarter, while transaction values also increased by around 5%.

In our Financial Services business, the loan book finished June 30, 2021 at ZAR 336 million versus ZAR 307 million on the 30th of June 2020 and ZAR 305 million at 31 March, 2021. The other contributor in this segment is our insurance business, which saw its number of active policies increased to 246,000 from 233,000 a year ago. However, a marked increase in claims, which were 50% higher in Q4 '21 than in Q4 2020 due to the pandemic meant that this was the main driver of the increased loss in Financial Services. IPG was officially closed during the quarter with all staff exiting the business. We do continue with various company de-registrations and liquidation processes, but these are administrative in nature, and we can now effectively close the chapter on this operation.

Turning to our various investments, we can provide the following updates. During fiscal 2021, we exited our entire positions in Bank Frick and B2, which has substantially reduced our equity-accounted investments compared with last year. Finbond reported its fiscal 2021 results in May, which included further losses as it recovered from the effects of the pandemic, particularly in respect of its results in South Africa. As a result, we recorded a $1.7 million loss, being our share of its losses for the second half of its fiscal year to February 2021. However, this was an improvement on the loss of $2.6 million we recorded in respect to the first half of their fiscal year.

MobiKwik filed a draft prospectus with the relevant Indian authorities in early July. We are very supportive of the IPO process they are following and look forward to seeing the company move forward. During the 2021 fiscal year, we increased the carrying value of our investment in line with the valuations underpinning various capital raises closed by MobiKwik. This resulted in a non-cash pre-tax fair value increase of $23.4 million in Q4 2021, which lifted the carrying value of our investment to $76 million at June 30, 2021. This valuation is based on the most recent capital raise performed by MobiKwik in June 2021, which was based on a $700 million pre-money valuation.

We continue to hold our investment in Cell C at a no value. We are encouraged, however, by the recent announcement by our fellow shareholder Blue Label Telecoms that they have raised funding to facilitate the recapitalization of Cell C. Cell C continues to improve its market position and to report improving financial performance, and we are optimistic over its future prospects once the recapitalization is concluded.

In July 2021, we increased our short-term credit facilities from $1.2 billion to $1.4 billion in order to access the necessary cash to stock our ATMs. These facilities are only available for use in respect of our ATMs, and we believe are currently sufficient to optimally operate our ATM business. At June 30, 2021, we had unrestricted cash of $198.6 million and no debt. U.S. dollar-denominated balances were $169.8 million out of that total. This represents $3.69 per share in cash and about 58% of our current net asset value.

With that, operator, we'd like to turn the call back over to you for the Q&A portion of our call. Thank you.

(Operator Instructions) The first question comes from Raj Sharma of B. Riley Securities.

I have a few questions about -- I'll start with welcome aboard, Chris and Lincoln. It's a pleasure to hear you on the call. So first, to Chris, I know that you've said -- you stated that you'll set a high bar on any sort of numbers going forward. But any indication of what that bar is? I know you took off the number of accounts that are going to be added by the end of the fiscal '22. It seems like there's a lot of addition to the staff and a lot of addition to the right players in your local geography. But any sort of indication on what is your target for account adds for the year?

Raj, you mentioned you've got a few questions, but let me come in and just try and respond to that and if you have follow-ups, we can go on. So firstly, Thank you. Thank you for the welcome. Both Lincoln and I are very excited to be a part of this business and early days in the journey for us, but tremendously excited by what we're seeing. In terms of forward guidance and the bar, if you like, I think, as I said, at this point, we're not in a position to provide guidance. We are very focused on being transparent and providing guidance and indications that we can achieve as a business. Hopefully, you can appreciate having been in the seat just for 2 months, that it is early days, and we're looking through the underlying momentum in the business and really want to form very clear views around more formal guidance before we come out. And that's what I mean by a high bar. It's around clarity.

So as we said in our opening remarks, we can see the momentum. The momentum is clearly building in terms of EPE account growth. The August numbers are a very significant step-up from July and June, and we're very hopeful around that momentum continuing to build. I think what I'd also say is, and maybe underlying, is a lot of work, as Lincoln was saying, has gone into, I suppose, hiring and replacing our senior sales exec across the country. The way I'd frame this is, in many ways, Net 1 was a logistics business. It was a business that was focused on delivering -- of moving cash from point A to point B and ensuring grants were paid.

