for the six months ended 30 september - capital appreciation · absent terminal delivery delay,...
TRANSCRIPT
Un
aud
ited
Inte
rim C
ond
ense
d
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
end
ed 3
0 S
epte
mb
er 2
019
and
Cas
h D
ivid
end
Dec
lara
tion
1
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
Una
udite
d R
esul
tsFo
r the
six
mon
ths
endi
ng 3
0 S
epte
mbe
r 201
9
2
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
2
OU
TLIN
E
CA
PP
RE
C o
verv
iew
Hig
hlig
hts
for t
he p
erio
d
The
oppo
rtuni
ty
Fina
ncia
l per
form
ance
Abo
ut o
ur in
vest
men
ts
Pro
spec
ts
1 2 3 4 5 6
3
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
3
AB
OU
T C
API
TAL
APP
REC
IATI
ON
We
are
a fin
anci
al te
chno
logy
com
pany
that
see
ks to
ser
ve o
r par
tner
with
est
ablis
hed
and
emer
ging
fin
anci
al in
stitu
tions
and
oth
er la
rge
corp
orat
es
Paym
ents
& P
aym
ent
Infr
astr
uctu
reSo
ftwar
e &
Ser
vice
s
AF
RI
CA
N
CTA
Ent
erpr
ise
Dev
elop
men
t Fun
d
CTA
35%
4
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
4
HIG
HLI
GH
TS
5
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
5
INTR
OD
UC
TORY
CO
NSI
DER
ATIO
NS
–H
1 FY
’20
DEL
AY IN
DEL
IVER
IES
FRO
M S
UPP
LIER
INVE
STM
ENT
INO
PER
ATIN
GIN
FRAS
TRU
CTU
RE
Pro
duct
ion
and
deliv
ery
dela
ys fr
om a
sup
plie
r del
ayed
a s
ubst
antia
l ord
er a
nd
our a
bilit
y to
rece
ive,
pro
cess
and
dis
tribu
te te
rmin
als
to c
lient
s in
Sep
tem
ber.
The
term
inal
s w
ere
deliv
ered
to c
lient
s in
ear
ly O
ctob
er a
nd th
e re
venu
e, p
rofit
an
d ca
sh fl
ow w
ill re
flect
in H
2.
Sub
sidi
arie
s ar
e ge
nera
ting
subs
tant
ial t
op-li
ne g
row
th a
nd in
vest
men
t in
capa
city
to a
ccom
mod
ate
futu
re g
row
th is
inco
rpor
ated
in th
is p
erio
d’s
resu
lts.
This
inve
stm
ent i
s in
ant
icip
atio
n of
futu
re in
crea
sed
activ
ity.
6
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
6
TRAN
SAC
TIO
NS
ANN
OU
NC
ED IN
JU
NE
CO
MPL
ETED
17
SEPT
EMB
ER 2
019
CTA
acq
uire
d al
l IP
unde
rlyin
g A
frica
n R
eson
ance
Lice
nce
agre
emen
t re
Das
hpay
’stra
nsac
tion
proc
essi
ng p
latfo
rm•
Acc
ess
to s
ourc
e co
de•
Allo
w fo
r ind
epen
dent
de
velo
pmen
t
CTA
acq
uire
d la
rge
com
plem
ent o
f sk
illed
dev
elop
men
t tal
ent
Tran
sact
ion
rece
ived
97%
sh
areh
olde
r app
rova
l
CTA
acq
uire
d 24
5 m
illio
n sh
ares
hel
d by
Dr.
Nei
shlo
san
d re
late
d pa
rties
at
80 c
ents
per
sha
re
Can
cella
tion
of s
hare
s ac
quire
d re
duce
s sh
ares
in is
sue
by c
.16%
CTA
sol
d its
inte
rest
in R
eson
ance
A
ustra
lia
Dr.
Nei
shlo
san
d E
itan
Nei
shlo
sre
sign
ed fr
om B
oard
of C
TA
Abs
olut
e al
ignm
ent o
f de
velo
pmen
t tea
ms
and
busi
ness
uni
ts
unde
rway
Incr
ease
d co
ordi
natio
n of
dev
elop
men
t re
sour
ces
acro
ss a
ll bu
sine
ss u
nits
7
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
7
OPE
RAT
ION
AL
AC
CO
MPL
ISH
MEN
TS
Expa
nded
and
enh
ance
d cl
ient
rela
tions
hips
in b
oth
the
Paym
ents
an
d So
ftwar
e di
visi
ons
Synt
hesi
s C
ape
Tow
n m
akin
g gr
eat s
tride
s in
the
reta
il se
ctor
Addi
tiona
l Am
azon
Web
Ser
vice
s (A
WS)
cer
tific
atio
ns a
nd
accr
edita
tions
31%
incr
ease
in n
umbe
r of t
erm
inal
s in
the
hand
s of
clie
nts
•M
ore
than
150
000
term
inal
s•
Goo
d pi
pelin
e•
Scal
e op
erat
or w
ith m
arke
t sha
re g
ains
Das
hpay
cont
inue
s it’
s ph
ased
dep
loym
ent o
f tra
nsac
tion
serv
ices
with
mor
e th
an 1
00%
gro
wth
in g
ross
tran
sact
ion
valu
e (G
TV) s
ince
last
yea
r
B-BB
EE ra
ting
•Af
rican
Res
onan
ce –
Leve
l 3 c
ontri
buto
r•
Synt
hesi
s –
Leve
l 3 c
ontri
buto
r•
B-BB
EE s
pend
con
sist
ent w
ith p
rior p
erio
ds
* Bas
ed o
n G
TV th
roug
h th
e D
ashp
ayne
twor
k in
Oct
ober
201
9 an
nual
ised
Con
clud
ed “I
SO A
gree
men
t” w
ith A
bsa
to c
ompl
emen
t ISO
ag
reem
ent w
ith N
edba
nk a
nd “A
ggre
gato
r Agr
eem
ent”
with
M
erca
ntile
Ban
k
Prou
d to
be
asso
ciat
ed w
ith a
ll m
ajor
SA
bank
s an
d al
so m
any
othe
r ban
ks a
nd fi
nanc
ial i
nstit
utio
ns
Con
clud
ed te
rmin
al d
istri
butio
n ag
reem
ent w
ith w
orld
’s s
econ
d la
rges
t man
ufac
ture
r of p
aym
ent t
erm
inal
s
8
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
8
GR
OU
P FI
NA
NC
IAL
MET
RIC
S
EBIT
DA
R 6
7.9
milli
on
Trad
ing
prof
itR
68.
2 m
illion
Prof
it af
ter t
axR
57.
9 m
illion
Nor
mal
ised
pro
fit a
fter t
axR
55.
9 m
illion
HEP
S3.
43 c
ents
NH
EPS
3.81
cen
ts
Div
iden
ds2.
25 c
ents
Earn
ings
& D
ivid
ends
Cap
italis
atio
n &
Cas
h re
sour
ces
Equi
tyR
1.4
57 b
illion
Avai
labl
e ca
sh p
er s
hare
32 c
ents
Cas
h av
aila
ble
for i
nves
tmen
tR
415
.9 m
illion
Prof
it
Six
mon
ths
ende
d 30
Sep
tem
ber 2
019
NAV
per
sha
re97
cen
ts
Rev
enue
R 2
81.6
mill
ion
Rev
enue
Paym
ents
Div
isio
nR
186
.3 m
illion
Serv
ices
Div
isio
nR
95.
3 m
illion
(16.
8%)
(17.
6%)
(8.6
%)
(17.
9%)
(10.
7%)
(26.
5%)
54.0
%
(16.
3%)
0%
(5.4
%)
(14.
0%)
(24.
6%)
4.8%
(19.
0%)
Abse
nt te
rmin
al
deliv
ery
dela
y,
Paym
ents
D
ivis
ion
reve
nue
wou
ld h
ave
exce
eded
prio
r pe
riod
Cas
h ba
lanc
e at
31
Oct
ober
201
9 w
as R
482m
, re
flect
ing
R66
m
of n
et c
ash
inflo
w in
Oct
ober
9
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
9
(DEC
REA
SE) /
INC
REA
SE
VS. P
RIO
R54.0
%(2
6.5%
)
Pay
men
tsS
ervi
ces
66.2
%
33.8
%
FY18
FY19
DIV
ISIO
NA
L PE
RFO
RM
AN
CE
REV
ENU
E
Paym
ents
Serv
ices
PAYM
ENTS
& P
AYM
ENT
INFR
ASTR
UC
TUR
ESO
FTW
ARE
& S
ERVI
CES
•M
ore
than
150
000
term
inal
s in
han
ds o
f clie
nts
•N
ew b
lue-
chip
clie
nt re
latio
nshi
ps e
stab
lishe
d•
Stro
ng p
ipel
ine
•C
ontin
ued
to in
crea
se th
e nu
mbe
r of t
erm
inal
s su
pplie
d to
mar
ket
•C
ontin
ued
inve
stm
ent i
n an
d de
velo
pmen
t of i
nnov
ativ
e pl
atfo
rms
and
prod
ucts
•C
ontin
uing
with
del
iber
ate,
pro
gres
sive
roll-
out o
f Das
hpay
serv
ices
•In
crea
sed
oper
atio
nal c
apac
ity
•St
reng
then
ed re
latio
nshi
p w
ith e
xist
ing
clie
nts
•N
ew b
lue-
chip
clie
nt re
latio
nshi
ps e
stab
lishe
d•
Secu
red
addi
tiona
l AW
S ac
cred
itatio
n•
Con
tinue
d to
cem
ent A
WS
lead
ersh
ip•
Div
ersi
fied
reve
nue
stre
am•
Incr
ease
d op
erat
iona
l cap
acity
•Ad
ditio
nal p
artn
ersh
ips
with
com
plem
enta
ry te
chno
logy
pla
tform
s an
d so
lutio
ns
•AW
S SA
bas
ed re
gion
al d
ata
cent
re to
ope
n in
H1
2020
HIGHLIGHTS
(DEC
REA
SE) /
INC
REA
SE
VS. P
RIO
R47.8
%(2
9.6%
)
Pay
men
tsS
ervi
ces
64.5
%
35.5
%
FY18
FY19
EBIT
DA
80.4 %
19.6
%
79.2 %
20.8
%
Paym
ents
Serv
ices
10
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
10
REP
RES
ENTA
TIVE
CLI
ENTS
Serv
ices
Paym
ents
OTH
ER R
ETAI
LER
S
11
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
11
GO
VCH
AT -
OFF
ICIA
L LA
UN
CH
A ci
tizen
-gov
ernm
ent
enga
gem
ent p
latfo
rm in
co
oper
atio
n w
ith C
OG
TA
Plat
form
dev
elop
men
t be
ing
done
by
Synt
hesi
s
ELD
RID
JO
RD
AAN
C
EO &
FO
UN
DER
DEP
UTY
MIN
ISTE
R O
F C
OM
MU
NIC
ATIO
NS,
H
ON
. PIN
KY
KEK
ANA
PRES
IDEN
CY’
S D
EPU
TY D
G,
HO
N. M
ATSI
ETSI
MO
KH
OLO
“4IR
” #L
ETST
ALK
–AB
SA, S
YNTH
ESIS
, G
OVE
RN
MEN
T &
MTN
12
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
12
THE
OPP
OR
TUN
ITY
13
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
13
CO
MPE
LLIN
G S
ECTO
R O
PPO
RTU
NIT
IES
Cos
t to
serv
e cl
ient
s
Avai
labi
lity
of s
ervi
ce
Nat
ure
of s
ervi
ce
Incl
usiv
e se
rvic
e
Con
sum
er d
eman
d pu
ll
Tech
Big
dat
aR
egul
atio
n
New
ent
rant
ban
ks a
nd
emer
ging
fina
ncia
l se
rvic
es c
ompa
nies
Incu
mbe
nt b
anks
and
es
tabl
ishe
d fin
anci
al
serv
ice
prov
ider
s
Ret
aile
rsTe
leco
m a
nd o
ther
co
nsum
er-fa
cing
se
rvic
es c
ompa
nies
14
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
14
AWS
is c
lear
mar
ket
lead
er g
ener
atin
g $9
bi
llion
in re
venu
e in
Q
3 ‘1
9 vs
. $7
billi
on
in p
rior y
ear
Sour
ce: G
artn
er, G
oldm
an S
achs
, Ins
ider
Inc.
