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Operating Segments
 9 Months Ended
Mar. 31, 2023
Operating Segments [Abstract]  
Operating Segments

17.Operating segments

 

Operating segments

 

The Company discloses segment information as reflected in the management information systems reports that its chief operating decision maker uses in making decisions and to report certain entity-wide disclosures about products and services, and the countries in which the entity holds material assets or reports material revenues. A description of the Company’s operating segments is contained in Note 21 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2022.

 

The Company analyzes its business and operations in terms of two inter-related but independent operating segments: (1) Consumer Division (“Consumer”) and (2) Merchant Division (“Merchant”).

 

Reallocation of certain activities in Other to Merchant

 

During the second quarter of fiscal 2023, certain processing activities performed outside South Africa which were within the Company’s Other operating segment commenced reporting to management within its Merchant operating segment as part of the integration of Connect. The Company has allocated these operations from its Other reporting segment to Merchant in its reportable segments during the second quarter of fiscal 2023. Previously reported information has been restated.

The reconciliation of the reportable segment’s revenue to revenue from external customers for the three months ended March 31, 2023 and 2022, is as follows:

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

Reportable Segment

 

 

Inter-segment

 

 

From external customers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchant

$

118,092

 

$

-

 

$

118,092

 

Consumer

 

15,876

 

 

-

 

 

15,876

 

 

Total for the three months ended March 31, 2023

$

133,968

 

$

-

 

$

133,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchant

$

18,785

 

$

12

 

$

18,773

 

Consumer

 

16,429

 

 

-

 

 

16,429

 

 

 

Total for the three months ended March 31, 2022

$

35,214

 

$

12

 

$

35,202

The reconciliation of the reportable segment’s revenue to revenue from external customers for the nine months ended March 31, 2023 and 2022, is as follows:

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

Reportable Segment

 

 

Inter-segment

 

 

From external customers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchant

$

348,508

 

$

-

 

$

348,508

 

Consumer

 

46,314

 

 

-

 

 

46,314

 

 

Total for the nine months ended March 31, 2023

$

394,822

 

$

-

 

$

394,822

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchant

$

50,600

 

$

12

 

$

50,588

 

Consumer

 

50,232

 

 

-

 

 

50,232

 

 

 

Total for the nine months ended March 31, 2022

$

100,832

 

$

12

 

$

100,820

 

The Company evaluates segment performance based on segment earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for items mentioned in the next sentence (“Segment Adjusted EBITDA”). The Company does not allocate once-off items, stock-based compensation charges, certain lease charges (“Lease adjustments”), depreciation and amortization, impairment of goodwill or other intangible assets, other items (including gains or losses on disposal of investments, fair value adjustments to equity securities, fair value adjustments to currency options), interest income, interest expense, income tax expense or loss from equity-accounted investments to its reportable segments. Group costs generally include: employee related costs in relation to employees specifically hired for group roles and related directly to managing the US-listed entity; expenditures related to compliance with the Sarbanes-Oxley Act of 2002; non-employee directors’ fees; legal fees; group and US-listed related audit fees; and directors and officer’s insurance premiums. Once-off items represents non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. The Lease adjustments reflect lease charges and the Stock-based compensation adjustments reflect stock-based compensation expense and are both excluded from the calculation of Segment Adjusted EBITDA and are therefore reported as reconciling items to reconcile the reportable segments’ Segment Adjusted EBITDA to the Company’s loss before income tax expense.

17.Operating segments (continued)

 

Operating segments (continued)

 

The reconciliation of the reportable segments measure of profit or loss to loss before income taxes for the three and nine months ended March 31, 2023 and 2022, is as follows:

 

 

 

 

 

Three months ended

 

 

Nine months ended

 

 

 

 

 

March 31,

 

 

March 31,

 

 

 

 

2023

 

2022

 

2023

 

2022

 

Reportable segments measure of profit or loss

$

9,939

 

$

(5,290)

 

$

26,136

 

$

(15,933)

 

 

Operating loss: Group costs

 

(2,293)

 

 

(1,929)

 

 

(6,849)

 

 

(5,578)

 

 

Once-off items

 

(1,184)

 

 

(235)

 

 

(1,901)

 

 

(2,120)

 

 

Lease adjustments

 

(696)

 

 

(890)

 

 

(2,255)

 

 

(2,647)

 

 

Stock-based compensation charge adjustments

 

(1,644)

 

 

(614)

 

 

(5,955)

 

 

(1,711)

 

 

Depreciation and amortization

 

(5,975)

 

 

(463)

 

 

(17,892)

 

 

(2,084)

 

 

Gain related to fair value adjustment to currency options

 

-

 

 

6,120

 

 

-

 

 

3,691

 

 

Gain on disposal of equity securities

 

-

 

 

720

 

 

-

 

 

720

 

 

Loss on disposal of equity-accounted investment

 

(329)

 

 

(346)

 

 

(193)

 

 

(346)

 

 

Interest income

 

469

 

 

761

 

 

1,269

 

 

1,463

 

 

Interest expense

 

(4,984)

 

 

(691)

 

 

(13,408)

 

 

(2,272)

 

 

 

Loss before income taxes

$

(6,697)

 

$

(2,857)

 

$

(21,048)

 

$

(26,817)

The following tables summarize supplemental segment information for the three and nine months ended March 31, 2023 and 2022:

 

 

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

 

 

 

 

 

 

 

 

 

March 31,

 

March 31,

 

 

 

 

 

 

 

 

 

2023

 

2022

 

2023

 

2022

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchant

$

118,092

 

$

18,785

 

$

348,508

 

$

50,600

 

 

Consumer

 

15,876

 

 

16,429

 

 

46,314

 

 

50,232

 

 

 

Total

 

133,968

 

 

35,214

 

 

394,822

 

 

100,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchant

 

8,290

 

 

1,427

 

 

25,303

 

 

4,506

 

 

Consumer(1)

 

1,649

 

 

(6,717)

 

 

833

 

 

(20,439)

 

 

 

Total Segment Adjusted EBITDA

 

9,939

 

 

(5,290)

 

 

26,136

 

 

(15,933)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchant

 

1,896

 

 

220

 

 

5,520

 

 

656

 

 

Consumer

 

288

 

 

226

 

 

811

 

 

1,377

 

 

 

Subtotal: Operating segments

 

2,184

 

 

446

 

 

6,331

 

 

2,033

 

 

 

Group costs

 

3,791

 

 

17

 

 

11,561

 

 

51

 

 

 

 

Total

 

5,975

 

 

463

 

 

17,892

 

 

2,084

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenditures for long-lived assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchant

 

3,020

 

 

121

 

 

10,545

 

 

198

 

 

Consumer

 

1,697

 

 

713

 

 

2,665

 

 

1,523

 

 

 

Subtotal: Operating segments

 

4,717

 

 

834

 

 

13,210

 

 

1,721

 

 

 

Group costs

 

-

 

 

-

 

 

-

 

 

-

 

 

 

 

Total

$

4,717

 

$

834

 

$

13,210

 

$

1,721

(1) Consumer Segment Adjusted EBITDA for the three and nine months ended March 31, 2022, includes reorganization costs of $5.9 million (refer also Note 1).

 

The segment information as reviewed by the chief operating decision maker does not include a measure of segment assets per segment as all of the significant assets are used in the operations of all, rather than any one, of the segments. The Company does not have dedicated assets assigned to a particular operating segment. Accordingly, it is not meaningful to attempt an arbitrary allocation and segment asset allocation is therefore not presented.