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BILETS-Availability of Interim Report
Letshego Holdings Limited
Incorporated in the Republic of Botswana
Registration number 98/442
(JSE Code: “BILETS”)
(“Letshego Holdings” or “the Company” or “the issuer”)
LETSHEGO HOLDINGS LIMITED REVIEWED GROUP INTERIM 2019 FINANCIAL RESULTS
The Board of Directors of Letshego Holdings Limited (“the Group”) herewith
presents an extract of the reviewed consolidated financial results for the six
months period ended 30 June 2019.
Financial highlights:
• Gross advances to customers passed P10 billion, a 15% increase on the prior
period
• Customer deposits and borrowings were flat period on period
• The Group remains well capitalised with a capital adequacy ratio of 38%
(2018: 39%) and a debt to equity ratio of 110% (2018: 112%)
• Yields on advances to customers and the cost of borrowings were generally
maintained resulting in a 6% increase in net operating income
• Costs increased by 10% resulting in a cost to income ratio of 41% (2018:
40%)
• The cost of credit risk was 2.5% (2018: 2.6%) and the Group’s coverage
ratio was 109% for all non-performing loans (2018 95%)
• Profit before tax was P600 million a 2% increase from the prior period
(2018: P590 million)
• The effective tax rate was 39% (2018: 37%)
• Profit after tax was P364 million being 2% lower than the same period last
year (2018: 370m)
• Return on equity was 17% (2018: 18%) and return on assets 7% (2018: 8%)
• Earnings per share of 15.4 thebe (2018:15.6 thebe) per share was achieved,
a decline of 1%
Non Financial highlights:
• Total borrowing customers increased to 387,000 (2018: 364,000)
• Total savings customers 250,000 (2018: 167,000)
• Customer access points have remained the same at 315
• The Group employed 1902 (2018: 1908) full time employees supplemented by an
additional 1,459 (2018: 1,398) commission-based sales agents
Financial performance
The financial performance for the Group for the six months to June 2019 was
within expectations. The Group has made good progress in the three areas of
focus for 2019 being, reduction in the cost to income ratio, cost of credit risk
and the effective tax rate. These are expected to continue into the second half
of 2019.
A number of initiatives have been started with positive results expected into the
second half of 2019 and beyond.
Management
The Board is progressing with a number of appointments to fill current positions
that are held on an interim or acting capacity plus strengthening the overall
executive management team. While this is happening the executive management
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team, as led by the Interim Group CEO, Dumisani Ndebele, remains in place and
they have been successful in making good progress in achieving the 2019 financial
targets for the Group as well as commencing an overall review of the medium and
long term strategic objectives.
Board
Following recent changes to the Board, four new Independent Non-Executive
Directors have been identified subject to regulatory approval. These will bring
additional relevant skills and experience to the Board in the areas of risk
management, financial services and fintech. The Board takes this opportunity to
thank the Independent Non-Executive Directors that stepped down over the last
twelve months for their contribution to the Group.
Strategic Review
There is currently no appetite for any new acquisitions. A comprehensive
rationalisation and optimisation of all aspects of the Group has commenced and is
expected to be completed in the second half of 2019. This is at a geographic,
product and channel levels and, may result in certain existing countries or
products or channels being discontinued or exited over time. The Board will keep
Shareholders advised of related developments.
Capital structure, funding and dividend policy
Shareholders approved an extension of the share buy-back programme at the Annual
General Meeting of Shareholders on 24 June 2019. No shares have been repurchased
in the current period. The share buy-back programme is intended to assist in
optimising returns to Shareholders by leveraging up the balance sheet and
reducing equity levels.
Ratings Agency Moody’s kept Letshego Holdings Limited credit rating unchanged at
Ba3 with stable outlook. The Group remains well capitalised with a CAR of above
38% which is well above the regulatory minimum in all of its operating countries.
Despite high reliance on wholesale funding, significant progress has been made in
diversification of the Group’s funding base away from the bank loan market
through the issuance of local currency corporate bonds in Botswana, Ghana,
Mozambique and South Africa. The Group has also been successful in refinancing
maturing facilities and, attracting new funding from specialist international
investors based in the UK and Europe with a focus on micro and inclusive finance
ventures. The new funding has enabled the Group to better manage its debt
maturity profile and liquidity position.
The Group has complied with all of its financial covenants for senior secured
lenders as set out in the Security Sharing Agreement.
The Board has reviewed the Group’s dividend policy and has determined to reduce
the dividend to 25% of profit after tax. This is to allow the Group more scope
to maintain its debt to equity levels at the current base.
Prospects
Based on the current financial performance of the Group and current economic
circumstances, the Board expects the company’s financial fundamentals will remain
robust over the next 12 – 18 month horizon, despite risks associated with its
regional expansion.
Auditors’ review
The condensed annual financial statements from which the financial information
set out in this announcement has been reviewed but not audited by Ernst & Young,
the Letshego Group’s external auditors. Their unqualified review report is
available for inspection at the Group’s registered office. Noteholders are
reminded that the Issuer’s auditors are still in the process of obtaining JSE
accreditation, as such the next set of Annual Financial Statements will be
audited by a JSE accredited auditor pursuant to the JSE Debt Listings
Requirements.
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Dividend notice
Notice is hereby given that the Board has declared an interim dividend of 4.3
thebe per share for the period ended 30 June 2019. In terms of the Botswana
Income Tax Act (Cap 50:01) as amended, withholding tax at the rate of 7.5% or any
other currently enacted tax rate will be deducted from the final gross dividend
for the period ended 30 June 2019.
Important dates pertaining to this dividend are:
• Declaration date, 28 August 2019
• Therefore, the shares are ex-dividend from 16 September 2019
• Last date to register, 18 September 2019
• Dividend payment date on or about, 27 September 2019
For and on behalf of the Board of Directors:
E Banda D Ndebele
Group Chairman Interim Group Chief Executive Officer
GABORONE, 2 September 2019
The reviewed financial results can be accessed below:
https://www.letshego.com/latest-financial-results
Debt sponsor in South Africa
The Standard Bank of South Africa Limited, acting through its Corporate and
Investment Banking division
Sponsoring broker in Botswana
African Alliance Securities
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Date: 02/09/2019 09:20:00
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