PUB
LIC
CLO
UD
MA
RK
ET
15
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
15
CLO
UD
AD
OPT
ION
IN S
OU
TH A
FRIC
A
CLO
UD
AD
OPT
ION
SA C
LOU
D C
OM
PUTI
NG
MAR
KET
SIZ
ING
EST
IMAT
E
Sour
ce: B
MIT
SA
Clo
ud C
ompu
ting
Ove
rvie
w &
Mar
ket S
izin
g 20
19
IDC
pre
dict
s cl
oud
serv
ices
will
gen
erat
e m
ore
than
100
000
net
new
jobs
by
2022
R m
illio
ns
16
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
16
AWS
CA
PE T
OW
N D
ATA
CEN
TRE
LAU
NC
H H
1 ‘2
0
Mat
eria
l inv
estm
ent
by A
maz
on fo
r Afr
ica
regi
on
Mar
ketin
g of
clo
ud
offe
ring
in a
dvan
ce o
f la
unch
Rem
oves
“la
tenc
y”
and
“dat
a so
vere
ignt
y”
conc
erns
Synt
hesi
s w
ell p
ositi
oned
to b
enef
it fr
om th
is la
unch
17
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
17
CLO
UD
PLA
TFO
RM
S IN
DIS
PEN
SIB
LE
Voda
com
is s
tart
ing
to m
ove
its s
ervi
ces
to th
e AW
S cl
oud
alre
ady
but a
lot o
f ser
vice
s,
espe
cial
ly w
here
ther
e ar
e la
tenc
y is
sues
, will
be
func
tiona
l ear
ly n
ext y
ear o
nce
the
AWS
regi
on is
fully
ope
ratio
nal i
n So
uth
Afric
a.
“”
Sham
eelJ
oosu
b C
EO o
f Vod
acom
For S
tand
ard
Ban
k G
roup
to re
mai
n a
lead
er in
Afr
ican
fina
ncia
l ser
vice
s, w
e re
cogn
ize
we
need
to
ado
pt a
clo
ud-fi
rst a
ppro
ach
to o
ur b
usin
ess,
” sa
id G
roup
CEO
Sim
Tsh
abal
ala.
"AW
S C
loud
te
chno
logy
will
cre
ate
a sp
ringb
oard
for S
tand
ard
Ban
k G
roup
, hel
ping
us
to ra
pidl
y ro
ll ou
t our
di
gitiz
atio
n an
d da
ta s
trat
egy
to b
ette
r cat
er to
cus
tom
ers
who
se n
eeds
are
con
stan
tly
evol
ving
."
He
says
the
mov
e w
ill a
llow
the
bank
to "
build
Afr
ica’
s fin
anci
al s
ervi
ces
orga
niza
tion
of th
e fu
ture
and
to b
e po
sitio
ned
as m
ore
than
a b
ank”
usi
ng A
WS’
s ag
ility
and
sec
urity
com
bine
d w
ith S
tand
ard
Ban
k’s
"cus
tom
er o
bses
sion
.
“
”Si
m T
shab
alal
a,
Gro
up C
EO o
f St
anda
rd B
ank
18
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
18
AB
OU
T O
UR
INVE
STM
ENTS
19
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
19
CO
NSI
STEN
T EX
ECU
TIO
N S
TRAT
EGY S
tate
of t
he a
rt pr
oprie
tary
tech
nolo
gy
plat
form
s fo
r ser
vice
s
Ent
repr
eneu
rial c
ultu
re
Har
dwar
e ag
nost
ic
Inte
grat
e se
amle
ssly
with
lega
cy
syst
ems
Add
val
ue
Gro
w m
arke
t
Ser
vice
exc
elle
nce
Alle
viat
e pa
in p
oint
s
Use
r exp
erie
nce
Cre
ate
ecos
yste
m
Eng
ende
r tru
st
Act
as
an in
nova
tion
cata
lyst
for c
lient
s
Wor
k w
ith fi
nanc
ial i
nstit
utio
ns
Cre
ate
ecos
yste
ms
for
colla
bora
tion
B2B
2C
Del
iver
sol
utio
ns to
hel
p cl
ient
s
real
ise
thei
r stra
tegy
Focu
s on
infra
stru
ctur
e
B2B
Stra
tegy
has
del
iver
ed s
ubst
antia
l gro
wth
and
our
obj
ectiv
es r
emai
n un
chan
ged
sinc
e in
itial
ly fo
rmul
ated
PAR
TNER
INN
OVA
TEEX
ECU
TE
20
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
20
PAYM
ENTS
& P
AYM
ENT
INFR
AST
RU
CTU
RE
SEG
MEN
T
BLU
E C
HIP
CLI
ENTS
Prov
ide
and
oper
ate
paym
ent a
nd p
roce
ssin
g so
lutio
ns fo
r lea
ding
bra
nds
and
Inte
rnat
iona
l Ban
ks
PRO
PRIE
TAR
YPL
ATFO
RM
Uni
que,
pro
prie
tary
tech
nolo
gy
plat
form
ena
blin
g ra
pid
deve
lopm
ent a
nd im
plem
enta
tion
of c
usto
mis
ed c
orpo
rate
sol
utio
ns
acro
ss a
div
erse
rang
e of
sec
tors
END
-TO
-EN
D
SOLU
TIO
NS
Des
ign,
dev
elop
, im
plem
ent a
nd
man
age
inno
vativ
e, e
nd-to
-end
so
lutio
ns th
ereb
y en
hanc
ing
and
stre
ngth
enin
g th
e re
latio
nshi
ps
betw
een
bank
s, c
orpo
rate
s an
d th
eir c
lient
s
CO
MPR
EHEN
SIVE
O
FFER
ING
S
Avai
labl
e on
a tu
rn-k
ey a
ll-in
clus
ive
basi
s or
à
la c
arte
UN
IVER
SAL
ACQ
UIR
ING
Pion
eer o
f “U
nive
rsal
Ac
quiri
ng” b
y su
ppor
ting
one
unifo
rm in
frast
ruct
ure
for f
inan
cial
and
no
n‐fin
anci
al tr
ansa
ctio
ns
Man
ages
PO
S te
rmin
al e
stat
es a
t sca
le
Enab
les
bank
s an
d co
rpor
ates
to e
xtra
ct a
dditi
onal
val
ue a
nd d
iffer
entia
te a
t the
poi
nt o
f acq
uirin
g
21
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
21
PAYM
ENTS
REV
ENU
E M
OD
EL
MAI
NTE
NAN
CE
& S
ERVI
CES
•G
ener
ates
mon
thly
re
curr
ing
reve
nue
depe
ndin
g on
leve
l an
d sc
ope
of s
ervi
ces
cont
ract
ed
TRAN
SAC
TIO
NS
•Va
riabl
e ba
sed
on
trans
actio
n ty
pe a
nd
valu
e of
tran
sact
ion
LIC
ENSI
NG
&SO
LUTI
ON
S
•G
ener
ates
mon
thly
re
curr
ing
reve
nue
depe
nden
t on
solu
tion
•Fl
at fe
e•
Com
mis
sion
POS
ESTA
TE
MAN
AGEM
ENT
•G
ener
ates
mon
thly
re
curr
ing
reve
nue
depe
ndin
g on
leve
l an
d sc
ope
of s
ervi
ces
cont
ract
ed
POS
DEV
ICES
•Te
rmin
al s
ales
ge
nera
te g
ross
pro
fit•
Ren
tals
gen
erat
e m
onth
ly re
curr
ing
reve
nue
•R
elat
ions
hip
with
m
ajor
clie
nts
subj
ect
to lo
ng-te
rm m
aste
r su
pply
agr
eem
ents
Pred
icta
ble
but
lum
pyR
ecur
ring
reve
nue
tied
to th
e si
ze o
f th
e es
tate
Rec
urrin
g re
venu
e an
d pr
edic
tabl
eU
nlim
ited,
sub
ject
to
est
ablis
hed
econ
omic
mod
els
Unl
imite
d
22
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
22
EXIS
TIN
G R
ELAT
ION
SHIP
WIT
H L
EAD
ING
TER
MIN
AL
SUPP
LIER
Exte
nsiv
e ra
nge
of te
rmin
als
23
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
23
NEW
TER
MIN
AL
DIS
TRIB
UTI
ON
AG
REE
MEN
TAg
reem
ent f
or d
istr
ibut
ion
and
use
of N
ewla
nd P
aym
ent T
echn
olog
y te
rmin
als
NP
T, w
orld
’s s
econ
d la
rges
t man
ufac
ture
r of
paym
ent t
erm
inal
s
In re
spon
se to
clie
nt
dem
and
for a
dditi
onal
op
tions
and
pric
e po
ints
24
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
24
3240
53
7795
120
Apr
il'1
7S
ep '17
Mar '18
Sep '18
Mar '19
Sep '19
SUB
STA
NTI
AL
GR
OW
TH IN
TER
MIN
AL
ESTA
TETe
rmin
als
at p
erio
d en
d, in
thou
sand
s
OW
NED
BY
CLI
ENTS
AC
TIVE
–IN
MA
RK
ETA
WA
ITIN
G D
EPLO
YMEN
T
•N
umbe
r of t
erm
inal
s de
liver
ed to
cl
ient
s gr
ew b
y 14
%in
the
last
6
mon
ths
and
42%
sinc
e Se
ptem
ber
2018
(52%
with
out d
eliv
ery
dela
y)
•Pa
id fo
r at t
ime
of d
eliv
ery
•St
art t
o ge
nera
te re
curr
ing
reve
nue
once
act
ivat
ed
•N
umbe
r of t
erm
inal
s in
use
gre
w b
y 23
%in
the
last
6 m
onth
s an
d 52
%
sinc
e Se
ptem
ber 2
018
•In
clud
es te
rmin
als
subj
ect t
o re
ntal
co
ntra
cts
•R
enta
ls m
ay b
e re
new
ed u
pon
expi
ry o
r rep
lace
d w
ith o
wne
d te
rmin
als
•N
ew te
rmin
als,
onc
e im
porte
d, a
re
prep
ared
for c
lient
and
read
ied
for
depl
oym
ent
•R
epre
sent
s pr
ospe
ctiv
e re
curr
ing
reve
nue
once
act
ivat
ed
•In
clud
es ”r
otat
ing
stoc
k” fo
r bac
kup
and
repl
acem
ent
3248
76
103
128
156
Apr
il'1
7S
ep '17
Mar '18
Sep '18
Mar '19
Sep '19
1622
3840
4142
Apr
il'1
7S
ep '17
Mar '18
Sep '18
Mar '19
Sep '19
TOTA
L TE
RM
INA
L ES
TATE
•N
umbe
r of t
erm
inal
s in
clie
nts’
han
ds
grew
by
10%
in th
e la
st 6
mon
ths
and
31%
sin
ce S
epte
mbe
r 201
8 (3
8% w
ithou
t the
del
iver
y de
lay)
•In
clud
es te
rmin
als
subj
ect t
o re
ntal
ag
reem
ents
4960
92
118
140
164
Apr
il'1
7S
ep '17
Mar '18
Sep '18
Mar '19
Sep '19
154
146
117
33
At e
nd o
f per
iod
Del
iver
ed in
Oct
ober
25
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
25
EVO
LUTI
ON
IN P
AYM
ENT
SER
VIC
ES O
FFER
ING
BAN
K R
ELAT
ION
SHIP
S
NO
W^
THEN
*
* May
201
7 (fi
rst a
cqui
sitio
n m
onth
) // ^
Oct
ober
201
9 (la
test
trad
ing
mon
th)
TAR
GET
MAR
KET
OPP
OR
TUN
ITIE
S
Smal
l ind
epen
dent
m
erch
ants
Smal
l ind
epen
dent
m
erch
ants
Larg
er m
erch
ants
NO
W^
THEN
*
PRO
DU
CT
OFF
ERIN
G
Mul
tiple
pro
duct
s an
d se
rvic
es
Acqu
iring
is n
ow
only
anc
illiar
y
Trad
ition
al
Mer
chan
t Ac
quiri
ng o
nly
NO
W^
THEN
*
Con
tinui
ng b
ut d
elay
ed p
rogr
ess
in re
adyi
ng D
ashp
ayfo
r mas
s de
ploy
men
t
Oth
ers
in n
egot
iatio
n
Ente
rpris
e cu
stom
ers
for B
2B
and
B2B
2C
depl
oym
ent
26
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
26
DA
SHPA
Y O
PER
ATIO
NA
LU
PDAT
E
MAY
‘17
NO
V‘1
8
R50
0m
R1.
