[Indiscernible] ladies and gentlemen and welcome to Net1's UEPS Quarter Four of 2021 Earnings Call. [Indiscernible] and the attendees will be in a listen-only mode. There will be an opportunity to ask questions in prompt. [Operator Instructions]. Please note that this event is being recorded. I will now 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, Chris CEO, Lincoln Mali, South Africa CEO, and Alex Smith CFO. A 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 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 the South African rand, which is non-GAAP.

we analyze our results of operations and our press release and in rand to assist investor's 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. Therefore -- thereafter, we will have a Q&A session. So with that, let me turn the call over to Chris..

Thank you, Dara. If you can hear me okay. Good morning. Good afternoon. And thank you, everyone, for joining us for our fourth-quarter earnings call today. [Indiscernible] 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 Net1's journey of change and renewal, including the appointment of high-quality non-executive directors, the appointment of new senior executives, rebuilding Net1's relationships with key stakeholders. And lastly the conclusion of the strategic review last year.

We're fortunate to have Kuben Pillay has just become our Chairman in August, following Jabu's passing. Kuben joined the board in June 2020. And as 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 Net1.

And I've been in the role as Group CEO just on two 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 Net1's potential was too important to ignore.

I'm a proudly South African, and I've spent much of my career building businesses outside of the country, in the UK, and elsewhere. I'm tremendously excited by the opportunity to reposition the Net1 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 African has a deep personal meaning for me, and there is no one better positioned in the market than Net1. 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 Net1.

From that team, today I have on call with me Alex Smith, our CFO, and Lincoln Mali who joined us as our Southern African CEO in May and is a critical leader in Net1's turnaround journey. Being 2 months into my time here at Net1, 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, but bringing financial inclusions to South Africa's underserved customers and helping small businesses exist the financial services they need to prosper.

We will achieve this through our ability to efficiently digitize that 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 the secular shift from cash to digital that we see taking place.

We have a large target addressable market of more than 150 billion rands, and this time, broadly split into 2 overlapping markets, providing consumer financial services to South Africa's more than 26 million adults in LSMs 1 to 6, 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 adjustable 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.

And it has 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 credits, 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 a network of over 350 branches and over 1500 ATMs.

As you know, the products and infrastructure were built originally to service a base of over 10 million clients [Indiscernible] now has 1 million clients and is less 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 both payments and value-added services.

We also managed 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 Net1 and communicated to the markets on the Q4 earnings call last year.

A leap of a high degree of alignments on strategy with the board and our 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 two investor expectations that preceded my tenure here at Net1. First, Net1 is in a significant net cash position. As custodians of this capital, we have the responsibility to invest in high-return opportunities or to return them to shareholders.

Few months in, I can say we're working through the business cases for various potential uses of capital within the business and in the market. And do that with the support of the Capital Allocation Committee that was established in 2020.

We will continue to apply rigorous capital allocation, and we will update the markets of any material developments in due course. Second, I would like to address the topic of continued losses in our financial services business, which is EasyPay Everywhere - EPE, Moneyline, and Smart Life.

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 break-even in that business unit by June of 2022.

Getting to a break-even number is no longer realistic within that time frame. 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 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 break-even is still a 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 break-even timelines in the coming months. I will say to you that going forward, what you should expect from me is a very high bar on taking guidance and executing against that guidance. You should also expect clear and transparent reporting Province business plan.

And so too [Indiscernible] I'm really excited to join Net1 in 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 it over to my colleague, Lincoln Mali for the full update on the turnaround of the South African Operations.

Lincoln..

Thank you, my brother, Chris. It's 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 Net1 in May and can sincerely say that it's been a huge honor to be part of the Net1 family at this critical time.

For a while, this was an organization under siege, but now there is a new mood. There's new energy across all our teams and we're reengaging with all our stakeholders under the 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 our growth ambition.

I found many highly competent people already within Net1, 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 regarded individuals to our management team within the last few months. We've included a page with [Indiscernible] buyers in the supplementary investor presentation, posted on our 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 Net1.

On charter, Net1's focus has historically been on the technology, logistics, and operations that enable it to successfully [Indiscernible] up to 10 million [Indiscernible] 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 network historically has added 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 a 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 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 internal communication and then advocate the campaign and in an above-the-line campaign through 9 radio stations in 9 South African languages to show the market that Net1 is back and that our products are available for our clients.

We already set 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. While it is early days, we're extremely encouraged by this trajectory. We're also in the advanced stages of launching 2 new exciting products for our clients.

