Focusing on its core investments pays off for Ecsponent
AFRICAN financial services company Ecsponent said the decision to focus on its core investments during the 15 months to March enabled it to report a triple-digit growth for the period.
Ecsponent changed its reporting period from December to March. The company recorded growth in all its three strategic business units: investment services, business credit and equity holdings.
Under the investment services unit, it reported that investments placed under the highly successful preference share programme in South Africa and the link-loan products in Swaziland, increased 196 percent to R928 million, up from R313.8m.
The investments increased R544.8m in South Africa and R73.5m in Swaziland.
The business credit unit saw the period under review witnessing the final steps in the group’s disposal of its retail, unsecured employee benefits credit business, in favour of secured business credit to small-medium enterprises (SMEs), including enterprise finance.
This resulted in the unit’s interest income increasing by 271 percent to R232.3m. The new enterprise development sector generated R31m of this income.
The group’s equity holdings pillar was significantly bolstered with the acquisition of 10 percent of the issued share capital in MyBucks, a fintech company listed on the Frankfurt Stock Exchange.
The MyBucks group expanded rapidly in both Africa and Europe and provides a significant rand hedge. Its overall results reflected both continued and discontinued operations.
Group revenue from continuing operations increased 122 percent to R321.8m from R144.7m. Operating profit grew 416 percent to R229.2m from R44.4m. Earnings a share increased 223 percent to 8.38c from 2.59c.
Chief executive Terence Gregory said the group’s sustained growth could be attributed to the consistent performance of the continuing operations across its three core business units.
“These core business assets are identifiable by their contribution to profits,” he said.
Gregory added discontinued operations, including the disposal groups held for sale, contributed only 4 percent to operating profits.
Ecsponent’s investment in the media intelligence business, Return on Innovation, showed sustained growth as the business continued to make inroads into the niche media market space. It contributed R10.3m in revenue for the 11 months included in the group results.
“While we are proud of the group’s continued triple digit growth, this could not have happened without the clear objectives we have put in place for each of our strategic business units,” he said.