MyBucks SA (DE:MBCG) is pursuing technological and regional growth initiatives despite immediate challenges in integrating new acquisitions. The group is fully committed to its strategy of supplying financial services to poorly serviced customers, primarily low and middle income clients in sub-Saharan Africa via the internet, cell phones and applications. The product range has been expanded to include SME loans and insurance products. New acquisitions have extended coverage up the continent’s eastern seaboard, but have required considerable integration efforts.
Step change in size of group
The results for the year to June 2017 show just how much the purchase of four banks from Opportunity International (OI) has increased MyBucks’ business, even though they were not consolidated for the full 12 months. New loans disbursements rose by more than half to €120m, helping to boost revenue from €38.8m to €53.7m. The net loan book at year-end June 2017 stood at €68.5m compared to €36.3m a year before.
Integration of new acquisitions burdens profitability
Underlying trading results at the established operations recorded modest growth in 2016/17 but this was more than offset by the heavy costs of integrating the OI banks, which drove the group’s continuing businesses into a net loss of €11.1m in 2016/17 compared to a loss of €0.6m in 2015/16. The OI banks are now operating at break-even after sharp cuts in running costs and reductions in funding costs, but there will still be heavy incidental costs and no positive profit contribution in the current year.
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