Thursday, September 24, 2020

Letshego profits embolden its ambitions

Letshgo Holdings, the giant micro-lending company continues to be upbeat about the future as it is embolden by fantastic results that showed earning per share surging up by 62 percent under the current global economic crisis.

In its full year results to the end of January 2009, the company’s revenues jumped up to P 398 million from P 278 million in the previous year. Profits before tax stood at P 219 million while advances were up 70 percent.

“Given the current economic environment it is evident that the next twelve months will be challenging. However, the fundamentals of the group remain very well positioned,” the company said.
Letshego is a home grown brew with braches in Botswana, Namibia, Swaziland, Tanzania, Uganda and Zambia and is just on the verge of opening another one in Mozambique.

However, Botswana still remains its biggest cash-cow with profits before tax of about 17 percent.

The move into the African continent has resulted in the opening of six new branches bring the total number of branches to 106 and the staff compliment jumped up 43 percent to 389. Further, its customer base increased by 53 percent to 93, 965 after it acquired the Namibian outfit, Eduloan.

“The purchase of Eduloan (Namibia property) was the first acquisition that the group has undertaken,” the company said adding that before that all properties were regarded as green fields.

In its expansion bid, the company is to open shop in Mozambique where it has already secured a government salary deduction code. Lestshego is already positioning itself with its offices being renovated before a grand launching.

Further, the monied company, powered by the Botswana Insurance Fund Management (Bifm), which is in an aggressive mood of being strategically positioned across Africa, is also thinking of opening shop in Ghana and Lesotho.
However, it said the global economic position looks uncertain in the next twelve months it is involved in the scramble for Africa.

Despite all the recorded achievements, Classen is craving to print more money. Not only in pula terms but also in the world’s most respected international exchange currency, the United States dollar. He is even screaming to the top of his voice, encouraging shareholders to put more on the table and asking for mandates to raise more in the form of debt instruments.

“The accreditation to IFSC presented us with a lot of opportunities and the board took a decision to expand the business outside Botswana,” he said, flanked by his lieutenant, Colms Patterson, the finance director.

And towards the close of last year, he went to his shareholders to ask them to give him one of the most seemingly ambitious mandates to raise P 1 billionÔÇöto be issued in tranches — and, on top of that, he re-surfaced in January this year with a shareholders’ special offer for P 360 million ÔÇöa plan that coincided with the global economic crunch.

Some of the shareholders were furious to hear that although the offer looked more enticing when it was first muted last year but when they met to make the final decision some, but very few, stopped short of calling for his public thrashing. The problem was not his it started in the United States of America and at the time of voting on the offer the share price has slumped below the special price for already existing shareholders.

Classen and his team’s idea has always been and still is that they want a strong war-chest into enter into competition head-to-head with some of the continent’s most greased institutions in his own league. The other challenge is that his peers have long been in the game long before the formation of Letshego. Blue, for instance, has been around for slightly 18 years.

Some of the giant micro-lending companies, which are fiercely working across the African continent are– Blue Financial Services and Bay Port both originating from South Africa.

The other challenge is that his peers have long been in the game long before the formation of Letshego. For instance, Blue Financial Services has been around for slightly 18 years and is already ahead in terms of the scramble for Africa .

“We believe that we are in a good position at the moment. We will be able to re-pay our loans and use some of our debt to the growth of the business across the region. This is the next (interesting) growth stage of Letshego’s growth,” Patterson said.

Since the accreditation by IFSC Letshego Holdings has opened shops in Swaziland, Tanzania, Uganda and Zambia and is about to open another one in the near future in Namibia.

With the cash that they are holding and the anticipated tranches from the P 1 billion yet to be raised it should be easy to open in Lesotho, Mozambique and Ghana, but, Zimbabwe is still under its radar.

“Ghana is an English-speaking country and we have a company that is registered there. Ghana offers different opportunities. Thy have had democratic elections and we’ll use it as a stepping stone into West Africa,” he said.

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