full year results presentation...telecom services: fixed and mobile data packages devices (laptops,...
Post on 19-Jul-2020
1 Views
Preview:
TRANSCRIPT
1
For the year ended
31 March 2020
FULL YEAR RESULTS PRESENTATION
2
OUTLINE
Introduction
Highlights for the period
The opportunity
Financial performance
About our investments
Prospects
1
2
3
4
5
6
3
CAPITAL APPRECIATIONWe are a financial technology company
that seeks to serve or partner with
established and emerging financial
institutions and other large corporates
PAYMENTS & PAYMENT
INFRASTRUCTURE
SOFTWARE &
SERVICES
CTA ENTERPRISE
DEVELOPMENT FUND
4
RESPONSE TO COVID-19
Group companies were classified as
essential services and were fully
operational during “Level 5 Lockdown”
ORGANISATIONAL RESPONSE
Our team’s health was our first priority
Remote work of all non-essential staff
Essential staff had protective gear and
we implemented social distancing
Regular decontamination of work area
All staff remained employed
All suppliers paid on time
OPERATIONAL RESPONSE
Client service was our priority
Prior disaster preparedness and
infrastructure investment paid
dividends
All services continued uninterrupted
Used our expertise to help Government
address the crisis – GovChat led
initatives
5
MACRO ENVIRONMENT
All sectors of economy impacted
Consumer confidence shattered
Serious unemployment crisis
Non-essential retail impacted markedly,
slow recovery
Many small businesses may not reopen
SILVER LINING AND OPPORTUNITY
Technology solutions exist to address
many key issues that have arisen
- Social distancing
- Remote work
- Remote customer engagement
- Remote learning
Era of digitalisation has been yanked
forward and likely to accelerate
Increased impetus to reduce cash
transactions
Increased focus on financial inclusion
IMPACT OF COVID-19Long-term implications are still
unknown
66
CAPITAL APPRECIATION’S POSITIONING
While challenges will undoubtedly exist
and operating conditions will be tough,
CAPPREC’s business is resilient
CAPPREC well capitalised
Experienced management team
Client exposure mostly larger, more resilient businesses
Manageable exposure to “at risk” businesses
Deep domain expertise in “high demand” areas
Accelerating need for economy to digitalise
Asset light business model with efficient working capital
7
HIGHLIGHTS
8
OPERATIONALACCOMPLISHMENTS
Proud to be associated with all major
SA banks as well as many other banks
and financial institutions, retailers and
corporates
Growth continues across all business
units with expanded and enhanced
client relationships
32% increase in number of terminals
in the hands of clients
• More than 185 000 terminals
• Good pipeline
• Scale operator with market share
gains
Concluded ISO and Aggregator
Agreement with Absa to complement
ISO and Aggregator Agreement with
Nedbank
Synthesis expands into new
verticals
Additional Amazon Web
Services (AWS) certifications
and accreditations
Synthesis a key launch partner
for launch of SA’s region
B-BBEE ratings maintained at Level 3
and will look to enhance ratings in
coming year
Expanded international service
offerings across the Group
Launched GovChat Platform...