4bn
R2.
2bn
OC
T ‘1
9^
480%
Tran
sact
ion
(Tx)
Dat
a
180%
57%
26* M
AY 2
017
(FIR
ST A
CQ
UIS
ITIO
N M
ON
TH) /
/ ^ O
CTO
BER
201
9 (L
ATES
T TR
ADIN
GM
ON
TH) /
/ AN
NU
ALIS
ED
APR
‘19
R2.
9bn
31%
MAY
‘17
NO
V‘1
8
1.6m
4.1m
5.7m
OC
T ‘1
9^
340%
156%
39%
APR
‘19
7.1m
25%
GR
OSS
Tx
VALU
EG
RO
SS T
x VO
LUM
E
27
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
27
Site
s
Term
inal
s
Pot
entia
l mem
bers
> 20
0
> 36
0
> 50
0 00
0
SASO
L –
AA
LOYA
LTY
THE
SOLU
TIO
N E
NAB
LES
E
nrol
men
t
C
ard
linki
ng
E
arni
ng
R
edem
ptio
n
R
econ
Das
hpay
deve
lope
d an
d op
erat
es
the
AA
Fuel
Loy
alty
sol
utio
n at
Sa
sol s
tatio
ns n
atio
nwid
e
The
plat
form
pro
vide
s an
im
med
iate
plu
g-an
d-pl
ay s
olut
ion
28
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
28
SOFT
WA
RE
& S
ERVI
CES
SEG
MEN
T –
SYN
THES
IS
BLU
E-C
HIP
CLI
ENTS
Absa
, Afg
ri, C
apite
c, In
vest
ec,
Ned
bank
, Sta
ndar
d Ba
nk, W
oolw
orth
s Fi
nanc
ial S
ervi
ces
and
othe
rs
Lead
ing
prov
ider
of t
echn
olog
y pr
oduc
ts a
nd s
olut
ions
with
in th
e fin
anci
al s
ervi
ces
indu
stry
CLI
ENT
CEN
TRIC
Del
iver
ing
the
high
est b
usin
ess
valu
e w
ith a
stro
ng s
ervi
ce e
thic
THO
UG
HT
LEAD
ERS
Acqu
iring
and
reta
inin
g th
e be
st
softw
are
deve
lopm
ent s
kills
FOC
USE
DFo
cus
in th
e fin
anci
al
serv
ices
sec
tor
EXPE
RIE
NC
EDH
ighl
y in
nova
tive
team
with
a tr
ack
reco
rd o
f onl
y su
cces
sful
del
iver
y
STR
ATEG
IC R
ELAT
ION
SHIP
SKe
y pa
rtner
ship
s w
ith A
maz
on’s
AW
S, th
e to
p-ra
ted
prov
ider
of
clou
d se
rvic
es g
loba
lly
29
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
29
OPE
RAT
ING
UN
ITS
WIT
HIN
SYN
THES
IS
Clo
ud tr
ansf
orm
atio
n to
ass
ist t
he
Ente
rpris
e in
bec
omin
g cl
oud-
read
y,
exec
ute
mas
s m
igra
tions
and
har
ness
the
bene
fits
of p
ublic
clo
ud p
latfo
rm
Firs
t AW
S A
dvan
ced
Con
sulti
ng
part
ner i
n M
EA
CLO
UD
Del
iver
ing
exce
ptio
nal e
nd-u
ser c
lient
expe
rienc
e, w
eb a
nd m
obile
touc
hpoi
nts
for f
inan
cial
ser
vice
s in
stitu
tions
whi
le
mai
ntai
ning
info
rmat
ion
secu
rity
and
trans
actio
nal i
nteg
rity
DIG
ITAL
C
HAN
NEL
S
Inte
grat
ion
to e
nabl
e re
gula
tory
repo
rting
sol
utio
ns fo
r SAR
S (ta
x) a
nd
SAR
B (b
alan
ce o
f pay
men
ts),
paym
ent
proc
essi
ng a
nd e
xcha
nge
conn
ectiv
ity
PLAT
FOR
M IN
TEG
RAT
ION
PR
OD
UC
TS
SYN
THES
IS L
ABS
Arti
ficia
l int
ellig
ence
, blo
ckch
ain,
mac
hine
lear
ning
SYN
THES
IS A
CA
DEM
YTe
chni
cal a
nd c
loud
trai
ning
tailo
red
to o
rgan
isat
iona
l obj
ectiv
es
30
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
30
PRIO
R C
ASE
STU
DIE
S
Use
of A
I and
mac
hine
lear
ning
in
bran
d m
anag
emen
t24
/7/3
65 c
loud
man
aged
in
fras
truc
ture
ser
vice
s gl
obal
ly
Reg
Tech
Fina
ncia
l ser
vice
s in
ag
ricul
tura
l sec
tor
Out
com
es-d
riven
e-
Lear
ning
LM
S-ba
sed
trai
ning
to c
lient
or
gani
satio
ns
SYN
THES
IS A
CA
DEM
Y
31
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
31
CO
NTE
XTU
ALL
Y R
ELEV
AN
T &
TIM
ELY
CU
STO
MER
EN
GA
GEM
ENT
Syn
thes
is w
orke
d w
ith S
tand
ard
Ban
k IT
to b
uild
a h
yper
scal
e ca
pabi
lity
thro
ugh
AWS
that
enab
les
the
dem
ands
of t
he b
usin
ess
and
the
cust
omer
bas
e to
resp
ond
to a
var
iety
of e
vent
s in
real
-tim
e, e
ngag
e cu
stom
ers
cont
extu
ally
on
a va
riety
of c
hann
els,
and
ap
ply
the
enga
gem
ent f
eedb
ack
to a
mac
hine
lear
ning
eng
ine
for
cont
inua
l im
prov
emen
t
A hy
per-
scal
able
so
lutio
n in
pilo
t
THE
PRO
BLE
M P
RES
ENTE
D
THE
SOLU
TIO
NTH
E R
ESU
LT
Con
text
ually
rele
vant
co
nver
satio
nsAt
the
right
tim
eTh
roug
h th
e pr
efer
red
chan
nel
32
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
32
SASF
IN IN
TEG
RAT
ES S
YNTH
ESIS
FIN
SUR
V R
EPO
RTI
NG
INTO
ITS
NEW
CAL
YPSO
SU
ITE
Upg
rade
from
dis
para
te le
gacy
trad
ing
syst
ems
to a
new
Cal
ypso
sui
te w
hile
en
surin
g co
mpl
ianc
e w
ith S
AR
B re
porti
ng
THE
PRO
BLE
M P
RES
ENTE
D
Syn
thes
is w
orke
d w
ith S
asfin
and
the
Cal
ypso
pro
vide
r to
deliv
er a
fully
aut
omat
ed
Fins
urv
repo
rting
sol
utio
n
The
Synt
hesi
s tX
stre
amFi
nsur
vso
lutio
n In
tegr
ated
in
to S
asfin
’sne
w C
alyp
so p
latfo
rm, i
t ena
bles
au
tom
ated
com
plia
nce
supp
ort,
sign
ifica
ntly
low
erin
g re
port
ing
effo
rt a
nd in
crea
sing
acc
urac
y an
d ef
ficie
ncy
THE
SOLU
TIO
NTH
E R
ESU
LT
33
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
33
CLO
UD
PO
WER
S LA
RG
E R
ETA
ILER
’S L
OYA
LTY
REW
AR
DS
The
plat
form
wou
ld
need
to s
cale
relia
bly,
be
cos
t effe
ctiv
e an
d ac
com
mod
ate
mill
ions
of
real
-tim
e tra
nsac
tions
in-s
tore
, as
wel
l as
mee
t new
on
line
dem
and
for i
ts
valu
e-ad
d se
rvic
es
Syn
thes
is a
pplie
d its
cl
oud
and
digi
tal
arch
itect
ure
expe
rtise
to
hel
p th
e re
taile
r cr
eate
a ro
bust
dig
ital
plat
form
that
will
mee
t th
e re
taile
r’s n
eeds
–no
w a
nd in
futu
re
Ove
r one
mill
ion
cust
omer
s re
gist
ered
vi
a m
ultip
le c
hann
els
for r
ewar
ds w
ithin
two
wee
ks
The
in-s
tore
ser
vice
s su
ch a
s bi
ll pa
ymen
t, ai
rtim
e pu
rcha
ses
and
mon
ey tr
ansf
ers
can
scal
e re
liabl
y to
ser
ve
mill
ions
of c
usto
mer
s on
line
if re
quire
d
THE
CH
ALLE
NG
ETH
E SO
LUTI
ON
THE
RES
ULT
SA R
etai
l gia
nt
need
ed to
laun
ch it
s ne
w d
igita
l rew
ards
pr
ogra
mm
ein
the
clou
d
THE
PRO
BLE
M
PRES
ENTE
D
34
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
34
FIN
AN
CIA
LPE
RFO
RM
AN
CE
35
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
35
FIN
AN
CIA
L PE
RFO
RM
AN
CE
Paym
ents
& P
aym
ent I
nfra
stru
ctur
e D
ivis
ion
44.2
140.7
196.1
202.9
415.1
469.9
253.6
186.3
9.4
24.9
42.1
77.5
151.7
135.5
70.0
50.0
050100
150
200
250
300
350
400
450
500
FY '1
4FY
'15
FY '1
6FY
'17
FY '1
8FY
'19
30 S
ep '1
830
Sep
'19
Rev
enue
EBI
TDA
Res
ults
in p
erio
d im
pact
ed b
y de
lay
in
term
inal
del
iver
ies
R m
illio
n
Abse
nt d
elay
, rev
enue
w
ould
hav
e ex
ceed
ed
prio
r yea
r
Rev
enue
and
inco
me
reco
gnis
ed in
Oct
ober
36
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
36
FIN
AN
CIA
L PE
RFO
RM
AN
CE
Softw
are
& S
ervi
ces
Div
isio
n
41.6
46.1
51.9
77.6
93.1
137.8
61.8
95.3
12.6
15.9
19.8
29.9
33.9
44.0
18.4
27.2
020406080100
120
140
160
FY '1
4FY
'15
FY '1
6FY
'17
FY '1
8FY
'19
30 S
ep '1
830
Sep
'19
Gro
ss R
even
ueE
BITD
A
Exce
ptio
nal p
erfo
rman
ce
in th
e pe
riod
R m
illio
n
Effe
ctiv
ely,
reve
nue
has
doub
led
in 1
8 m
onth
s
EBIT
DA
is a
fter
expe
nsin
g ad
ditio
nal
ram
p-up
cos
ts re
late
d to
AW
S C
loud
Mig
ratio
n pr
ojec
ts, t
he b
enef
its o
f w
hich
will
acc
rue
in
subs
eque
nt p
erio
ds
The
bene
fit o
f las
t yea
r’s
expe
nditu
res
is v
isib
le in
th
is y
ear’s
gro
wth
37
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
37
CO
ND
ENSE
D G
RO
UP
STAT
EMEN
T O
F C
OM
PREH
ENSI
VE IN
CO
ME
(R m
illio
n)30
Sep
201
930
Sep
201
8%
incr
ease
/(dec
reas
e)
Rev
enue
281.
