Growing digital appetite lifts Capital Appreciation
Buoyed by the success of its software division, a growing appetite for digital transformation, as well as cloud services, fintech group Capital Appreciation (Capprec) recorded double-digit revenue growth in the six months ended September.
The JSE-listed Capprec says digital transformation and related services are also creating numerous opportunities for the group and continue to support its growth prospects over the medium-term.
Capprec reported its half-year results today, saying the performance reflected strong demand for its technology products and turnkey solutions.
In the six months, Capprec increased gross revenue for the period by 36% to R439.4 million. The fintech firm’s profit margins also improved, while earnings before interest, taxes, depreciation and amortisation grew by 70% to R138.7 million.
Headline earnings increased by 68% to R91.2 million, and basic earnings per share, as well as headline earnings per share, grew by 67% to 7.44c per share and 7.43c per share, respectively.
Capprec declared an interim dividend of 3.75c, up 50% relative to the comparative period.
“Digital transformation, as well as acceleration in demand for electronic payments, cloud services and related advances, continue to support robust growth prospects for the group over the medium-term,” says joint-CEO Bradley Sacks.
“With a well-capitalised balance sheet, robust operating cash flows and significant cash resources, the group has the ability and appetite to take advantage of organic growth opportunities available to each of its business units, as well as to consider fintech-related acquisitive opportunities.”
Sacks notes Capprec continued to attract a considerable number of new customers to its client base of blue-chip institutions in the banking, financial services, retail, telecommunications and healthcare sectors.
In the period, he says, Capprec’s payments division benefited from a strong pipeline of terminal orders, as well as pleasing growth in terminal transaction income.
Additionally, Sacks says the software division experienced a significant increase in cloud migration projects and demand for digital transformation support.
“New business efforts have opened relationships with 19 new customers since the beginning of the financial year, with a significant increase in cloud migration projects. The Amazon Web Services (AWS) partnership continued to grow.”
According to the fintech group, Synthesis, Capprec’s subsidiary, also recently achieved a milestone of 200 AWS certifications, which it says, reflects the company’s deep technical expertise.
It says: “The business also expanded into the shipping and logistics industry, after winning an RFP to build digital and AI systems for a large container shipping group operating out of Singapore. There is a massive demand for intelligent data solutions and Synthesis has attracted several new customers in financial services, telecoms, retail, healthcare services and contact centres.”
Looking ahead, Capprec says it will continue to invest for the future in critical resources to grow and deliver its products, solutions and project pipelines.
In the period under review, the fintech firm says it increased its headcount by 13%, to 365 staff members.
This, Capprec says, includes the onboarding of additional applicants in its learnership and graduate recruitment programmes, as well as several key appointments at senior levels.
“The learnership programmes now comprise 10% of the total staff complement, and provide real and measurable opportunities to young and marginalised South Africans.”