...directed resources to assist
Government with COVID-19 response
• Dept of Social Development – SRD
Grant
• Dept of Health – Screening, Test
Facility Locator and Symptom
Monitoring tool
9
GROUP FINANCIAL HIGHLIGHTS
Fiscal 2020 -
Year Ended 31 March 2020
EBITDA R 204.7m
Trading profit R 206.1 m
Profit after tax R 149.8 m
Profit
Revenue R 701.2 m
Revenue
Payments Division R 506.2 m
Services Division R 195.0 m
29.1%
19.0%
20.2%
15.4%
7.7%
41.5%
EPS 11.24 cents
Dividends 5.00 cents
Earnings & Dividends
Capitalisation & Cash resources
Equity R 1 309.0 m
Available cash per share 39 cents
Cash available for investment R 505.1 m
17.6%
34.9%
Noteworthy observations
Cash conversion – 100% of Trading Profit
Cash balances is after cash outflows of more than
R225 million on non operational items
Items impacting results
Specific Share Repurchase and other related
transactions concluded in September 2019
Unrealized gain on open foreign exchange contract
HEPS 10.67 cents 28.1%
1010
DIVISIONAL CONTRIBUTION
REVENUE
Group Up 15.4%
Headcount grew by 68 people
across the group, up 25%
80.4%
FY19 FY20
Payments
Services
72.2%
19.6%
27.8%
EBITDA
Group Up 29.1%
79.2%
FY19 FY20
Payments
Services
75.0%
20.8%
25.0%
+ 4
1.5
%+
7.7
%
+ 2
4.1
%+
19
.6%
11
PAYMENTSHIGHLIGHTS
✓ More than 185 000 terminals in hands of clients, up 32%
✓ Continued to gain market share
✓ Annuity based Estate Management fees up 56%
✓ Strong pipeline
✓ Expanded portfolio of transaction solutions
✓ Enhanced capability of solutions
✓ Android solutions warmly received
✓ Increased operational capacity
12
SERVICESHIGHLIGHTS
✓ Strengthened relationship with existing clients
✓ New blue-chip client relationships established
✓ Secured additional AWS accreditation
✓ Continued to cement AWS leadership
✓ Diversified revenue stream
– New verticals and geographies
– Academy
– Data Science
✓ Increased operational capacity
✓ Additional partnerships with complementary technology
platforms and solutions
✓ AWS SA-based cloud region launched April 2020
13
GOVCHATPLATFORM LAUNCHED
A citizen-government
engagement platform
in cooperation with
COGTA
Platform
development being
done by Synthesis
Effective 1 March 2020
Available online,
through FB Messenger,
WhatsApp and USSD
> 80 million messages transmitted
> 2.5 million unique users
14
GOVCHAT RESPONSE TO COVID-19Screens applicants and onboards
potential “Social Relief of Distress”
(SRD) grant applicants, arguably one of
the largest digitalisation initiatives in
grant programmes across Africa
Department of Social Development
“Use case” specific
functionality
developed and
tested on existing
platform within a
week
Launched 11 May
2020
15
GOVCHAT RESPONSE TO COVID-19
Diverted resources to open Platform to
address Government’s urgent needs in
fighting the pandemic
Department of Health
Screening tools, symptom tracking, testing facility referrals, test
result notification, recent contact identification and notification,
health form onboarding
Live but not officially launched - >25 000 surveys already
16
THEOPPORTUNITY
17
Cost to serve
clients
Availability of
service
Nature of service
offered
Inclusive service
Consumer
demand pullTech Big data Regulation
New entrant
banks and
emerging
financial services
companies
Incumbent banks
and established
financial service
providers
Retailers
Telecom and
other consumer-
facing services
companies
COMPELLINGSECTOROPPORTUNITIES
We have an opportunity to disrupt the business banking market and
improve the way in which businesses bank in South Africa. We will continue
to make use of technology to understand our clients better and further
improve credit quality and client experience.
- Capitec 2020
Digital increasingly important in
a post COVID-19 world
18
AWS CAPE TOWN REGION – NOW LIVE!
23rd AWS region in the
world and the first in
Africa, comprising 3
Availability Zones
50+ AWS services
readily available
Enables compliance with
the Protection of
Personal Info Act (POPI)
Data sovereignty
concerns eliminated
Support for low latency
workloads
As a leading AWS partner Synthesis is well positioned to
benefit from this launch
Synthesis and GovChat were Key
“Launch Partners”
1919
AWS is clear market leader generating $10.2 billion in
revenue in Q1 ’20, up 33% on prior year
Source: Gartner, Goldman Sachs, Insider Inc.