631
5.4
(10.
7%)
EBIT
DA
67.9
81.4
(16.
8%)
Trad
ing
prof
it68
.282
.8(1
7.6%
)
Net
fina
nce
inco
me
20.2
17.4
16.3
%
Prof
it be
fore
taxa
tion
80.2
88.4
(9.3
%)
Prof
it af
ter t
ax57
.963
.3(8
.6%
)
Nor
mal
ised
pro
fit a
fter t
ax55
.968
.2(1
7.9%
)
Bas
ic e
arni
ngs
per s
hare
(cen
ts)
3.94
4.23
(6.8
%)
Hea
dlin
e ea
rnin
gs p
er s
hare
(cen
ts)
3.43
4.23
(19.
0%)
Nor
mal
ised
hea
dlin
e ea
rnin
gs p
er s
hare
(c
ents
)3.
814.
55(1
6.3%
)
Num
ber o
f sha
res
in is
sue
(mill
ions
)1
310.
01
555.
0(1
5.8%
)
Wei
ghte
d av
erag
e nu
mbe
r of s
hare
s in
issu
e (m
illio
ns)
1 46
8.5
1 49
7.7
(1.9
%)
Num
ber o
f sha
res
in is
sue,
net
of t
reas
ury
shar
es (m
illio
ns)
1 24
4.4
1 49
4.7
(16.
7%)
Purc
hase
d 1.
92m
tr
easu
ry s
hare
s
Tota
l num
ber o
f tre
asur
y sh
ares
is 6
5.6m
Afte
r re
vers
al o
f am
ortis
atio
n of
inta
ngib
les
aris
ing
from
acq
uisi
tions
an
d th
e ad
d ba
ck o
f the
ga
in o
n sa
le o
f inv
estm
ent
in a
ssoc
iate
net
of c
apita
l ga
ins
tax
Abse
nt th
e te
rmin
al
supp
lier d
elay
, rev
enue
w
ould
hav
e ex
ceed
ed
R34
8m, u
p 10
%
Hig
her c
ash
bala
nces
, im
prov
ed y
ield
, tr
ansa
ctio
n on
ly a
t per
iod
end
Smal
l im
pact
on
HEP
S th
is p
erio
d
38
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
38
DIV
ISIO
NA
L R
EVEN
UE
CO
MPO
SITI
ON
(R m
illio
n)30
Sep
‘19
30 S
ep ‘1
8%
incr
ease
/(dec
reas
e)
Paym
ents
& P
aym
ent I
nfra
stru
ctur
e di
visi
on
Ren
tal i
ncom
e15
.844
.8(6
4.7%
)M
aint
enan
ce a
nd s
uppo
rt s
ervi
ce fe
es57
.028
.699
.3%
Sale
of t
erm
inal
s99
.016
5.7
(40.
3%)
Tran
sact
ion
fees
8.3
7.4
12.2
%O
ther
reve
nue
6.2
7.1
(12.
7%)
Tota
l18
6.3
253.
6(2
6.5%
)
Softw
are
& S
ervi
ces
divi
sion
Serv
ices
and
con
sulta
ncy
fees
68.2
45.9
48.6
%Li
cenc
e an
d su
bscr
iptio
n fe
es25
.714
.083
.6%
Har
dwar
e1.
41.
9(2
6.3%
)To
tal
95.3
61.8
54.0
%To
tal r
even
ue28
1.6
315.
4(1
0.7%
)
Geo
grap
hic
regi
onSo
uth
Afric
a26
8.4
307.
4(1
2.7%
)O
ther
13.2
8.0
65.0
%To
tal r
even
ue28
1.6
315.
4(1
0.7%
)
Rec
urrin
g in
com
e re
pres
ents
app
roxi
mat
ely
52%
of t
otal
reve
nue
in 2
019
(201
8: 4
8%)
Abse
nt te
rmin
al
supp
lier d
elay
, rev
enue
w
ould
hav
e ex
ceed
ed
prio
r per
iod
Ren
tal c
ontr
acts
ex
pirin
g an
d sh
iftin
g fr
om re
ntal
to s
old
term
inal
s
Incr
ease
d de
man
d fo
r di
gita
l and
clo
ud
serv
ices
New
par
tner
ship
s yi
elde
d gr
owth
in
recu
rrin
g re
venu
e
39
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
39
CO
ND
ENSE
D G
RO
UP
STAT
EMEN
T O
F FI
NA
NC
IAL
POSI
TIO
N
(R m
illio
n)30
Sep
201
930
Sep
201
831
Mar
201
9
ASSE
TS
Goo
dwill
728.
6 72
8.6
728.
6
Inta
ngib
le a
sset
s65
.6
66.7
62
.3
Oth
er n
on-c
urre
nt a
sset
s60
.1
71.0
72
.2
Non
-cur
rent
ass
ets
854.
3 86
6.3
863.
1
Cas
h an
d ca
sh e
quiv
alen
ts41
5.9
551.
5 61
1.2
Oth
er c
urre
nt a
sset
s18
7.7
124.
0 70
.3
Tota
l ass
ets
1 45
7.9
1 54
1.8
1 54
4.6
EQU
ITY
AND
LIA
BIL
ITIE
S
Equi
ty1
277.
11
421.
41
447.
1
Non
-cur
rent
liab
ilitie
s 55
.433
.434
.6
Cur
rent
liab
ilitie
s12
5.4
87.0
62.9
Tota
l equ
ity a
nd li
abili
ties
1 45
7.9
1 54
1.8
1 54
4.6
NAV
per
sha
re (c
ents
)97
.595
.193
.1
Cas
h av
aila
ble
per s
hare
(cen
ts)
31.7
36.9
39.3
As a
t end
of O
ctob
er
2019
, cas
h ba
lanc
e is
R
482m
Incl
udes
term
inal
s in
tr
ansi
t and
deb
tors
for
tran
sact
ions
in
Sept
embe
r
As a
t end
of O
ctob
er
2019
, 36.
8 ce
nts
per
shar
e
Shar
e re
purc
hase
of 2
45
mill
ion
shar
es,
amou
ntin
g to
R19
2.7m
40
C
apit
al A
pp
reci
atio
n L
imit
ed U
nau
dit
ed In
teri
m C
ond
ense
d C
onso
lidat
ed F
inan
cial
Res
ult
s fo
r th
e si
x m
onth
s 30
Sep
tem
ber
20
19
40
CA
SH F
LOW
(KEY
FEA
TUR
ES)
(R m
illio
n)30
Sep
‘19
30 S
ep ‘1
830
Mar
‘19
Cha
nges
in w
orki
ng c
apita
l(4
5.5)
9.
8 51
.7
Cas
h flo
w fr
om o
pera
tions
20.1
92
.4
212.
7
Acqu
isiti
on o
f pro
pert
y, p
lant
and
equ
ipm
ent
(9.8
) (8
.3)
(16.
5)
Purc
hase
of t
reas
ury
shar
es
(1.4
) (4
.5)
(7.1
)
Rep
aym
ent o
f loa
ns-
(4.4
) (3
.0)
Div
iden
ds p
aid
(29.
8)
(30.
0)
(63.
6)
Cas
h &
cas
h eq
uiva
lent
s at
per
iod
end
415.
955
1.5
611.