The first is called EPE Light. This is a transaction account with the physical EMV debit card aimed at providing low-cost banking services to 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 one-time vouchers that can be withdrawn at Net1 ATMs. Our marketing tests 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're introducing South Cash ATMs recyclers for merchants because we are responding to the needs that Chris was talking about what merchants are looking for, for us.

Finally, we have and we'll continue to invest a significant amount of time and energy to show that we're 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. 9.2 million was lost across 80 ATMs, and 19 branches were damaged.

All the damages were [Indiscernible] at the loss of ZAR 34.5 million for ATMs and branch damages. And these have been submitted via our insurer to Sasria, which is the South African national riot insurer. And we await payments of these claims. Our insurers have given us the 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 Net1 South African operation and we have also materially improved the monthly run rate on customer additions. Lots of work remains and we're very strongly focused on this task.

I will now hand it 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 earning's call. It's been an exciting few months since your arrivals, and then all of our people are looking forward to our future under your leadership. Now, onto 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 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 had? should note? a loss of $4.2 million in the prior period.

The core South African operations, so 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 clients related to the COVID pandemic.

Otherwise, the cost base remains stable, and we have significant available capacity. The fourth quarter of 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 $500,000.

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 has been discussed earlier in the call.

This left us with a total number of active bank accounts on June 30, 2021, over a little over 1 million. Our ATM network utilization has continued to trend in the right direction, like 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 second quarter in fiscal 2020. The number of unique customers using our infrastructure was up 4.4% on the prior quarter, at up 27% on the same quarter last year. The prior year was impacted by the COVID lock-downs 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 dated June 30th, 2021 of ZAR336 million versus ZAR307 million on the 30th of June, 2020, and ZAR305 million on 31 March, 2021.

The other contributor in this segment is our insurance business, which saw its number of active policies increase to 246,000 from 233,000 a year ago. However [Indiscernible] increasing claims, which was 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 deregistrations and liquidation processes, and 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 to this 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 that fiscal year. Maybe a quickly filed draft perspectives 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 on the pending various capital raises closed by MobiKwik.

This resulted in a noncash pretax fair value increase of $23.4 million in Q4 2021, which lifted the current value for investments to $76 million on June 30, 2021. This evaluation is based on the most recent capital raise performed by MobiKwik in June 2021, which was based on a $700 million pre-money valuation.

Do we continue to hold our investment in Cell C at a [Indiscernible] value. We are encouraged, however, by the recent announcement by our fellow shareholder Blue Label Telecoms that they have raised funding to facilitate a recapitalization of Cell C. Cell C continues to improve its market position, and to report improving financial performance.

And we're optimistic over its future prospects once the recapitalization is completed. 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. On June 30, 2021, we had unrestricted cash of $198.6 million and no debt. U.S. dollar-denominated balances were $169.8 million after 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..

Thank you very much, sir. Ladies and gentlemen, at this time you can ask a question. [Operator Instructions] We'll pause a moment as we wait for the question queue to build. The first question comes from Raj Sharma of B. Riley Securities..

Hi, Hi, good morning. I have a -- I have a few questions about -- I'll start with welcome aboard, Chris and Lincoln. It's a pleasure to hear you on the calls. To Chris, I know that you've set -- you stated that you 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, Hi. Can I -- you mentioned you've got a few questions, but let me comment and just try to respond to that, and if you have follow-ups --.

Yes..

So firstly, thank you. Thank you for the welcome. We, both Lincoln and I are very excited to be part of this business. Early days in the journey for us, but tremendously excited about what we're seeing. In terms of forwarding 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.

We -- I hope that 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 off. And that's what I mean by a high bar, it's your own clarity.

So as we said on -- in our few remarks, we can see the momentum. The momentum is clearly building in terms of the EPE account growth. The August numbers were a significant step-up from July and June. And we're very hopeful and around that momentum, continuing to build.

I think what I would also say is and maybe underline is a lot of work, as Lincoln was saying, has gone into hiring and replacing senior sales execs across the country. The way I framed this is in many ways, Net1 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 cute relationship with SASSA, but each one of our million-plus customers is a customer.

And we need to change the culture in our organization to be really client-focused -- client's acquisition focused and solutions-driven, and that's a big shift, and that's what's been going on over the last 2 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 the future come back and give you targets and numbers that we would want to be held accountable to..

Right. So it's very encouraging to see the account growth. But these -- there's -- and also I see that there have been great additions to the team. Does this mean that the infrastructure is expanding or the costs are -- should we assume that the costs will be -- are going to be higher as well. I was looking for some sort of referencing around that..

