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Description Of Business And Basis Of Presentation (Policy) | 12 Months Ended
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Jun. 30, 2022
Description Of Business And Basis Of Presentation [Abstract] |
Description of Business | Description of Business Lesaka Technologies, Inc. (“Lesaka” and collectively with its consolidated subsidiaries, the “Company”), formerly named Net 1 UEPS Technologies, Inc., was incorporated in the State of Florida on May 8, 1997. The Company is a provider of financial technology, or fintech, products and services, primarily in South Africa and neighboring countries, to unbanked and underbanked consumers, and fintech solutions for merchants operating in formal and informal markets. The Company provides cash management and digitization services and card acquiring to merchants, and has developed and provides secure transaction technology solutions and services, and offers transaction processing, including bill payment and value-added services (including prepaid airtime and electricity products) and financial solutions to its customers.
Basis Of Presentation | Basis of presentation The accompanying consolidated financial statements include subsidiaries over which Lesaka exercises control and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Reorganization Charge - Financial Services Restructuring | Reorganization charge - financial services restructuring The Company has incurred significant losses since its contract to distribute social grants expired in September 2018. A strategic imperative for the Company is to return its South African consumer business to a breakeven position and then profitability as soon as possible. As part of a cost optimization review completed in late calendar 2021, the Company performed a review of its labor structure and determined that a number of its defined employee roles would need to be terminated due to redundancy. The Company embarked on a retrenchment process pursuant to Section 189A of the South African Labour Relations Act (“Labour Act”) on January 10, 2022. The Company incurred cash costs of approximately $6.7 million (ZAR 103.4 million) during the third quarter of fiscal 2022, principally consisting of severance and related payments and the payment of unutilized leave days. The Company recorded an expense of $5.9 million in the caption reorganization costs in the Company’s consolidated statement of operations for the year ended June 30, 2022. The primary difference between the reorganization charge amount and the total cash paid relates to leave pay which was accrued in prior periods.
July 2021 Civil Unrest In South Africa | July 2021 civil unrest in South Africa Two of South Africa’s nine provinces experienced significant civil unrest in July 2021 resulting in mass looting, loss of life, disruption of transport and supply routes, and widespread destruction of property. In total 337 South Africans lost their lives in the unrest – fortunately none of the Company’s employees were injured or harmed. There was widespread damage to bank and ATM infrastructure in the affected provinces. In total approximately 1,800 ATMs and 300 branches were damaged across the industry, and the Banking Association of South Africa (“BASA”), estimates that total damage to banking infrastructure amounted to ZAR 1.6 billion. The South African Special Risks Insurance Association (“SASRIA”), a public enterprise and a non-life insurance company that provides coverage for damage caused by special risks such as politically motivated malicious acts, riots, strikes, terrorism and public disorders, estimates that the total damage to property across South Africa will be between ZAR 19.0 billion and ZAR 20.0 billion. The Company suffered damage at 19 of its branches and to 173 ATMs. The disruption and related closure of branches also impacted the Company’s efforts to grow EPE customer numbers. The Company also saw an impact on transaction volumes through its ATMs with July 2021 volumes 13% lower than June 2021, and August 2021 3% lower than July 2021. The Company’s insurance claims to recover the cost to repair and replace its branches and ATMs have been met in full, with the Company receiving ZAR 38.6 million from SASRIA during the year ended June 30, 2022. As a result of the disruption to ATM coverage and availability, BASA and the South Africa’s banks agreed that the fee which customers pay to utilize other banks’ ATMs would be waived for August and September 2021. The Company lost transaction fee revenue of approximately ZAR 6.0 million ($0.4 million) during the year ended June 30, 2022, as a result of this decision.
Impact Of Events In Russia And Ukraine | Impact of events involving Russia and Ukraine The Company does not expect its operations to be significantly impacted by events unfolding in the Ukraine. The Company believes that these events may adversely impact South African gross domestic product and rates of inflation as a result of the recent increases in crude oil prices, which is likely to impact economic activity in South Africa and therefore indirectly affect the Company. It may also lead to higher input prices for certain of the goods and services the Company procures.
Impact Of COVID-19 On The Company's Business | Impact of COVID-19 on the Company’s business The Company’s business has previously been impacted by government restrictions and quarantines related to COVID-19. South Africa operates with a five-level COVID-19 alert system, with Level 1 being the least restrictive and Level 5 being the most restrictive. South Africa operated at Level 3 during most of the first quarter of fiscal 2022, and primarily at adjusted Level 1 until the restrictions ceased to be in operation on April 4, 2022. These restrictions had a limited impact on the Company’s businesses. South Africa is currently subject to limited COVID-19 restrictions following the lifting of the National State of Disaster in South Africa on April 5, 2022. These restrictions are also expected to have a limited impact on the Company’s business . The broader implications of COVID-19 on the Company’s results of operations and overall financial performance continue to remain uncertain. While the Company has not incurred significant disruptions thus far from the COVID-19 outbreak, apart from the two months in April and May 2020 when loan origination was curtailed, the Company is unable to accurately predict the impact that COVID-19 will have due to numerous uncertainties, including the severity and duration of any further outbreak, actions that may be taken by governmental authorities, the impact on the Company’s customers and other factors. The Company will continue to evaluate the nature and extent of the impact on its business, consolidated results of operations, and financial condition.

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