Fo­cus­ing on its core in­vest­ments pays off for Ec­spo­nent

The Star Early Edition - - COMPANIES - Sandile Mchunu

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.

Sus­tained growth

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.

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