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Net1 to continue with welfare grants

Johannesburg - Net 1 UEPS Technologies [JSE:NT1] a supplier of chip card technologies and systems including its Universal Electronic Payment System said on Friday that it would continue to provide its social welfare grants distribution service to the South African Social Security Agency (Sassa) in five of South Africa's nine provinces.
   
The group entered into a new service level agreement with the Sassa replacing the previous contract that expired on June 30 2010.
   
"As was the case with the company's previous contract with Sassa, the new contract contains a standard pricing formula for all provinces based on a transaction fee per beneficiary paid, regardless of the number or amount of grants paid per beneficiary, calculated on a guaranteed minimum number of beneficiaries per month," Net1 said.
   
The new contract does however, provide for a reduction in both the level of the transaction fee per beneficiary paid and the guaranteed minimum number of beneficiaries.

"Because the company continues to derive a substantial percentage of its revenues from the Sassa contract, it expects that the terms of the new contract will materially reduce its revenues, operating income, net income and cash flow for the year ended June 30 2011," Net1 said.
   
The new agreement is expires on March 31 2011.
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