Letshego quartet boost group’s profit before tax

Letshego Holdings Limited, the listed consumer lender said the Botswana operation remains one of its core contributors to profit before tax (PBT). The pan African group revealed on its full year results for the eleven months ended 31, December, 2014 that 91 percent or P884 million in profit before tax came from its four largest markets namely Botswana, Mozambique, Namibia and Tanzania.
However, it reported that 60 percent of profits before tax were generated outside of BotswanaÔÇöwhere the company is domiciled, such that Letshego has managed to reduce dependence on the market where it was born.
“The largest contributors to advances growth in absolute terms were Namibia, Mozambique and Botswana, contributing P944 million (75%) of net increase, as well as driving the payroll portfolio growth,” Chris Low’s company said.
According to Letshego, advances to customers (net) increased by 28 percent to P5.7 billion while the payroll portfolio increased by 26 percent to P5.3 billion and the microfinance portfolio increased 117 percent to P370 million. Profit for the period stood at P722 million, a 22 percent increase from P644 million obtained in the same period in 2013.
The group, which prides itself as having the best collection systems, saw its customer base growing by 11 percent to 265,265 while customer access points rose by 19 percent to 252. Letshego has operations in Botswana, Kenya, Lesotho, Mozambique, Rwanda, South Sudan, Swaziland and Uganda amongst others. It said deposit-taking commenced in Mozambique (February) and Rwanda (August), whilst in Namibia a provisional license was granted in July.
“Subject to Central Bank approval we expect the license to be confirmed in the current financial year. Progress has been made on developing the approach to financial inclusion, including financial services access via agents and mobile telephony.”
The Lesotho operations’ portfolio doubled to P190 million. Growth in the Swaziland portfolio was revived after product reviews, closing at P151 million, up 41 percent from the prior period. Combined, the microfinance operations in Kenya, Rwanda and Uganda achieved growth of 117 percent, closing at P370 million. Underlying this strong result was significant growth in the low income housing and MSE loan solutions.
Letshego revealed that a new corporate governance framework, in line with King III, is being rolled out to all subsidiaries. Customer experience standards were developed and branch look and feel improvements have been implemented. “Investments have been made in direct sales teams capacity and capabilities. The payroll and microfinance operations in Uganda were successfully integrated.”