Capital Appreciation sees growth in digital payments
Buoyed by bumper profits, fintech group Capital Appreciation (Capprec) says COVID-19 has catapulted the adoption of digital payment solutions, and contactless payments as a basic feature of payments will continue post the pandemic.
The company, which this morning released its financial results for the year ended March, says technology’s role as a disrupting force and differentiator in the banking and financial services sector continues to grow.
Capprec says it will continue to invest in additional capacity, including the development of new, innovative product offerings in anticipation of growth in commercial activity in both its payments and services operations.
Bradley Sacks, joint-CEO of Capprec, says technology’s “impact and effect is visible not only in new digital-related service offerings, but also in reducing operating costs and extracting greater efficiencies through automation and shared infrastructure.
“Each of Capprec’s subsidiaries has a proven, well-established reputation in such technology matters and this positions the company as a trusted partner to our clients to participate in this evolution.
“The COVID-19 pandemic has yanked the need for the economy to digitalise forward at an unprecedented rate.
“It has also underscored the importance for end-customers being able to engage and transact digitally and the demand for innovative and secure digital platforms has accelerated significantly. We expect this trend to continue, if not even increase further.”
Capprec has proprietary and licensed platforms, solutions, products and applications targeted at the business-to-business market. Its client base includes all major banking institutions in SA, as well as many niche banks, large financial services institutions, retailers and other corporate enterprises.
In the period under review, the company increased revenue by 15.4% to R701.2 million, EBITDA grew by 29.1% to R204.7 million and profit after taxation increased by 20.2% to R149.8 million.
Capprec also announced increased headline earnings by 14.2% to R142.3 million and HEPS by 28.1% to 10.67c per share against the comparable period.
For the year, the company generated R206 million in cash, translating into a cash conversion rate of 100% of trading profit.
Capprec has expanded its operational footprint outside SA and now services clients digitally in 10 other countries.
Capprec says being providers of essential services, its companies continued to operate effectively during the lockdown period.
“The well-being of our staff is paramount and our prior investments in redundancy and disaster preparedness protocols has paid dividends, allowing all services to clients to continue uninterrupted,” it notes.
Furthermore, in recent weeks, Capprec says its enterprise development affiliate GovChat and the team at Synthesis have worked closely to assist government in responding to events arising from the COVID-19 pandemic.
GovChat is the official communications platform for government.
“One of these initiatives is assisting the Department of Social Development to provide the South African Social Security Agency with a mechanism to digitalise the SRD [Social Relief of Distress] grant application process. To date, the partnership with GovChat has enabled more than 1.6 million individuals to apply for a grant electronically.”
According to Capprec, the technology platforms that underlie GovChat were developed by Synthesis and build on Synthesis’s skills in cloud computing, security and hyperscale platforms.
“This experience has not only validated the power of the Synthesis knowledge base but has confirmed the existence of a broader opportunity set in sectors such as healthcare. The range of offerings and applications offered by GovChat will continue to grow in response to the needs of government, SA citizens and SA business.”