2
Ref
lect
s te
rmin
als
in
tran
sit a
nd d
ebto
rs fo
r tr
ansa
ctio
ns in
Se
ptem
ber
Posi
tive
wor
king
cap
ital
impr
ovem
ent i
n O
ctob
er, a
mou
ntin
g to
R
86.2
m
Post
repu
rcha
se o
f sh
ares
and
rela
ted
tran
sact
ions
41
Cap
ital
Ap
pre
ciat
ion
Lim
ited
Un
aud
ited
Inte
rim
Con
den
sed
Con
solid
ated
Fin
anci
al R
esu
lts
for
the
six
mon
ths
30 S
epte
mb
er 2
019
41
PRO
SPEC
TS
42
C
apit
al A
pp
reci
atio
n L
imit
ed U
nau
dit
ed In
teri
m C
ond
ense
d C
onso
lidat
ed F
inan
cial
Res
ult
s fo
r th
e si
x m
onth
s 30
Sep
tem
ber
20
19
42
A
ccel
erat
ed g
row
th in
PO
S d
evic
e es
tate
as
pene
tratio
n in
crea
ses
in b
anki
ng a
s w
ell a
s S
MM
E
sect
or
In
trodu
ctio
n of
new
pla
tform
s w
ill ge
nera
te n
ew
grow
th
N
ew p
rodu
ct p
ipel
ine
PAYM
ENTS
& P
AYM
ENT
INFR
ASTR
UC
TUR
ESO
FTW
ARE
& S
ERVI
CES
S
trong
and
gro
win
g ad
optio
n of
clo
ud-b
ased
so
lutio
ns
R
egul
ator
y co
mpl
ianc
e re
quire
men
ts
Fu
rther
inte
rnat
iona
l exp
ansi
on, e
spec
ially
Afri
can
hub
S
igni
fican
t opp
ortu
nity
in n
ew te
chno
logi
es
A
broa
d ra
nge
of o
rgan
ic a
s w
ell a
s ac
quis
itive
gro
wth
opp
ortu
nitie
s av
aila
ble
to C
AP
PR
EC
A
cqui
sitio
n ac
tivity
will
depe
nd o
n st
rate
gic
fit a
s w
ell a
s va
luat
ions
P
oliti
cal e
nviro
nmen
t and
eco
nom
ic c
limat
e ar
e im
pact
ing
our c
lient
s an
d re
mai
n pr
esen
t in
our p
lann
ing
GROWTH OPPORTUNITIES
GEN
ERA
L PR
OSP
ECTS
Cap
ital A
ppre
ciat
ion
is w
ell c
apita
lised
, with
the
man
agem
ent s
kills
and
tech
nolo
gy to
driv
e it’
s gr
owth
str
ateg
y
43
C
apit
al A
pp
reci
atio
n L
imit
ed U
nau
dit
ed In
teri
m C
ond
ense
d C
onso
lidat
ed F
inan
cial
Res
ult
s fo
r th
e si
x m
onth
s 30
Sep
tem
ber
20
19
43
OU
R IN
VEST
MEN
T C
ASE
–ST
RO
NG
FO
UN
DAT
ION
ON
WH
ICH
TO
GR
OW
W
ell-p
ositi
oned
in a
n in
dust
ry w
ith h
ealth
y or
gani
c gr
owth
pro
spec
ts
A
trus
ted
part
ner t
o a
stro
ng n
etw
ork
of la
rge
finan
cial
inst
itutio
ns
C
lient
s ar
e w
ell c
apita
lised
and
est
ablis
hed
C
lient
s al
read
y ha
ve a
pre
senc
e in
Afr
ica
–pr
ovid
ing
the
pote
ntia
l abi
lity
for C
AP
PR
EC
to e
xpan
d re
gion
ally
with
them
W
ell-e
stab
lishe
d Fi
nTec
h su
bsid
iarie
s w
ith s
trong
trac
k re
cord
s
Inno
vatio
nQ
ualit
y ex
ecut
ion
Fina
ncia
l per
form
ance
S
ubsi
diar
ies
have
str
ong
orga
nic
grow
th p
rosp
ects
and
acq
uisi
tion
oppo
rtun
ities
St
rong
Gro
up b
alan
ce s
heet
with
ade
quat
e he
adro
om fo
r org
anic
and
acq
uisi
tive
grow
th
S
ubsi
diar
ies
are
high
ly c
ash
gene
rativ
e
O
ur p
rodu
cts
and
serv
ices
are
targ
eted
at m
issi
on-c
ritic
al a
pplic
atio
ns
44
C
apit
al A
pp
reci
atio
n L
imit
ed U
nau
dit
ed In
teri
m C
ond
ense
d C
onso
lidat
ed F
inan
cial
Res
ult
s fo
r th
e si
x m
onth
s 30
Sep
tem
ber
20
19
44
TH
AN
K
YO
U
45
C
apit
al A
pp
reci
atio
n L
imit
ed U
nau
dit
ed In
teri
m C
ond
ense
d C
onso
lidat
ed F
inan
cial
Res
ult
s fo
r th
e si
x m
onth
s 30
Sep
tem
ber
20
19
45
GLO
SSA
RY
AED
OA
uthe
ntic
ated
ear
ly d
ebit
orde
r
AIA
rtific
ial i
ntel
ligen
ce
ATM
Aut
omat
ed te
ller m
achi
ne
AWS
Am
azon
Web
Ser
vice
s
B2B
B
usin
ess
to b
usin
ess
B2B
2CB
usin
ess
to b
usin
ess
to c
onsu
mer
B-B
BEE
Bro
ad-B
ased
Bla
ck E
cono
mic
Em
pow
erm
ent
Bn
Bill
ion
CAG
RC
ompo
und
annu
al g
row
th ra
te
CAP
PREC
C
apita
l App
reci
atio
n Li
mite
dC
ash
EPS
Cas
h flo
w fr
om o
pera
tions
, les
s ta
xatio
n pa
id, d
ivid
ed b
y w
eigh
ted
aver
age
num
ber o
f sha
res
in is
sue
CLC
Cod
e lin
e cl
earin
g
CR
MC
usto
mer
rela
tions
hip
man
agem
ent
EBIT
Ear
ning
s be
fore
inte
rest
and
tax
EBIT
DA
Ear
ning
s be
fore
inte
rest
, tax
, dep
reci
atio
n an
d am
ortis
atio
n
EFT
Ele
ctro
nic
fund
tran
sfer
EMV
Eur
opay
, Mas
terc
ard,
Vis
a
EPS
Ear
ning
s pe
r sha
re
FinT
ech
Fina
ncia
l tec
hnol
ogy
FYFi
scal
yea
r
GTV
Gro
ss tr
ansa
ctio
n va
lue
HEP
S H
eadl
ine
earn
ings
per
sha
re
IaaS
Infra
stru
ctur
e as
a S
ervi
ce
ISO
Inde
pend
ent s
ale
orga
nisa
tion
IT
Info
rmat
ion
tech
nolo
gy
MM
illio
n
NA
Not
ava
ilabl
e
NAE
DO
Non
-aut
hent
icat
ed e
arly
deb
it or
der
NAV
N
et a
sset
val
ue
NFC
Nea
r fie
ld c
omm
unic
atio
n
NH
EPS
Nor
mal
ised
hea
dlin
e ea
rnin
gs p
er s
hare
NM
Not
mea
ning
ful
PaaS
Pla
tform
as
a S
ervi
ce
POS
Poi
nt o
f sal
e
R
Ran
d
R&
D
Res
earc
h an
d de
velo
pmen
t
REI
T R
eal E
stat
e In
vest
men
t Tru
st
RTC
Req
uest
to c
redi
t
SAS
outh
Afri
ca
SaaS
Sof
twar
e as
a S
ervi
ce
SAR
BS
outh
Afri
can
Res
erve
Ban
k
SAR
SS
outh
Afri
can
Rev
enue
Ser
vice
s
SME
Sm
all a
nd m
ediu
m e
nter
pris
e
TxTr
ansa
ctio
n
US$
Uni
ted
Sta
tes
Dol
lar
ZAR
Sou
th A
frica
n R
ands
NOTES
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 47for the six months ended 30 September 2019
Unaudited Interim Condensed Consolidated Financial Resultsfor the six months ended 30 September 2019
and Cash Dividend Declaration
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 49for the six months ended 30 September 2019
Capprec is a financial technology company. The Company operates in two business segments – Payments & Payment Infrastructure (“Payments”) and Software & Services (“Services”). African Resonance and Dashpay comprise the Payments segment and Synthesis comprises the Services segment. African Resonance is a leading provider of payment infrastructure and related technology solutions to established financial institutions. Dashpay operates an innovative transacting platform and provides transaction processing services, solutions and products focused on business-to-business commercial and payment activity to emerging payment service providers, select industry bodies and associations,
healthcare practitioners, the hospitality industry and the retail sector.
Synthesis is a highly specialised software and systems developer that delivers technology solutions and services to the financial services, retail and telecommunications sectors in South Africa and other countries on the African continent. Synthesis is the foremost provider of Amazon Web Services (AWS) cloud services to the financial services sector.
Further detail on the nature of these specialised business units is available on the Company’s website, at www.capitalappreciation.co.za.
ABOUT CAPPREC
50 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
SALIENT FEATURES
FINANCIAL
RevenueR281.6 million
-10.7%
EBITDAR67.9 million
-16.8%
Trading profit R68.2 million
-17.6%
Headline earnings R50.3 million
-20.5%
EPS of 3.94 cents-6.8%
HEPS of 3.43 cents-19.0%
Normalised HEPS3.81 cents
-16.3%
R416 millioncash availablefor reinvestment
Interim dividend of 2.25 cents per ordinary share(September 2018: 2.25 cents per ordinary share)
Period’s results negatively impacted due to late arrivalof budgeted terminal imports,
shifting expected revenues into 2nd period
Significant revenues booked and cash generated in October 2019
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 51for the six months ended 30 September 2019
OPERATIONAL
African Resonanceacquires ownership of all core Intellectual Property
Strategic repurchase and cancellation
of 245 million shares successfully completed
African Resonance fleet of154 000 payment terminalsin the hands of clients, increase
of 10% since March 2019 (31% since September 2018)
African Resonance installedterminals grew by 23%
to 117 000 since March 2019 (52% since September 2018)
Synthesis continues itstrack record of 31%
compound earnings growth
Synthesis technology teamstake on a more pivotal role
within the Capprec group
Dashpay concluded Distribution and Use Agreement for a new
second source of quality terminalswith second largest
manufacturer of terminals globally
Dashpay roll outprogressing with
Annualised Gross Transaction Value (GTV) exceeding R2.9 billion,
up 31% since March 2019 and more than 100% year-on-year
Group investment to support growth continues
52 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 53for the six months ended 30 September 2019
COMMENTARY
INTRODUCTIONGiven the now well publicised state of the country’s economic challenges and the broad adverse impact it has had on business, business confidence and South Africa’s communities, the Board is satisfied with the Company’s interim performance.
The Company’s well-established divisional reputations and track record of innovation, quality and efficient service delivery have assisted Capprec to attract and retain an impressive client base in the financial sector. This includes all major banking institutions in South Africa, many niche banks, large financial services institutions as well as other financial services companies. In recent times, the Company has also successfully diversified into the retail and telecommunications sector and continues to explore supplementary sectors where its products and services assist large corporate clients to improve service to their customers. Capprec continues to invest in additional capacity, including the development of new innovative product offerings in anticipation of growth in commercial activity in both its Payments and Services operations.
The current financial results do not fully reflect the underlying financial performance of the Company, mainly due to a late delivery of a sizable number of imported terminals from our supplier. These delayed terminals could not be delivered and transferred to customers prior to the cut-off period of 30 September 2019. Significant revenue, earnings and cash generation, therefore, took place in October 2019,
related, inter alia, to the aforesaid inventory, including strong cash inflows from receivables. This is highlighted in more detail later in this report. But for the delivery delay, revenue in the Payments sector would have exceeded that generated in the same period last year.