PUBLIC CLOUDMARKET
Market share of global providers
20
Source: BMIT SA Cloud Computing Overview & Market Sizing 2019
R millions
CLOUD ADOPTIONIN SOUTH AFRICAIDC predicts cloud services will
generate more than 100 000 net new
jobs by 2022
CLOUD ADOPTIONSA CLOUD COMPUTING
MARKET SIZING ESTIMATE
21
Source: Flexera 2020 State of the Cloud ReportNote, excludes responses where no change stated; SMB is small or medium businesses
COVID IMPACT:GLOBAL PLANNED CLOUD USAGEMore than 50% of respondents state that
cloud usage will be higher than initially
planned
Total
Enterprise
SMB
2% 8% 31% 26%
2% 9% 29% 30%
2% 4% 37% 13%
22
Source: IDC COVID-19 Market Impact Survey
COVID IMPACT:SA TECH SPENDING PRIORITIESCurrent vs Pre-Covid
Digital employee experience: digital workspaces, collaboration…
Telecom services: fixed and mobile data packages
Devices (laptops, smartphones, tablets, etc…)
Security: architecture, governance, skills
Public Cloud Software-as-a-service (SaaS)
Mobile apps, mobile device mgmt. etc.
Big Data & Analytics
Public Cloud infrastructure-as-a-service
Robotic process automation (RPA)
Disaster recovery: own or 3rd party DC
Applications transformation: DevOps, containerisation
Enterprise networks: WAN optimization, SDN etc.
Artificial intelligence (AI)
Private / hybrid clouds
Infrastructure (datacentre hardware, servers, storage,…
Internet of Things (loT)
23
Source: IDC Industry & Company Size Spending Guide
COVID IMPACT: SA IT SPEND BY VERTICAL
Finance
Government
Communications
Manufacturing
Professional & Personal Services
Retail & Wholesale
Resource Industries
Utilities
Healthcare
Education
Transportation
Siz
eS
mall
Big
$2.1B
$1.6B
$1.5B
$1.1B
$790M
$744M
$705M
$494M
$482M
$357M
$228M
2019 IT
Spendin
g S
ize
24
COVID IMPACT ON PAYMENTS
Cash is increasingly unwelcome, limit
spread of COVID-19
Increasing interest by merchants in
digital payment
Merchants increasingly interested in
Value Added functionality
Contactless payment – promoted by
WHO
Mobile payment
QR Code payment
eCommerce
Technology is solution to financial
inclusion
25
ABOUT OURINVESTMENTS
26
CONSISTENTEXECUTIONSTRATEGY
Strategy has delivered substantial growth
and our objectives remain unchanged
since initially formulated
PARTNER INNOVATE EXECUTE
Work with financial institutions
Create ecosystems for
collaboration
B2B
B2B2C
Deliver solutions to help clients
realise their strategy
Focus on infrastructure
State of the art proprietary
technology
Entrepreneurial culture
Hardware agnostic
Add value
Integrate seamlessly with
legacy systems
Grow market
Service excellence
Alleviate pain points
User experience
Create ecosystem
Act as a innovation catalyst
for clients
Engender trust
27
PAYMENTS &PAYMENT INFRASTRUCTURE
Enables banks and corporates to
extract additional value and
differentiate at the point of acquiring
PROPRIETARY PLATFORM
Unique, proprietary technology platform enabling rapid development and
implementation of customised corporate solutions across a diverse range of
sectors
BLUE CHIP CLIENTS
Provide and operate payment and processing solutions for leading brands and
International Banks
END-TO-END
Design, develop, implement and manage innovative, end-to-end solutions thereby
enhancing and strengthening the relationships between banks, corporates and their
clients
COMPREHENSIVE OFFERINGS
Available on a turn-key all-inclusive basis or à la carte
UNIVERSAL ACQUIRING
Pioneer of “Universal Acquiring” by supporting one uniform infrastructure for
financial and non‐financial transactions
28
SUBSTANTIALGROWTH IN TERMINALESTATE
Terminals at period end, in thousands
• Number of terminals in clients’ hands grew 32% YoY,
56% 3yr CAGR
• Includes terminals subject to rental agreements
TOTAL TERMINAL ESTATE
OWNED BY CLIENTS
• Number of terminals delivered to clients grew by 39%
