This has been know since April. The surprise is their growth and guidance for next year. The future of this company lies outside low margin service for the SA govt. Indeed, the long term future of UEPS is outside of SA altogether. I am not one to start buyout rumors, but a company that can scale across nations in the developing world to provide quasi-banking services to the un-banked seems a good candidate for a buyout by a player in international developing world banking.
SASSA recently paid UEPS over $25 million for cost related to building out its infrastructure. Now they want to open the process for who implements the payments. UEPS is not worried about it. Look at their future guidance for 2015. Their growth is outside of South Africa:
. The SASSA contract “is becoming a smaller and smaller part of our business. It used to 70 to 80 percent. The new number is 27 percent. We have been expanding outside of South Africa.”
Besides South Africa, Net 1 also does business in South Korea, the U.S., India, Botswana and Namibia. Yesterday the company said fundamental per-share earnings surged 184 percent to $2.16 in the year through June, as sales gained 29 percent to $581.7 million. The company’s shares trade in New York and Johannesburg.
Net 1 spent more than 1 billion rand implementing systems for SASSA, which constrained prior year earnings, Belamant said.
“We have been able to work on reducing costs and expand other areas of our business,” he said. “The most exciting thing for us is our mobile technology” which enables money transfers, billing and secure “card-not-present” transactions across the Internet, he said.