OPERATING ENVIRONMENTHaving regard to the state of the economy, our clients have adopted a cautious stance towards infrastructure expansion and capital expenditure in general. Despite this restraint, however, Capprec enterprises have made positive operational strides.
Capprec operates in an environment of rapidly evolving technological change, and increasing customer expectations, with growing regulatory compliance requirements. This places a substantial burden on industry participants, with more consumers embracing everyday use of technology. There is also the added pressure on clients to reduce costs, and this, notwithstanding the tough economic conditions, creates growing demand for the Company’s more cost effective, high tech services and applications. In order to satisfy these technology-led processes and systems, elevated levels of expertise and innovation are required. Capprec is well positioned to deliver products and value propositions to support our clients’ transformative journeys to become more digitally enabled. The prospect therefore exists to drive above-trend growth in the foreseeable future.
54 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
SHARE REPURCHASE AND SMALL RELATED PARTY TRANSACTIONDuring the period, Capprec concluded and successfully executed an agreement with Dr Hanoch Neishlos, the principal vendor of African Resonance, and associates to acquire the intellectual property, technology and development platforms that were previously licensed by African Resonance from Uplink (an entity controlled by Dr Neishlos). The Company also employed those members of the Uplink team focused on Capprec customer technology and their development needs. This was an important milestone for Capprec as the Company now has absolute ownership over most of the core intellectual property used in the businesses.
The agreement also included the share repurchase and cancellation by Capital Appreciation of 245 million shares from Dr Neishlos and his affiliated parties for an aggregate amount of R192.7 million and the disposal of Capprec’s 17.45% interest and claims in Resonance Australia for an aggregate amount of R40 million. All related party loans, receivables and obligations were settled in full between the parties and both Dr Neishlos and Eitan Neishlos resigned as directors from all group companies. The successful implementation of the agreement has and will have various financial impacts which are detailed in note 3 of the condensed financials.
The share repurchase transaction became effective on 27 August 2019 (the date of the shareholder approval) and Capprec now has 1 310 million shares in issue. Final settlement of the transaction only occurred on 17 September 2019.
The benefits of the transaction are already evident in the enhanced cooperation between the technical teams of all Capprec business units. Bringing the technology skills and resources of Synthesis together with African Resonance and Dashpay, not only maximises the contributions from each division, but stimulates further innovation, eliciting better coordination and operational efficiency.
SUMMARISED FINANCIAL RESULTSCapprec generated gross revenues for the period of R281.6 million (September 2018: R315.4 million), a decrease of 10.7%. EBITDA of R67.9 million (September 2018: R81.4 million), reflects a decrease of 16.8%. Profit before taxation decreased by 9.3% to R80.2 million (September 2018: R88.4 million), with profit after taxation decreasing by 8.6% to R57.9 million (September 2018: R63.3 million). Headline earnings for the period decreased by 20.5% to R50.3 million (September 2018: R63.3 million) translating into basic EPS for the period of 3.94 cents per share (September 2018: 4.23 cents), down 6.8% and HEPS of 3.43 cents per share(September 2018: 4.23 cents), a decrease of 19.0%. Capprec realised a gain on the disposal of its interest in Resonance Australia of R8.7 million which
COMMENTARY CONTINUED
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 55for the six months ended 30 September 2019
is reflected in basic EPS but has been added back in the calculation of HEPS.
Capprec also reports Normalised Headline Earnings Per Share (“NHEPS”), which together with EBITDA are the primary measures used by management to assess Capprec’s underlying financial performance. NHEPS comprises HEPS adjusted for the after-tax amortisation arising from the value attributed to intangible assets arising on the asset acquisitions in May 2017. For the period under review, the Company’s NHEPS totalled 3.81 cents (September 2018: 4.55 cents), a decrease of 16.2%.
The significant step up in inventory was due to the delayed arrival of imported terminals referred to earlier herein. The terminals were accounted for as stock in transit at 30 September and were delivered to clients in October 2019. The unexpected delay had a measurable effect on revenue and profits for the reporting period, but is likely to contribute to an improved financial result in the Payments division for the second half of the year.
While the Company continues to incur expenditure to increase capacity and support anticipated growth, Capprec has managed to stabilise the growth of such operating costs. Expansionary efforts, however, designed to generate further cost-effective income producing benefits through enhanced skills and infrastructure will continue.
The Company had cash resources at the end of the period of R415.9 million, post the cash outflow effects of the share repurchase and small related party transaction. Capprec continues to be highly cash
generative, as evidenced by the generation of an additional R66 million of net cash inflow in October 2019. Cash resources at end of October 2019 amounted to R482 million.
Based on the closing price of a Capprec share on 30 September 2019, of 77 cents, 32 cents of that share price is represented by cash. The Company’s cash resources will be applied, in the first instance, to fund anticipated organic growth and thereafter to pursue or supplement the cost of new, but complementary acquisition opportunities. The Company will continue to opportunistically repurchase shares in the market.
Capprec has adopted IFRS 16 in the period, which has had a small, non-material impact on net profit after tax.
The Company purchased 1 921 500 Capprec treasury shares, costing R1 437 663 in the market during the period. As of 30 September 2019, Capprec has a total of 65 563 500 treasury shares at an average price of 76 cents per share.
DIVISIONAL REVIEWPayments Division (African Resonance and Dashpay)African Resonance is a solid, well-run business that continues to produce sustainable profits and cash flow. The company has attracted a strong client base comprising all the major banks in South Africa, as well as a range of other financial institutions both in South Africa and elsewhere in Africa. Its products have been
56 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
well-received, allowing it to grow market share and build a sizable terminal base with a 5-year tenure on average. African Resonance has a longstanding relationship and supplier agreement with leading payment terminal manufacturer, French-based Ingenico and has been awarded the status of Ingenico Centre of Excellence for its development of innovative products.
The business has continued to consistently grow its terminal base. During the past six months, more than 18 000 additional terminals were sold, bringing the total number of terminals in the hands of customers to more than 154 000 terminals (c.146 000 sold and c.8 000 rented). Of these terminals 117 000 have already been deployed and are earning annuity-based maintenance and support service revenues. Maintenance and support fees, doubled year-on-year, due to the increased deployment over the period. Rental income has continued to decline in line with budget as current rental contracts reach the end of their rental term and due to customers shifting from rental to purchased terminals. Terminal sales for the period reflected a decline, due in large part to the delay in delivery of September orders into October.
Dashpay continued to firmly establish its business model despite tough economic conditions, generating Annualised Gross Transaction Value (GTV) exceeding R2.9 billion, up 31% since year-end and more than 100% year-on-year. The enterprise has continued to grow its transacting client base. Dashpay also signed an ISO agreement with Absa, in addition to its existing agreements with Nedbank
and Mercantile Bank. Dashpay continues to pursue development of new opportunities and continues to expend time, effort and capital on new technologies for deployment within the company.
Dashpay has signed a new distributor agreement with the world’s second largest terminal supplier and the largest in China, for the use and distribution of payment terminals for the SADC region. The agreement should further broaden Dashpay’s target market as these terminals will predominantly service SMMEs and enterprises which do not currently utilise the payment terminal environment. Dashpay will primarily focus on introducing Android and MPOS products to new markets, as these terminals offer an extremely competitive functionality, price and quality package and complement the bespoke VAS offered by Dashpay. This development was in response to client demand for alternative solutions tailored to specific market segments.
The Payments segment demonstrated a resilient trading performance notwithstanding continued macroeconomic headwinds and the transactional cut-off effects alluded to above. The division generated revenue of R186.3 million (September 2018: R253.6 million). Absent the unforeseen delayed sales in September, Revenue would have been in excess of the comparable period. EBITDA of R50.0 million (September 2018: R70.0 million), down 29.6% and a profit after tax of R30.6 million (September 2018: R50.7 million), down 39.6%.
COMMENTARY CONTINUED
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 57for the six months ended 30 September 2019
Services Division (Synthesis)Synthesis offers highly specialised software development, consulting and integration services and technology-based product solutions to banking, financial institutions, retail and telecommunications enterprises in South Africa and other emerging markets.
Synthesis’ main initiatives span four main areas:1. RegTech provides regulatory reporting
solutions to financial institutions.
2. Digital and Emerging Tech provides secure mobile and web digital channels for financial services institutions to enhance their customers’ experience, as well as provide access to emerging technologies which include machine learning, artificial intelligence, big data analytics and blockchain technology.
3. Cloud assists customers in becoming cloud-ready, executing mass migrations, harnessing the benefits of innovation and big data analytics, and extracting cost savings and regulatory benefits. Cloud is the fastest growing segment and Synthesis has a close strategic relationship with Amazon Web Services (AWS), the world’s leading cloud platform provider. The first AWS infrastructure region on the African continent is expected to open in Cape Town in the first half of 2020. As a leading AWS partner, Synthesis is well positioned to capitalise on the launch of the new AWS region for South African businesses.
4. Synthesis Academy provides onsite or digital-based training to enterprises and corporates on a range of emerging technology topics, such as cloud, artificial intelligence (AI) and machine learning. The Academy facilitators are among the region’s leading technology professionals. The commercialisation of the Synthesis Academy offering has shown significant promise to provide the much-needed skills development and training for the South African market.
It has been a very positive first half of the year for Synthesis, with notable demand across all four service offerings. This is evidenced by the significant growth in revenue and profits for the period. Cloud is continuing to grow in advance of the AWS region coming to South Africa, while the Digital area is benefitting from many of Synthesis’ clients requiring new digital offerings for their customers. The RegTech area has shown promising growth, attracting several new customers to the mix.
Synthesis concluded several new partnerships, including VM ware, Confluent, Hashicorp and Cloudflare. Synthesis acts as either seller or professional service providers on those technologies which complement its Cloud services and are helping to deliver more comprehensive service offerings related to real-time data streaming, cloud infrastructure, cloud security, artificial intelligence and machine learning (AI/ML) and personalisation to customers. Using machine learning, Synthesis has also started building a data analysis and data engineering practice that is complementary to its digital and Cloud areas. The Synthesis focus on new customer verticals has shown favourable results. The sectors being
58 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
targeted are the Retail, Media and Telecoms, and Healthcare.
Synthesis increased revenue by 54.0% to R95.3 million (September 2018: R61.8 million), EBITDA by 47.8% to R27.2 million (September 2018: R18.4 million), and profit after tax by 31.0% to R17.6 million (September 2018: R13.4 million).
BROAD-BASED BLACK ECONOMIC EMPOWERMENTTransformation remains a key imperative for the Company and Capprec has continued to support and advance a number of BEE initiatives, being consistent with that provided in previous years.