YoY, 77% 3yr CAGR
• Paid for at time of delivery / prior to deployment
• Start to generate recurring revenue once activated
ACTIVE – IN MARKET
• Number of terminals in use grew by 42% YoY, 62% 3yr
CAGR
• Includes terminals subject to rental contracts
• Rentals may be renewed upon expiry or replaced with
owned terminals
AWAITING DEPLOYMENT
• New terminals, once imported, are prepared for client and
readied for deployment
• Represents prospective recurring revenue once activated
• Includes ”rotating stock” for backup and replacement
32 4053
7795
117135
April'17
Sep'17
Mar'18
Sep'18
Mar'19
Sep'19
Mar'20
3248
76
103128
146
178
April'17
Sep'17
Mar'18
Sep'18
Mar'19
Sept'19
Mar'20
1622
38 40 4133 30
April'17
Sep'17
Mar'18
Sep'18
Mar'19
Sep'19
Mar'20
4960
92
118140
154
185
April'17
Sep'17
Mar'18
Sep'18
Mar'19
Sep'19
Mar'20
29
EXPANDED DEVICE PORTFOLIODiverse range, multiple platforms,
varied price points and comprehensive
use casesProprietary – Tertra/Telium
World leaders in payment devices and technology
30
WELCOME HALO SMART PAYMENTSContactless payments on any
Android device – without any
additional hardware
Halo has obtained EMV L2
Certification for Mastercard
and VISA
Developed by Synthesis
Contactless
Cards
Mobile
Wallets
Gadget
Wallets
Halo is a software application that enables contactless payment acceptance on any
NFC-enabled Android device. Supports contactless cards and mobile wallets such as
Samsung Pay. Available as an SDK for App integration.
TAP ON PHONE BENEFITS
Affordable – No additional hardware needs to be purchased
Simple – No training or device maintenance required
Eco-friendly – No paper or consumables
Safe – Contactless payments are more hygienic (as per WHO)
Secure – All payments are authorised in real-time
Supported Card Schemes
Partnering with Nedbank to introduce
Tap on Phone to South Africa
31
AFRICAN RESONANCE INVESTMENT IN CAPACITY
Surge capacity exceeded
10 500 units
AVERAGE MONTHLY TERMINALS DISPATCHED
1 600
3 900
5 900
7 300
CY 2017 CY 2018 CY 2019 Last 6 months
32
AFRICAN RESONANCE OPERATIONAL METRICS
CALL CENTRE - AVERAGE DURATION OF CALLS (in minutes)
CALLS RESULTING IN TERMINAL SWAP OUT (average across clients)
0%
5%
10%
15%
20%
25%
Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 Apr 20
00:00
02:00
04:00
06:00
08:00
10:00
Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 Apr 20
Increased capacity requried to
maintain high levels of availibility and
service levels
More than 85% of all issues
resolved remotely in less than 15
minutes
33
EVOLUTION INPAYMENT SERVICES OFFERING
Dashpay’s progress continues
✓ Merchant terminal count
increased by 58%
✓ Transaction related
revenue increased by
40%
✓ ISO and Aggregator
relationships concluded
with Nedbank and Absa
✓ Enhanced service offering
✓ Remote Terminal
Management
System (RTMS)
✓ Vouchers
✓ Loyalty
✓ eCommerce
✓ Enhanced transacting
platform
MAY ‘17 NOV ’18
R500m
R1.4bn
R2.2bn
~ 10x in
3 years
180%
57%
OCT ‘19APR‘19
R2.9bn
31%
GROSS Tx VALUE
MAR ‘20
R4.9bn
69%
34
SOFTWARE &SERVICES SEGMENT
Leading provider of technology products
and solutions within the financial services
industry
BLUE-CHIP CLIENTS
Absa, Afgri, Capitec, Investec,
Nedbank, Standard Bank, Woolworths
Financial Services and others
CLIENT CENTRIC
Delivering the highest business
value with a strong service ethic
THOUGHT LEADERS
Acquiring and retaining the best
software development skills
FOCUSED
Focus in the financial
services sector
EXPERIENCED
Highly innovative team with a track
record of only successful delivery
STRATEGIC RELATIONSHIPS
Key partnerships with Amazon’s
AWS, the top-rated provider of
cloud services globally
35
OPERATING UNITS WITHIN SYNTHESIS
SYNTHESIS LABS
Artificial intelligence, blockchain,
machine learning
SYNTHESIS ACADEMY
Technical and cloud training tailored to