So, I think a few points to make on costs. So no, you shouldn't expect the 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 leavers already being acted upon and focused on.

The investments in new people, to a large degree, is the replacement of some roles, is an investment required to really shift the, as I've said, the culture of the organization to one of the 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 increase. To the country, we are committed to seeing it reduced..

Got it. Thank you, that helps.

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

Sure. Yeah 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 in 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're looking 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 the market..

Got it. And then just moving on to the SASSA accounts. There was a -- SAPO, the post office has become in search for a reputable quote-unquote card scheme to issue cards over the next 5 years. And they say they need to issue about 12 million cards that need to be replaced for a big cost.

Is there -- does this recruitable card scheme assume Net1 would be a big contender..

I'm going to ask Lincoln to come in on this question in particular, if you mind, Raj..

Sure..

I think what's important to us here, we'll give you a good sense of how we're working with SASSA and how the relationship with SASSA 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..

Thank you, Chris. Raj, we applied our minds 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're able to go back to the policies and politely declined to participate but we've indicated that we are available to help whatever way but they -- we couldn't see ourselves participating in a module that did not make commercial sense. And therefore, we deleted 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 NASA leadership to provinces, to local. And it's done on a transparent basis, competitive basis, like everybody else, because they want clients to have a choice. And we also want clients to have a choice.

If there are other organizations that can offer better services than us, and 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..

Got it. So there is still a -- still, the same opportunity available to Net1 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 transactions and our staff is now engaged 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 the conversation.

Now they are able to be engaged in a conversation and give a sense of our capabilities. And most of those clients had been with us before. They know what Net1 is capable of and they are now coming back on the basis of developer positions 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 they've always given the best to the customer. And those are the people that are now benefiting from our customers coming back..

Okay, Perfect, thank you. I'll get back in the queue and take this offline. Thank you so much for answering my questions..

Thanks very much..

[Operator Instructions] The next question comes from Jeff Jokri of Unicom Capital..

Hi, guys, it's Jeff Jokri. 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? upsell? a little bit on Roger's question, but could you provide a sort of a general view as to what breakeven would be in terms of EPE accounts? Just so we can get that tapping in business to sort of back the -- to breakeven?.

Yeah. Hi, Jeff, the numbers on maturity are different from what we've indicated in the past, in terms of the number of EPE accounts to get to break even. So I think we've previously got it to 1.4 million, 1.5 million for South Africa as a whole to get back to break-even. I don't think we see that significantly differently at this point.

But as Chris mentioned, we're going through a whole new system. So we'll certainly come back and give perhaps clearer guidance around that in due course..

Okay. 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 quick est way to receive the grant.

It also suggested a period, I believe it was September 3rd to the 10th as the window to change the method. I was wondering if you saw this affect your recent account ad and whether you think this is a shift in attitude thinking it's better at SASSA that will make opening new accounts easier or is it more temporarily related to COVID? Thanks..

I think broadly the sinking within SASSA and the sinking amongst financial institutions are starting to align. That we need one another to solve an intactible South African problem. And I think if anyone of us needs 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 is 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 a 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 their applications are 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're 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 activation of accounts, so that if we've opened an account there must be money flowing to the account. And that's something that's going to be good for us.

And is one of the variables in looking at when the financial services could be turning around and get to break-even. 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 better guidance. But these are good inputs into what we are trying to solve.

And so the stars I think are aligned much more now..

That's very encouraging. I guess just in the last follow-up would be related to the increase in August. And it's a pretty significant uptake in new accounts.

And so how much do you attribute to -- you can give some color on this, how much do you attribute to sort of the marketing campaign, for the new staffing and then just sort of the digitization they just talked about from SASSA, sort of how much would you put in each of those sorts of buckets in terms of the new accounts in August? Thank you very much..

It's probably early days yet. We are reporting through the data to give us those answers. But certainly, the new leadership in all the provinces is playing their 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 -- we can attribute more to.

And we want to build more If 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, and just again this morning I was with a couple of branch managers 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're changing in their 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 all players, and that makes a big, big difference..

Jeff, does that conclude your questions?.

Yes. Thank you very much..

Thank you. Ladies and gentlemen, I will now hand it over 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 shown in our business.

I think to -- hopefully, you heard in those closing remarks from Lincoln, the activity -- the levels of activity 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 make this shift from a more reactive, operations-focused business to one that is really focused on building momentum, building client acquisition, and building the leading South African Fintech platform focused on underserved consumers and merchants.

We are 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..

Thank you. Ladies and gentlemen, that concludes today's event..