Govchat and the Capital Appreciation Enterprise Development FundAs part of its transformation initiatives, Capprec established the Capital Appreciation Enterprise Development Fund in 2019, with its first funding allocation to GovChat Proprietary Limited, a South African black-controlled technology enterprise that facilitates engagement between citizens and their elected officials and which aims to make government responsive, agile and transparent in its engagements. GovChat concluded an agreement with the Department of Co-operative Development and Traditional Affairs to provide such services. GovChat recently launched its new headquarters in Cape Town, which includes a training centre designed to facilitate guidance and instruction on critical
subjects of interest to government in their engagement with citizens. GovChat also offers monthly roundtable engagements bringing together government, civil society and corporates to tackle critical issues, informed by data from the GovChat platform. Capprec is closely involved with the enterprise, offering in-house expertise and support in addition to the enterprise development funding. The team at Synthesis is responsible for building the GovChat technology platform. The relationship with GovChat presents a number of potential commercial opportunities which are consistent with the strategic objectives of Capital Appreciation.
PROSPECTSThe challenging economic and political environment in South Africa continues to be of concern, with few indicators suggesting any short-term improvement. This no doubt weighs heavily on the commercial activity of our clients and not unexpectedly, instils a cautious approach to their investment decisions. This state of affairs naturally dictates a well-considered and judicious approach to our future planning.
Notwithstanding the above, while the prevailing economic climate cannot be ignored, there is a well-developed pipeline of compelling organic and acquisitive growth opportunities that have been presented to Capprec management for evaluation. This provides a sense of cautious confidence as to the continued organic growth prospects of the group’s business units.
Innovative technologies and applications are accelerating at a rapid rate and are
COMMENTARY CONTINUED
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 59for the six months ended 30 September 2019
demanding the review of traditional business models, revenue streams, consumer expectations, products offered, services rendered, including operating cost structures and regulation. Managing this rapid and evolving change requires the appropriate skills and experience and a track record of creativity and innovation. Each of Capprec’s subsidiaries has a proven, well established reputation in such technology matters and this positively positions the Company to be regarded as a trusted partner to participate in this evolution.
Given the Company’s strong operating cash flows, cash resources and potential borrowing capacity, Capprec has the capacity to consider various Fintech related investment opportunities. Any acquisition will typically depend on the strategic fit, ideally at an earnings enhancing valuation, which can provide satisfactory growth, where Capprec’s capital and strategic capability can be successfully leveraged.
Investors should note that, due to the repurchase and cancellation of the 245 million shares on 27 August 2019, basic and headline earnings per share for the full year will be positively impacted by the reduced number of shares in issue.
On behalf of the Board
Michael (Motty) SacksNon-Executive Chairman
Michael Pimstein and Bradley SacksJoint Chief Executive Officers
Alan SalomonChief Financial Officer
Sandton18 November 2019
DIVIDENDSThe Board has pleasure in announcing that an interim dividend of 2.25 cents per ordinary share has been declared for the six months ended 30 September 2019 (September 2018: 2.25 cents per ordinary share).
We note the following:
• Dividends are subject to dividends withholding tax.
• The payment date for the dividend is Monday, 9 December 2019.
• Dividends have been declared out of profits available for distribution.
• Local dividends withholding tax is 20%.
• Gross dividend amount is 2.25 cents per ordinary share, which is 1.8000 cents per ordinary share net of withholding tax.
• Capprec has 1 310 000 000 ordinary shares in issue at the declaration date.
• Capprec’s Income Tax Reference Number is 9591281176.
The salient dates relating to the dividend are as follows:
Last day of trade cum dividend
Tuesday,3 December 2019
Shares commence trading ex-dividend
Wednesday,4 December 2019
Dividend record date Friday,6 December 2019
Dividend payment date Monday,9 December 2019
Share certificates for ordinary shares may not be dematerialised or rematerialised between Wednesday, 4 December 2019 and Friday, 6 December 2019, both days inclusive.
60 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
ACCOUNTING POLICIES AND BASIS OF PREPARATIONThese unaudited interim condensed consolidated financial results have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), its interpretations issued by the IFRS Interpretations Committee, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, presentation and disclosure as required by International Accounting Standard (IAS) 34 ‘Interim Financial Reporting’, the JSE Limited Listings Requirements and the requirements of the Companies Act, 71 of 2008 of South Africa. The accounting policies and methods of computation used in the preparation of the unaudited interim condensed consolidated financial results are in terms of IFRS and are consistent in all material respects with those applied in the most recent consolidated audited annual financial statements.
The fair value disclosures required by IAS 34:16A(j) and (i) are not disclosed in this announcement but are included in the unaudited interim consolidated financial results which are available for inspection at our offices.
PREPARATION OF UNAUDITED INTERIM FINANCIAL REPORTSThe unaudited interim condensed consolidated financial results herein have been prepared under the supervision of Mr Alan Salomon CA(SA) in his capacity as the Company Chief Financial Officer and were approved by the Board on 12 November 2019. For further information hereto, please refer to the section above captioned Accounting Policies and Basis of Preparation.
UNAUDITED INTERIM FINANCIAL RESULTSThis announcement contains forward-looking statements with respect to the economy and the results of the operations of Capprec, which by their nature, involve risk and uncertainty on economic circumstances that may or may not occur in the future.
Neither the financial information contained in this interim results presentation, nor any of the forward-looking statements recorded herein, have been audited or reviewed by Capprec’s external auditors.
COMMENTARY CONTINUED
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 61for the six months ended 30 September 2019
Figures in Rand Notes
Unaudited6 months
ended30 September
2019%
change
Unauditedsix months
ended30 September
2018
Revenue 2 281 550 507 (10.7) 315 418 112Cost of sales (160 270 700) (184 734 426)
Gross profit 121 279 807 (7.2) 130 683 686Other income 589 827 –Operating expenses (53 635 316) 11.9 (47 917 020)
Trading profit 68 234 318 (17.6) 82 766 666Share-based payment expense (758 500) (196 600)Depreciation (7 995 166) (3 479 355)Amortisation of intangibles (7 858 144) (6 804 622)
Operating profit 51 622 508 (28.6) 72 286 089Finance income 21 812 962 17 663 935Finance charges (1 580 415) (299 676)Equity accounted in loss of associate (346 092) (1 205 636)
Gain on sale of investment in associate 3 8 664 739 –
Profit before taxation 80 173 702 (9.4) 88 444 712Taxation (22 302 491) (25 142 547)
Profit after taxation 57 871 211 (8.6) 63 302 165Other comprehensive income – –
Total comprehensive income for the year 57 871 211 (8.6) 63 302 165
Basic earnings per share (cents) 3.94 (6.8) 4.23Headline earnings per share (cents) 4 3.43 (19.0) 4.23Diluted basic earnings per share (cents) 3.86 (6.7) 4.14Diluted headline earnings per share (cents) 3.36 (18.9) 4.14Number of ordinary shares in issue 5 1 310 000 000 (15.8) 1 555 000 000Weighted average number of shares in issue 1 468 535 272 (1.9) 1 497 743 079Diluted weighted average number of shares in issue 1 498 535 272 (2.0) 1 529 650 423
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOMEfor the six months ended 30 September 2019
62 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
CONDENSED GROUP STATEMENT OF FINANCIAL POSITIONat 30 September 2019
Figures in Rand Notes
Unaudited30 September
2019
Unaudited30 September
2018
Audited31 March
2019
ASSETSProperty, plant and equipment 25 667 776 18 764 233 21 737 333Right-of-use asset 7 28 396 674 – –Intangible assets 65 597 653 66 654 548 62 258 622Goodwill 728 577 776 728 577 776 728 577 776Other financial assets 3 – 18 297 738 19 011 040Investment in associates 3 – 27 582 673 26 360 129Deferred tax 6 085 509 6 416 309 5 141 435
Non-current assets 854 325 388 866 293 277 863 086 335
Inventories 52 852 857 10 102 704 16 167 245Trade and other receivables 131 697 408 108 304 450 44 367 518Loan to associate 3 – 5 091 841 5 179 241Taxation receivable 3 150 549 510 154 4 588 251Cash and cash equivalents 415 896 136 551 525 305 611 227 490
Current assets 603 596 950 675 534 454 681 529 745
Total assets 1 457 922 338 1 541 827 731 1 544 616 080
EQUITY AND LIABILITIESCapital and reservesShare capital 5 1 009 048 437 1 207 330 459 1 204 657 490Share-based payment reserve 1 930 900 447 100 1 172 400Contingent consideration reserve 24 900 000 24 900 000 24 900 000Retained income 241 265 050 188 690 386 216 385 606
Total equity 1 277 144 387 1 421 367 945 1 447 115 496
Deferred revenue 8 229 167 6 404 167 9 154 167Long-term portion of right-of-use lease liabilities 7 23 151 720 – –Contingent consideration 9 635 790 8 975 889 9 271 591Deferred tax 14 359 427 18 074 467 16 216 947
Non-current liabilities 55 376 104 33 454 523 34 642 705
Trade and other payables 112 560 085 72 361 880 53 356 931Bank overdraft – – 2 434 271Operating lease liability – – 1 182 800Short-term portion of right-of-use lease liabilities 7 7 351 847 – –Deferred revenue 2 427 501 1 325 000 1 850 000Taxation payable 3 062 414 13 318 383 4 033 877
Current liabilities 125 401 847 87 005 263 62 857 879
Total equity and liabilities 1 457 922 338 1 541 827 731 1 544 616 080
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 63for the six months ended 30 September 2019
Figures in Rand Notes
Unauditedsix months
ended30 September
2019
Unauditedsix months
ended30 September
2018
Auditedyear ended
31 March2019
Profit before taxation 80 173 702 88 444 712 173 795 675Adjustments for:Finance income received (21 812 962) (17 663 935) (38 280 325)Finance costs paid 369 194 299 676 601 735Non-cash flow items 6 849 720 11 512 616 24 882 833Changes in working capital 6 (45 501 681) 9 829 932 51 698 155
Cash flow from operations 20 077 973 92 423 001 212 698 073Finance income received 21 164 766 17 663 935 36 896 736Finance costs paid – (13 405) (19 763)Dividends paid (29 827 160) (29 967 760) (63 583 229)Taxation received – – 309 425Taxation paid (26 318 000) (23 472 972) (62 276 347)