organisational objectives
Cloud transformation to assist the
Enterprise in becoming cloud-ready,
execute mass migrations and harness
the benefits of public cloud platform
First AWS Advanced Consulting
partner in MEA
Delivering exceptional
end-user client experience,
web and mobile touchpoints
for financial services
institutions while maintaining
information security and
transactional integrity
Integration to enable
regulatory reporting
solutions for SARS (tax)
and SARB (balance of
payments), payment
processing and exchange
connectivity
DIGITAL
CHANNELS
CLOUD PLATFORM INTEGRATION
PRODUCTS
• Data Intelligence is a
critical to drive business
success
• Our team of Machine
Learning Engineers and
Data Scientists are
enabling clients to become
truly Data-Driven
• Strategic use of data leads
to higher customer
satisfaction and improved
competitiveness
• 24 x 7 x 365 support
and management of
high availability Cloud
and hyper-scale
infrastructure
• Remote upkeep and
strategic improvements
to alleviate client
operational concerns
• Service contracts are
long term and annuity in
nature
DATA &
ANALYTICS
MANAGED
SERVICES
(MSP)
3636
Financial Services Competency
DevOps Competency
Well Architected Framework
Competency
Channel Partner
SaaS Partner
CAPE TOWN REGION LAUNCHINITIATIVE
Synthesis develops suite of
“Launch Products”
3737
PRIOR CASESTUDIES
Use of AI and
machine learning in
brand management
24/7/365 cloud managed
infrastructure services
globally
RegTech
&
Customer
Engagement
Financial services in
agricultural sector
Outcomes-driven
e-Learning LMS-based
training to client
organisations
SYNTHESIS ACADEMY
RegTech
Platform
Solution
3838
CRACKING MACHINE
LEARNING TO
SPEED UP CLIENT
SERVICES
Machine Learning and Robotics
address the challenge of email routing
– enhanced capabilities operating 24/7
ensures speedy response times
‘What struck me is that
Synthesis used design
thinking to truly understand
what the problem was. In a
very short time they created
a prototype, tested it with
users and then adapted it.
The solution they created
revolved around genuine
client satisfaction and not
just completing a task, and
that worked for us”, says
Bandyopadhyay.
Indranil Bandyopadhyay,
Head of Business IT
Enablement for Nedbank
Insurance
39
“UNATHI” –GOVCHAT’S NATURAL LANGUAGE CHATBOT
Rate over 60 000
Government spaces and
services provided
Hospitals, Police Stations, Post Office
branches, Home Affairs, Early
Childhood Centres…
Report on Municipal services
Water, refuse, potholes…
Identify local representatives
or traditional leaders
COVID-19 health tools
COVID-19 SRD grant
application management
...more to come...
Cloud native, hosted on AWS
Backend Dashboards
Issue Reporting
SRD Grant Applications by Province
4040
Fully “serverless” architecture
• No servers…at all!
• Cloud native architecture, fully
managed by AWS
• Easily replicated for other
geographies and use cases
Dynamic scalability
• Scales up to meet user demand,
and back down to save on costs
• Allows for a fixed cost per
interaction with close to zero
overheads
• A model that suits the smallest to
the largest population, true scale
AI-driven natural language experience
• Highly intuitive digital interface for
even the least sophisticated user
• Over the ubiquitous WhatsApp
messaging platform
• Ability to detect sentiment and learn
from prior interactions
GOVCHAT’S HYPER-SCALE DYNAMIC COST EFFECTIVE INFRASTRUCTURE First 3 days post launch, peaking
at ~600k messages per hour
The following 11 days, constant
usage peaking at ~150k per hour
SRD Use Case Platform Activity
41
FINANCIALPERFORMANCE
42
Revenue Growth – 8% YoY
6 Yr CAGR - 50%
EBITDA Growth – 20% YoY
6 Yr CAGR - 61%
FINANCIALPERFORMANCE
Payments & Payment Infrastructure
Division
44
.2
14
0.7 1
96
.1
20
2.9
41
5.1 4
69
.9 50
6.2
9.4 2
4.9
42
