Home » News » Business » Put your house in order – Letshego advised

Put your house in order – Letshego advised

Publishing Date : 24 February, 2020

Author : TSAONE SEGAETSHO

Lately there have been signs of trouble brewing that did not go unnoticed at Letshego, the micro-lender has been experiencing abrupt recurring change of faces in top management positions. Market observers saw this as the reason which diminished investor confidence.


 Kgori Capital Portfolio Manager, Tshegofatso Tlhong said Letshego was one of the worst performers of 2019 because of leadership chaos. The micro-lender started last year with a share price of P1.62 before losing its grip heavily by 51.2 percent. It has been trading at a lower price since then and has never recovered. This price fall also made Letshego stock in high demand.


According to the recently published Motswedi Securities quarterly brief of Q4 2019, in that period the market at large was distressed. But Letshego was the largest market casualty as it posted a year to date loss of -56.2 percent according to the quarterly report released by Motswedi researchers Garry Juma and Salome Makgatlhe.


“This was a result of the stock feeling some significant selling pressure from the market following a series of top management changes. All beginning with the departure of the Group’s long term CEO in the second half of 2018, the resignation of the Group CFO (at the beginning of the year), and then the abrupt resignation of the replacement Group CEO after only six months in the role in March 2019,” said Motswedi Securities this week.


Motswedi Securities researchers said Letshego has been assuring many that things will change but the sentiment for its stock did not change. The stock closed at a historic low price of P0.71/share, with interest in the stock gradually growing towards the end of 2019, according to Motswedi Securities. But valuation wise, Letshego is very attractive at current levels with a PE of 3.5x and P/Bv of 0.4x.


Meanwhile, Letshego stock was this week trading at P0.88 before press time but with no signs of showing high demand for the stock. Tlhong putting her expertise on the recently published Kgori Capital Insight Q4 2019 report which sought to reflect on the just ended quarter said, Letshego leadership issues questions around strategic direction and executions which had investors jittery. “A well-communicated resolution to these key issues will be positive for the share,” she advised.


Tlhong said Letshego and Standard Charted bank were the worst performers of 2019. Maybe the latest movement by the micro-lender to fill in few high positions should be indirectly address Tlhong’s advice on coming up with resolutions on how to deal with leadership issues.
Last month Letshego announced that it has concluded its executive search for a permanent Group CEO and giving the job to Andrew Fening Okai. He was formerly with Standard Chartered as Global Chief Operating Officer and has more than two decades in the finance industry.


After leading his appointment Letshego board Chairman Enos Banda said Okai has “multi-geography financial expertise in diverse disciplines within a retail banking environment, including governance, strategy, risk and strategic transformation.” Seeming to be answering to worries of top leadership exodus at the micro-lender, Banda said Okai will bring the leadership, vision and strategic insight Letshego needs to secure their next phase of focus and impact, all while empowering existing and future leaders across their business and delivering long term value for investors. Letshego has a presence in 11 African counties


Okai took over from interim CEO Dumisani Ndebele who took the helm at Letshego after Smit Crouse dumped the micro-lender forcing the company to dig deep for his replacement. Crouse left Letshego without any explanation, this after his much fan fared takeover of 2018.
During his take over on Monday 24th September 2018, Crouse said, “I look forward to engaging all stakeholders of the business across our footprint, including customers, on the positioning of Letshego for the future.” The former CEO did not look forth enough as he left the micro-lender albeit abruptly resigning just after six months.


In December Letshego announced the appointment of two new directors “to add complementary financial services and banking expertise to the Group’s current fiduciary skill sets.” At that time Abiodun Odubola and Philip Odera were confirmed as Letshego’s new Independent non-executive Directors, having recently secured due regulatory approval.

POPULER BRANDS