Faster growth needed
Purple Group, owners of Easy Equities and GT247, published results showing a very tough environment. The company wrote down its Real People holding and this cost it some R43m of a total loss of just over R61m. So even without the write-down, the group reported a loss for the six months ending February. GT247 was hit hard as profits dropped from over R28m to just over R1m.
But the real story and the future of Purple is all about Easy Equities, and while the brand saw great client additions and revenue growth, it still lost just over R15m on revenue of R3.4m. The revenue was up 116.9% but it needs to be growing much faster, and CEO Charles Savage says it needs extra cash, with the theory being that around R75m is needed.
The problem is finding the cash. A rights issue seems out of the question or the company would have done it already, and I know it has been seeking the money for about the last 18 months with no success. I am not sure what the outcome will be if it does not get the much-needed cash or even if it will be enough. What is very important is that your shares at Easy Equities are safe regardless of what happens to the company.