.1 77
.5
15
1.7
13
5.3
16
1.8
0
100
200
300
400
500
600
FY '14 FY '15 FY '16 FY '17 FY '18 FY '19 FY '20
Revenue EBITDA
R million
43
41
.6
46
.1
51
.9
77
.6 93
.1
13
7.8
19
5.0
12
.6
15
.9
19
.8 29
.9
33
.9 43
.3 53
.8
0
50
100
150
200
250
FY '14 FY '15 FY '16 FY '17 FY '18 FY '19 FY '20
Gross Revenue EBITDA
R million
FINANCIALPERFORMANCE
Software & Services Division
Revenue Growth
– 41% YoY
6 Yr CAGR – 29%
EBITDA Growth –
24% YoY
6 Yr CAGR – 27%
EBITDA is after expensing
additional ramp-up costs related
to AWS Cloud Migration projects,
the benefits of which will accrue
in subsequent periods
The benefit of last
year’s
expenditures is
visible in this
year’s growth
44
(R million) 31 March 2020 31 March 2019% increase /
(decrease)
Revenue 701.2 607.7 15.4%
Operating expenses 143.2 128.0 11.9%
EBITDA 204.7 158.6 29.1%
Trading profit 206.1 173.2 19.0%
Finance income 38.7 38.3 1.0%
Profit before taxation 206.0 173.8 18.5%
Profit after tax 149.8 124.6 20.2%
Normalised profit after tax 141.7 136.6 3.7%
Earnings per share (cents) 11.24 8.33 34.9%
Headline earnings per share (cents) 10.67 8.33 28.1%
Normalised headline earnings per share (cents) 10.63 9.13 16.4%
Cash earnings per share (cents) 11.12 10.06 10.6%
Number of shares in issue (millions) 1 310.0 1 555.0
Number of shares in issue, net of treasury shares
(millions)1 201.2 1491.4
Strong growth from all
divisions
Includes gain on sale of
Australia (R8.7m) and
unrealised profit on open
forward FX contract
(R14.6m)
Repurchased 45.1m
treasury shares
Total number of treasury
shares is 108.8m
After reversal of
amortisation of intangibles
arising from acquisitions,
unrealised profit on FX
contract and capital profit
related to sale of
Resonance Australia
Includes development of
new innovative products
and building of operating
capacity
245m ordinary shares
cancelled in September
GROUP SUMMARISED STATEMENT OF COMPREHENSIVE INCOME
45
(R million) 31 March 2020 31 March 2019 Growth
Payments & Payment Infrastructure division
Terminal rental income 32.5 79.3 (59.0%)
Maintenance and support service fees from terminals 115.4 73.9 56.0%
Sale of terminals 331.6 290.9 14.0%
Transaction related income from terminals 21.2 15.1 40.4%
Other revenue 5.5 10.7 (48.6%)
Total 506.2 469.9 7.7%
Software & Services division
Services and consultancy fees 153.0 102.2 49.8%
Licence and subscription fees 36.4 32.9 10.6%
Hardware 5.6 2.7 107.4%
Total 195.0 137.8 41.5%
Total revenue 701.2 607.7 15.4%
Geographic region
South Africa 679.9 594.2 14.4%
Rest of the world 21.3 13.5 57.8%
Total revenue 701.2 607.7 15.4%
Recurring income continues to increase and constitutes c.48.1% of total revenue in 2020 (2019: 47.4%)
DIVISIONAL REVENUE COMPOSITION
Aligned to growth of
deployed estate
AR rental contracts
reaching maturity replaced
by terminal sales
Growth in transaction
activity and deep VAS
solution uptake
Will continue to be a focus
in coming periods
Reflects material growth in
Cloud activities
46
(R million) 31 March 2020 31 March 2019
ASSETS
Goodwill 728.6 728.6
Intangible assets 61.8 62.3
Other non-current assets 60.7 72.2
Non-current assets 851.1 863.1
Cash and cash equivalents 505.1 611.2
Other current assets 91.6 70.3
Total assets 1 447.8 1 544.6
EQUITY AND LIABILITIES
Equity 1 309.0 1 447.1
Non-current liabilities 40.8 34.6
Current liabilities 98.0 62.9
Total equity and liabilities 1 447.8 1 544.6
NAV per share (cents) 109.0 97.0
Cash available per share (cents) 38.6 39.3
Available for investment
in organic growth and
acquisition opportunities
After using c.R225m in
cash during the year on
the Specific Share
Repurchase and open
market share repurchases
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Uncomplicated Balance
Sheet
47
CASH FLOW (KEY FEATURES)
(R million) 31 March 2020 31 March 2019
Cashflow from operations 206.1 212.7
