Capital Appreciation’s full-year arnings show a decline
JSE-LISTED financial technology company Capital Appreciation yesterday reported a full-year earnings decline, largely due to the delayed delivery of a substantial order of terminals after the year-end cut-off period.
As a result, the group reported an 11.1 percent decline in headline earnings to R126.4 million for the year to end March and a 3.1 percent decline in headline earnings per share to 10.34 cents a share while earnings per share fell by 8.5 percent to 10.28c. Its revenue declined by 11.7 percent to R619.5 million and earnings before interest, tax, depreciation and amortisation (Ebitda) declined by 15.5 percent to R172.9m.
Joint chief executive Brad Sacks said the company’s operations performed extremely well under the circumstances of generally declining economic conditions compounded by the Covid-19 outbreak. “We attracted new customers locally and abroad, gained strong traction in the roll-out of our Android platforms, launched new products and accelerated our annuity income. This and stringent cost control resulted in healthy cash generation,” Sacks said.
The group increased its cash generation by 6.6 percent to R538.3m and declared a final dividend of 300c, bringing the total dividend to 550c, up by 10 percent compared to last year.
Sacks said the financial impact of the pandemic resulted in a reduced number of retail merchants serviced through their banking clients.
“Given the economic uncertainty, many of our institutional clients adopted a cautious ‘wait and see’ attitude towards infrastructure expansion and capital expenditure. “Each of our divisions retained existing clients and attracted several new high-profile clients. We have been pleased by the recovery in activity since the start of the 2021 calendar year,” he said.
The group’s payments division reported a 21.5 percent decline in revenue to R397.4m and a 13.2 percent decline in Ebitda to R140.4m while profit after tax declined by 2.6 percent to R112.3m, mainly due to Covid-19-related impacts. However, the group said the division grew market share with customers increasing terminals held by 17 percent to more than 217 000 units.
The division’s Ebitda increased by 6.8 percent to R57.5m and profit after tax by 2.8 percent to R37.9m. Capital Appreciation’s shares rose by 0.86 percent to close at R1.17 on the JSE yesterday.