Our challenge has been to reposition this business to recognize that not only do we have a key relationship with SASSA, but each one of our 1 million-plus customers is a customer. And we need to change the culture in our organization to being really client-focused -- client-acquisition focused and solutions-driven. And that's a big shift. And that's what's been going on over the last few months. And that's what we're looking for in the data to see that starting to come through and allow us to, therefore, give you much clearer and confident numbers and guidance. So I hope that answers the question. I hope that gives you a sense of where we're focusing. And we will, in future, come back and give you targets and numbers that we would want to be held accountable to.

So it's very encouraging to see the account growth. And also, I see that there has been great additions to the team. Does this mean that the infrastructure is expanding or the costs? Or should we assume that the costs are going to be higher as well? I was looking for some sort of ring-fencing around that.

So I think a few points to make on costs. So, no, you shouldn't expect cost base in this Financial Service business to increase. We are focused on reducing costs in the Financial Services business. And we have a number of levers already being acted upon and focused on. The investment in new people, to a large degree, is replacement of some roles and is a investment required to really shift the -- as I said, the culture of the organization to one of sales, it's an investment in sales to really drive account growth and activation. But within the context of -- you should not expect to see the cost base in that Financial Services business to increase. To the contrary, we are committed to seeing it reduce.

And if I can move on to the possible acquisitions that you are referring to on the merchant side and the informal space. Is there any sort of indication on what possible size would that be or if you have already identified candidates and sort of a timeline? Is it -- when could we expect something? Any sort of color around that thinking?

Sure. Yes. So as I said in my remarks, we have a number of opportunities that we are evaluating. We have spent a lot of time looking at the markets and cross-referencing what's out there to our capabilities and those gaps that I was discussing in our capabilities. So we have a very good handle, I believe, in terms of potential targets. And we are working through a few business cases in that regard. We can't say more than that at this point. But as soon as we have something -- if we have something to announce, we will bring that to market.

And then just kind of moving on to the SASSA accounts, there was a SASSA -- the post office has become a surge for a reputable "card scheme" to issue cards over the next 5 years. And they said they need to issue about 12 million cards that need to be replaced for a big cost. Is there -- does this reputable card scheme assume Net 1 would be a big contender?

I'm going to ask Lincoln to comment on this question, in particular, if you don't mind, Raj. I think what's important for us here is we'll give you a good sense of how we're working with SASSA and how the relationship with us that has been repaired as Lincoln was referring to earlier. But I think Lincoln is best placed to provide a little bit more detail and color. Lincoln, if you want to take that.

Raj, we applied our mind to the tender. We looked at the tender in quite a lot of detail. And in the end, we decided not to participate further in the tender because we felt that the commercial terms of the tender were not acceptable to us. And we felt that we could still go on with the momentum that we've got to try and grow the customer base organically without having to go through a procurement process for a deal that we thought did not make a lot of commercial sense for us. So we were able to go back to the post office and politely decline to participate. But we've indicated that we are available to help in whatever way, but that we couldn't see ourselves participating in a model that did not make commercial sense. And therefore, we didn't do that.

But on the other hand, as Chris was saying, we've spent a lot of time rebuilding our relationship with SASSA at all levels from the national leadership to provinces to local, and it's done on a transparent basis, competitive basis like everybody else, because they want clients to have choice, and we also want clients to have choice. If there are other organizations that can offer payer services than us then that's fine. We think that we can offer good services, and that's why we see our customers coming back to us. So we didn't pursue that tender at all.

So there is still the same opportunity available to Net 1 to get back a lot of the SASSA accounts as your customers.

Yes, indeed. So that's exactly the opportunity we saw that many of those clients still do come to us for their transaction. And our staff are now engaging in more conversations than in the past. As Chris was saying, in the past, they would have just paid the grant and not engage in a conversation. Now they're able to engage in a conversation and give a sense of our capabilities. And most of those clients had been with us before. They know what Net 1 is capable of, and they are now coming back on the basis of the value propositions that we have and the service that our staff has continuously given through all the difficulties. We've had men and women who've been in this business for 15, 20, 25 years and have always given their best to the customer. And those are the people that are now benefiting from our customers coming back.

(Operator Instructions) The next question comes from Jeff Yokuty of Unicom Capital.

Welcome, Chris, and Lincoln. It's great to have you on the call as well. Congratulations on the recent pickup in EPE accounts. I was curious, Alex, if you could maybe -- (inaudible) a little bit of Raj's question, but could you provide at least sort of a general view as to what breakeven would be in terms of EPE accounts just so we can get that South African business back to breakeven?