Proceeds from disposal of associate 35.0 -
Changes in working capital 23.8 51.7
Finance income 38.7 38.3
Acquisition of property, plant and equipment (17.8) (16.5)
Repurchase of 245 million ordinary shares (cancelled) (192.7)
Purchase of 45.1 million treasury shares (2019: 8.0 million) (33.9) (7.1)
Taxation paid (57.8) (62.3)
Dividends paid (57.8) (63.6)
Cash & cash equivalents at period end 505.1 611.2
Increased even with lower
cash balances
Effective asset
management
Total of 108.8 million
shares at an average price
of 76 cents per share
Resources to fund organic
growth and acquisitions
48
PROSPECTS
4949
• Accelerated growth in POS device estate as
penetration increases in banking as well as
SMME sector
• Introduction of new platforms will generate new
growth and open up new market segments
• New product pipeline
PAYMENTS & PAYMENT INFRASTRUCTURE SOFTWARE & SERVICES
• Strong and growing adoption of cloud-based
solutions
• Regulatory compliance requirements
• Further international expansion
• Significant opportunity in new technologies
• A broad range of organic as well as acquisitive growth opportunities available to CAPPREC
• Acquisition activity will depend on strategic fit as well as valuations
• Economic climate is impacting our clients and remain present in our planning
GROWTH OPPORTUNITIES
GENERAL PROSPECTSCapital Appreciation is well capitalised,
with the management skills and
technology to drive it’s growth strategy.
50
OUR INVESTMENTCASE – A STRONG FOUNDATION ON WHICH TO GROW
✓ Seasoned management team – been through prior tough business cycles
✓ Well-positioned in an industry with healthy organic growth prospects
✓ A trusted partner to a strong network of large financial institutions
✓ Clients are well capitalised and established
✓ Diversified customer base
✓ Clients already have a presence in Africa – providing the potential ability for
CAPPREC to expand regionally with them
✓ Well-established FinTech subsidiaries with strong track records
Innovation Quality execution Financial performance
✓ Subsidiaries have strong organic growth prospects and acquisition opportunities
✓ Strong Group balance sheet with adequate headroom for organic and acquisitive
growth
✓ Subsidiaries are highly cash generative
✓ Our products and services are targeted at mission-critical applications
51
T H A N K Y O U
5252
AEDO Authenticated early debit order
AI Artificial intelligence
ATM Automated teller machine
AWS Amazon Web Services
B2B Business to business
B2B2C Business to business to consumer
B-BBEE Broad-Based Black Economic Empowerment
Bn Billion
CAGR Compound annual growth rate
CAPPREC Capital Appreciation Limited
Cash EPS Cash flow from operations, less taxation paid, divided by
weighted average number of shares in issue
CLC Code line clearing
CRM Customer relationship management
EBIT Earnings before interest and tax
EBITDA Earnings before interest, tax, depreciation and
amortisation
EFT Electronic fund transfer
EMV Europay, Mastercard, Visa
EPS Earnings per share
FinTech Financial technology
FY Fiscal year
GTV Gross transaction value
HEPS Headline earnings per share
IaaS Infrastructure as a Service
ISO Independent sale organisation
IT Information technology
M Million
NA Not available
NAEDO Non-authenticated early debit order
NAV Net asset value
NFC Near field communication
NHEPS Normalised headline earnings per share
NM Not meaningful
PaaS Platform as a Service
POS Point of sale
R Rand
R&D Research and development
REIT Real Estate Investment Trust
RTC Request to credit
SA South Africa
SaaS Software as a Service
SARB South African Reserve Bank
SARS South African Revenue Services
SDK Software Development Kit
SME Small and medium enterprise
Tx Transaction
US$ United States Dollar
ZAR South African Rands
GLOSSARY
top related