Fintech group Capital Appreciation today announced strong results for the year ended 31 March, growing revenue to R1.25 billion.
The group says its businesses demonstrated resilience in the face of a challenging economic environment by effectively growing revenue and managing expenses.
Its payments and software divisions have attracted new clients, initiated new projects with existing clients and renewed long-term contracts.
It notes the payments division has strengthened its position as one of the leading operators of payment infrastructure in South Africa by successfully executing its growth initiatives.
The software division’s financial performance was hindered by bench overcapacity; however, remediation plans are starting to take effect, improving cost management, efficiency and financial performance, Capital Appreciation adds.
The group continued to invest in growth-related initiatives, including leased terminals in payments and product development in software, it says, noting this diversification and organic expansion create significant opportunities for future growth.
The group grew gross revenue by 7.6% to R1.25 billion, and earnings before interest, taxes, depreciation and amortisation (EBITDA) by 23.3% to R333.9 million.
Earnings per share increased by 25.8%, to 17.58 cents, and headline earnings per share by 25.6% to 17.57c per share.
The group declared a final dividend of 7.50c, up 30.4%. This brings the total dividend for the year to 12c per share, representing a 20% increase over the prior year.
Capital Appreciation's largest division – payments − delivered a strong performance for the financial year, says the fintech firm.
Payments revenue increased by 21.5% to R689.2 million, with terminal sales (up 41.1%), an expanding terminal rental portfolio (up 15.3%) and transaction-related income (up 18.6%) as the primary contributors to the strong growth.
It notes that EBITDA grew by 25.4% to R297.8 million, adding that terminals in the hands of customers increased by 18.8% to 424 000, buoyed by two multi-year contracts secured in H1 25, which are expected to support terminal estate growth over their three- to five-year terms.
According to the firm, payments also continued its drive for regional expansion into Africa and beyond, through payments software initiatives and innovations, such as its “Business-in-a-Box” MicroPOS solution for small and micro-merchants.
It explains that trading conditions for the software division remained challenging, as they were buffeted by the cost and capital expenditure concerns of major clients, as well as continued delays in new project starts.
Software’s revenue for FY25 declined by 7.6% to R549 million and EBITDA by 31.8% to R61.3 million.
The company points out that the division, however, did finish the year stronger than it began. It says there are tangible signs of recovery, with an improving sales pipeline and renewal of several long-term contracts, which positions it better for FY26.
Capital Appreciation CEO Bradley Sacks says: “Capital Appreciation’s businesses are well-positioned, and the prospects are very encouraging.
“With the pace of technological advances and the digital transformation needs evident throughout the economy, we anticipate the current prospective pipeline will transform positively as business confidence and economic activity gather momentum. Several initiatives are under way, with the potential to deliver exceptional performance.”
Capital Appreciation says it continues to generate considerable cash and maintains a robust, debt-free balance sheet, with ample cash available to support organic growth, pursue acquisition opportunities, make investments and conduct additional share repurchases.
Sacks concludes: “Capital Appreciation focuses on creating sustainable value for its shareholders. We are particularly proud of our unbroken dividend record over the past eight years, returning R765.9 million, or 56.5c per share, to shareholders in the form of dividends.”
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