Letshego Holdings said on Thursday that it continues to target new markets in the continent as it looks to relieve the burden from Botswana operations ÔÇô which have been the group’s torch bearer over the years.
The Botswana Stock Exchange (BSE) quoted pan African micro lender is focusing in East Africa region where it has entered into negotiations with a third party over a possible transaction.
However, it remains bullish as 58 percent of its profits before tax were generated outside of Botswana, according to its full year results for the period ending 31 January 2014. This was better than the 40 percent recorded on the prior year.
“The Group continues to actively explore new regions in Africa, new business streams, both through acquisitive and “green fields” methods,” the company said in a statement accompanying the results.
However, in a period that was characterised as ‘challenging year’, a satisfactory performance was achieved in terms of growth in the advances book with the main contributions coming from our three largest markets, Botswana, Namibia and Mozambique.
“As announced to Shareholders on the 25th February 2014 the Board of Directors would like to inform Shareholders that the Group has entered into negotiations with a third party in the East Africa region which,if successfully concluded, and subject to all regulatory approvals,
may result in a transaction that could have an impact on the price of
the Company’s securities,” added the company.
According to the group’s full year results, advances to customers
increased by 33 percent to P4.4 billion compared to P3.3 billion on
the corresponding period with profit after tax down 2 percent
year-on-year. Fee income is up by a percent from P132.9 million to
P134.2 million and other operating income grew two-folds from P58.0
million to P122.2 million possibly bolstered by proceeds from the sale
of the Zambian subsidiary.
During the period, costs were also on the rise while employee benefits
are by 62 percent from maiden year while operating expenses also shot
up by similar magnitude bringing profit before impairments to P914.7
“The increase in operating expenses has been attributed to investment
in technology as part of strategic transformation and a higher cost
base in the Micro Africa group while scale is being developed in the
new markets,” Stockbrokers Botswana weekly market report noted.
“Impairment losses also spiked up by 84 percent; this was driven up by
impairment charges taken against assets in South Sudan, taking into
account the political state of the country and a further provision had
to be made for assets in Swaziland; the impairment charge is at 1.7
percent of net advances up from 1.3 percent in 2013.”
This brought profit before tax a percent higher than prior at P850.2
million (BWP841.4m:FY2013) to which a tax charge of P205.5 million
brought PAT to P644.7m (BWP659.6m: FY2013).
Letshego said its board has decided to change the year end to 31
December to align the year end to the calendar year. Therefore,
Letshego will prepare interim results for the six month period to 31
July 2014 which will be published on or around mid-October 2014, and
then prepare audited results for the 11 months ended 31 December 2014.
These will be published on or around mid-March 2014.
Letshego has operations in Botswana, Kenya, Lesotho, Mozambique,
Rwanda, South Sudan, Swaziland and Uganda amongst others.