Jeff, look, the numbers are materially different from what we've indicated in the past in terms of the number of EPE accounts to get to breakeven. So I think we've previously guided to 1.4 million, 1.5 million for South Africa as a whole to get back to breakeven. And I think we see that significantly differently at this point. But as Chris mentioned, we're going through a whole process now. So we'll certainly come back and give perhaps a clearer guidance around that in due course.

The second question I had is -- and this might be one for Lincoln. There was a couple of press reports related to -- recently related to the COVID relief grant, suggesting that SASSA confirmed the bank account method as the most convenient and quickest way to receive the grant and also suggested a period, I believe, I think it was like September 3rd to the 10th as a window to change the method. I was wondering if you saw this affect your recent account adds and whether you think this is some sort of a shift in attitude, thinking, et cetera, at SASSA, that will make sort of opening new accounts easier? Or is it more sort of a temporary related to COVID?

I think, broadly, the thinking within SASSA and the thinking among financial institutions is starting to align, that we need one another to solve an intractable South African problem. And I think if anyone of us need a reminder of how deep these problems are, the riots kind of gave us that picture. So we now have more regular engagements with SASSA as part of the other financial institutions. So what SASSA has done is that it started to digitize the grant approval process. So today, for new grants, you can actually apply for a grant in the SASSA portal without going to a SASSA branch.

What our staff are doing for those clients, mainly in the rural areas, we are now using that opportunity to help our clients apply and therefore, those clients are able to apply and get the bank account. And that is all done in the 3 to 4 day turnaround time. So that's the first positive for us. We think that if that's done for new clients, it could also be done for other clients who want to change bank accounts.

Secondly, for the 350 grant, SASSA did it in a way where everything was done digitally. All the applications were done digitally. So you can see the swing from SASSA, which is aligned to our interest as well to do everything digitally. And so we participated in that as well. And we are starting to see some of those applications from the 350 grant. So I think directionally, we see more and more of SASSA going more digital, and we are also gearing ourselves from our IT side to be able to do that with SASSA. And that would also help us with the activation of accounts, so that if we've opened an account, there must be money flowing into that account, and that's something that's going to be good for us. And it's one of the variables in looking at when the Financial Services could be turning around and get to breakeven.

So these are all the variables we're working on, as Chris was saying, that at the right time, we'll be able to give a better guidance. But these are good inputs into what we are trying to solve. And so the stars, I think, are aligning much more now.

I guess just then the last follow-up would be related to the increase in August, it's a pretty significant uptick in new accounts. So how much do you attribute to -- if you can give some color on this, how much do you attribute to the marketing campaign, new staffing and then just the digitization that you just talked about from SASSA? How much would you put in each of those buckets in terms of the new accounts in August?

It's probably early days yet. We are poring through the data to give us those answers. But certainly, the new leadership in all the provinces is playing a role. We are repurposing our marketing, using more digital marketing, using our own infrastructure that we've got, our ATMs, our branches and all of that to market. Our own staff's confidence is getting better. And then obviously, the relationship with SASSA is also improving. And we have the digital play also from SASSA. So in our mind, it's all of these contributors. It's still very early days for us to be able to pinpoint specifically which ones are more -- can you attribute more to. And we want to build more history, we want to build more understanding, and we're trying to get to understand more of that.

And we're spending a lot of time in the field. Just again this morning, I was with a couple of branch managers, just to get feedback from them about what do they see on the ground, what's improving. And that's also a big difference in the culture we are changing in the organization, that we spend a lot of our time in the field with our clients, with our staff in our provinces to get the pulse of what's going on and engaging with SASSA and other role players, and that makes a big, big difference.

Ladies and gentlemen, I will now hand it back to management for closing comments.

Thank you very much, operator. So just to conclude, again, thank you very much to everybody for joining us on the call. Thank you for the questions, and thank you for the interest in our business. I think to -- hopefully, you heard in those closing remarks from Lincoln, the activity -- the levels of activity, the momentum that is going on in our business, the excitement that we're starting to feel across our branches and across the country as we take this shift from a more reactive, operationally-focused business to one that is really focused around building momentum, building client acquisition and building the leading South African fintech platform focused on underserved consumers and merchants. We're all very committed to this, and we look forward to sharing more on the journey in future calls. Thank you very much for joining us.

Ladies and gentlemen, that concludes today's event. Thank you for joining us. You may now disconnect your lines.