LETSHEGO HOLDINGS LIMITED - Letshego Holdings Limited - Trading Statement - BILETS

Letshego Holdings Limited - Trading Statement - BILETS

Letshego Holdings Limited

Incorporated in the Republic of Botswana

Registration number 98/442

(JSE Code: “BILETS”)

(“Letshego Holdings” or “the          Company” or “the issuer”)

This announcement is being released on the Johannesburg Stock Exchange (“JSE”)
for purposes of complying with paragraph 7.46 of the JSE’s Debt Listings
Requirements in respect of Letshego Holdings Limited’s Note Programme.

Letshego    Holdings   Ltd   (“LHL”    /   “the   Group”)   is   a   proudly   African,    retail
financial services organisation, incorporated in 1998 and headquartered Gaborone,
Botswana.     The   Group    is   listed   on   the   Botswana   Stock   Exchange   and   remains
committed to leveraging digital innovation, agile methodologies and strategic
partnerships to enhance customer experience and increase access to simple and
appropriate financial solutions for emerging market consumers across the Group’s
11-country footprint.


Following LHL’s Full Year Financial Statements published on 2 March 2020, and
subsequent COVID-19 Update to shareholders on 5 May 2020, the Group is finalising
its interim financial statements for the six-month period ended 30 June 2020.


   •   Net interest income is expected to be lower than the same period last year,
       but only by a single digit percentage, while Operating Income overall is
       likely to decline between 10% to 15% on the back of a reduction in Non
       Funded Income (NFI).
   •   The Loan Loss ratio (LLR) is, however, expected to be lower than the
       comparative period last year, driven largely by significant performance
       improvements in the Group’s mobile loan portfolio.
   •   Profit before Taxation is expected to range between 15% and 25% (between
       P90 million and P152 million) lower than the P600million reported for the
       six months ended 30 June 2019 -          while Profit after Taxation is expected to
       range between 20% and 30% (between P73 million and P110 million) lower than
       the P364million reported for the six months ended 30 June 2019.


The projected decline in profits is mainly attributable to the impact of COVID-19
on sub Saharan economic activity and the resultant drop in business volumes,
particularly in the second quarter of 2020.            As indicated in our COVID-19 Update,
transaction volumes were lower in both our Deduction at Source (DAS) and Micro
and Small Entrepreneur (MSE) segments during this period.                NFI levels have been
adversely impacted by the same slowed transaction volumes as a result of the
pandemic, as well as regulatory policies adjusted towards the end of 2019 in one
of our larger markets.




Despite this, our business has remained resilient, with DAS showing a stronger
recovery than initially anticipated as the Group progresses into the second half
of 2020.


The MSE segment, that comprises 9% of the Group’s total loan book, was impacted
in   the   Education,   Travel   &   Tourism,   Manufacturing   and   Trade   sectors, with
approximately 60% of customers opting for the repayment holiday offered.


Continuous customer engagements throughout the repayment holiday period, as well
as other mitigation strategies, have reduced flows into Non-Performing Loans. As
efficiencies in collections and recoveries continue to improve, we expect second
half LLR to remain within moderate levels, reflecting the resilience of the DAS
book.


The Group Board is pleased to note the resilience displayed by the business
despite ongoing economic challenges associated with the COVID-19 pandemic, and
looks forward to the future with optimism.


The Group’s Interim Results, for the period ended 30 June 2020, will be published
on or around
1 September 2020.



By order of the Letshego Group Board




Enos Banda                                            Andrew F. Okai
Group Chairman                                        Group Chief Executive
26 August 2020                                        26 August 2020


Debt sponsor in South Africa

Kea Sape: 0117215594 or kea.sape@standardbank.co.za

The Standard Bank of South Africa Limited, acting through its Corporate and
Investment Banking division




                                                                                     

Date: 26-08-2020 03:55:00
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