Net cash flow from operating activities (14 902 421) 56 632 799 124 024 895
Cash flows from investing activitiesAcquisition of property, plant and equipment (9 757 896) (8 269 827) (16 532 856)Acquisition of intangible assets (11 197 175) (2 006 708) (4 789 880)Proceeds on disposal of property, plant and equipment 122 956 1 301 921 1 467 511Repayment of loan from associate 3 5 021 341 – –Proceeds from disposal of associate 3 34 978 659 – –Costs associated with circular to shareholders (1 585 001) – –Costs associated with sale of associate (299 883) – –
Net cash flow from investing activities 17 283 001 (8 974 614) (19 855 225)
Cash flows from financing activitiesRepurchase of cancelled ordinary shares 3 (192 726 496) – –Costs associated with repurchase of cancelled shares (1 444 894) – –Repurchase of treasury ordinary shares (1 437 663) (4 450 640) (7 123 610)Repayment of loans – (4 362 102) (2 989 613)
Net cash flow from financing activities (195 609 053) (8 812 742) (10 113 223)
Net increase/(decrease) in cash and cash equivalents (193 228 473) 38 845 443 94 056 447Cash and cash equivalents at beginning of period 608 793 219 512 679 862 513 169 862Net foreign exchange difference 331 390 1 566 910
Cash and cash equivalents at end of period 415 896 136 551 525 305 608 793 219
Split as follows:Cash and cash equivalents 415 896 136 551 525 305 611 227 490Bank overdraft – – (2 434 271)
415 896 136 551 525 305 608 793 219
CONDENSED GROUP STATEMENT OF CASH FLOWSfor the six months ended 30 September 2019
64 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITYfor the six months ended 30 September 2019
Figures in Rand
Ordinaryshare
capital
Share-basedpayment
reserve
Contingentconsideration
reserveRetained
incomeTotal
equity
Balance at 1 April 2018 1 211 781 099 250 500 24 900 000 155 355 981 1 392 287 580
Share-based payment reserve – 196 600 – – 196 600
Repurchase of treasury shares (4 450 640) – – – (4 450 640)
Cash dividend paid – – – (29 967 760) (29 967 760)
Total comprehensive income for the six months ended 30 September 2018 – – – 63 302 165 63 302 165
Balance at 30 September 2018 1 207 330 459 447 100 24 900 000 188 690 386 1 421 367 945
Share-based payment reserve – 725 300 – – 725 300Repurchase of treasury shares (2 672 969) – – – (2 672 969)Cash dividend paid – – – (33 615 469) (33 615 469)Total comprehensive income for the six months ended 31 March 2019 – – – 61 310 689 61 310 689
Balance at 31 March 2019 1 204 657 490 1 172 400 24 900 000 216 385 606 1 447 115 496
Repurchase and cancellation of ordinary shares (192 726 496) – – – (192 726 496)Costs associated with repurchase of ordinary shares (1 444 894) – – – (1 444 894)Costs associated with circular to shareholders – – – (1 585 001) (1 585 001)Share-based payment reserve – 758 500 – – 758 500Repurchase of treasury ordinary shares (1 437 663) – – – (1 437 663)Cash dividend paid – – – (29 827 160) (29 827 160)Total comprehensive income for the six months ended 30 September 2019 – – – 57 871 211 57 871 211Settlement of pre-acquisition tax receivable – – – (2 169 537) (2 169 537)Deferred tax adjustment on adoption of IFRS 16 – – – 589 931 589 931
Balance at 30 September 2019 1 009 048 437 1 930 900 24 900 000 241 265 050 1 277 144 387
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 65for the six months ended 30 September 2019
Figures in Rand
Ordinaryshare
capital
Share-basedpayment
reserve
Contingentconsideration
reserveRetained
incomeTotal
equity
Balance at 1 April 2018 1 211 781 099 250 500 24 900 000 155 355 981 1 392 287 580
Share-based payment reserve – 196 600 – – 196 600
Repurchase of treasury shares (4 450 640) – – – (4 450 640)
Cash dividend paid – – – (29 967 760) (29 967 760)
Total comprehensive income for the six months ended 30 September 2018 – – – 63 302 165 63 302 165
Balance at 30 September 2018 1 207 330 459 447 100 24 900 000 188 690 386 1 421 367 945
Share-based payment reserve – 725 300 – – 725 300Repurchase of treasury shares (2 672 969) – – – (2 672 969)Cash dividend paid – – – (33 615 469) (33 615 469)Total comprehensive income for the six months ended 31 March 2019 – – – 61 310 689 61 310 689
Balance at 31 March 2019 1 204 657 490 1 172 400 24 900 000 216 385 606 1 447 115 496
Repurchase and cancellation of ordinary shares (192 726 496) – – – (192 726 496)Costs associated with repurchase of ordinary shares (1 444 894) – – – (1 444 894)Costs associated with circular to shareholders – – – (1 585 001) (1 585 001)Share-based payment reserve – 758 500 – – 758 500Repurchase of treasury ordinary shares (1 437 663) – – – (1 437 663)Cash dividend paid – – – (29 827 160) (29 827 160)Total comprehensive income for the six months ended 30 September 2019 – – – 57 871 211 57 871 211Settlement of pre-acquisition tax receivable – – – (2 169 537) (2 169 537)Deferred tax adjustment on adoption of IFRS 16 – – – 589 931 589 931
Balance at 30 September 2019 1 009 048 437 1 930 900 24 900 000 241 265 050 1 277 144 387
66 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
CONSOLIDATED SEGMENT ANALYSISfor the six months ended 30 September 2019
NOTE 1
Figures in Rand
Payments Software and Services Corporate Group
30 September2019
30 September 2018*
30 September2019
30 September 2018*
30 September2019
30 September 2018*
30 September2019
30 September 2018*
Revenue 186 326 683 253 582 243 95 223 824 61 835 869 – – 281 550 507 315 418 112Trading profit/(loss) 49 314 651 69 981 401 27 196 300 18 380 501 (8 276 633) (5 595 237) 68 234 318 82 766 665Depreciation: Property, plant and equipment (5 653 035) (2 980 227) (1 527 329) (267 863) (814 802) (231 265) (7 995 166) (3 479 355)Amortisation of intangibles (600 711) (170 622) (623 433) – (6 634 000) (6 634 000) (7 858 144) (6 804 622)Operating profit 42 872 714 66 830 552 24 504 419 18 112 639 (15 754 625) (12 657 102) 51 622 508 72 286 089Profit after taxation 30 635 162 50 732 788 17 597 959 13 428 855 9 638 090 (859 478) 57 871 211 63 302 165Total assets 260 828 608 190 898 644 85 634 290 47 369 131 1 111 459 440 1 303 559 956 1 457 922 338 1 541 827 731Total liabilities 106 342 429 70 330 835 40 061 402 19 227 101 34 374 120 30 901 852 180 777 951 120 459 788Net assets 154 486 179 120 567 809 45 572 888 28 142 030 1 077 085 320 1 272 658 106 1 277 144 387 1 421 367 945
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 67for the six months ended 30 September 2019
NOTE 1
Figures in Rand
Payments Software and Services Corporate Group
30 September2019
30 September 2018*
30 September2019
30 September 2018*
30 September2019
30 September 2018*
30 September2019
30 September 2018*
Revenue 186 326 683 253 582 243 95 223 824 61 835 869 – – 281 550 507 315 418 112Trading profit/(loss) 49 314 651 69 981 401 27 196 300 18 380 501 (8 276 633) (5 595 237) 68 234 318 82 766 665Depreciation: Property, plant and equipment (5 653 035) (2 980 227) (1 527 329) (267 863) (814 802) (231 265) (7 995 166) (3 479 355)Amortisation of intangibles (600 711) (170 622) (623 433) – (6 634 000) (6 634 000) (7 858 144) (6 804 622)Operating profit 42 872 714 66 830 552 24 504 419 18 112 639 (15 754 625) (12 657 102) 51 622 508 72 286 089Profit after taxation 30 635 162 50 732 788 17 597 959 13 428 855 9 638 090 (859 478) 57 871 211 63 302 165Total assets 260 828 608 190 898 644 85 634 290 47 369 131 1 111 459 440 1 303 559 956 1 457 922 338 1 541 827 731Total liabilities 106 342 429 70 330 835 40 061 402 19 227 101 34 374 120 30 901 852 180 777 951 120 459 788Net assets 154 486 179 120 567 809 45 572 888 28 142 030 1 077 085 320 1 272 658 106 1 277 144 387 1 421 367 945
68 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
Figures in Rand30 September
201930 September
2018*
NOTE 2. REVENUEPayments divisionRental income 15 790 539 44 793 577Maintenance and support service fees 57 027 562 28 630 633Sale of terminals 98 968 383 165 675 777Merchant acquiring and set-up fees 8 270 620 7 441 404Sundry revenue 6 269 579 7 040 852
186 326 683 253 582 243
Software and Services divisionServices and consultancy fees 68 154 819 45 915 512Licence and subscription fees 25 685 108 14 038 895Hardware 1 383 897 1 881 462
95 223 824 61 835 869
Total revenue 281 550 507 315 418 112
Geographic regionSouth Africa 268 412 616 307 363 110Rest of Africa and Indian Ocean Islands 6 238 946 8 055 002United States of America 6 898 945 –
281 550 507 315 418 112
NOTE 3. SHARE REPURCHASE AND SMALL RELATED PARTY TRANSACTIONThe Company and the founder and principal vendor of African Resonance, Dr Hanoch Neishlos, concluded a comprehensive agreement on 9 June 2019, certain key terms of which are follows:
• The transaction was approved by shareholders on 27 August 2019 and the settlement occurred on 17 September 2019.
• The Company repurchased 245 000 000 shares held by Dr Neishlos and related associates, amounting to R192 726 496 plus associated costs of R1 444 894. The shares repurchased were cancelled with effect from 27 August 2019.
• The Company sold its 17.45% interest in Resonance Australia Proprietary Limited and its claims on loan account, for an aggregate amount of R40 million, which was settled on 17 September 2019.
• African Resonance Business Solutions (Proprietary) Limited (“African Resonance”) acquired the African Resonance and Dashpay (Proprietary) Limited related intellectual property from Uplink Technology Services (Proprietary) Limited for R5 million plus associated costs of R1 122 569.
NOTESfor the six months ended 30 September 2019
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 69for the six months ended 30 September 2019
• Dr Neishlos repaid his loan on 17 September 2019 to African Resonance amounting to R19 658 163.
• All related party receivables and obligations were settled in full between the parties on 17 September 2019.
Sale of investment in associateBalance as at 31 March 2019 26 360 129Equity accounted loss during the period to effective date of sale (346 092)Related costs 299 883
Balance at date of sale 26 313 920Proceeds on disposal 34 978 659
Gain on sale of investment in associate 8 664 739
Settlement of loan claim in associateBalance as at 31 March 2019 5 179 241Mark to market foreign exchange loss during the period to date of settlement. (157 900)
Amount settled on 17 September 2019 5 021 341
70 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
NOTESfor the six months ended 30 September 2019
Figures in Rand30 September
201930 September
2018*
NOTE 4. RECONCILIATION OF HEADLINE EARNINGSProfit for the year attributable to ordinary shareholders 57 871 211 63 302 165Less: Gain on sale of investment in associate (8 664 739) –Add back: capital gains tax on sale of investment in associate 1 104 823 –
Headline earnings 50 311 295 63 302 165
30 September2019
31 March2019
30 September2018
Number Number Number
NOTE 5. SHARE CAPITALReconciliation of issued ordinary sharesNumber of issued ordinary shares at the beginning of the period 1 555 000 000 1 555 000 000 1 555 000 000Number of issued ordinary shares repurchased and cancelled during the period (see note 3) (245 000 000) – –
Number of issued ordinary shares at the end of the period 1 310 000 000 1 555 000 000 1 555 000 000
Number of issued ordinary treasury shares on hand at end of the period (65 563 500) (63 642 000) (60 300 000)
Number of issued ordinary shares, net of treasury shares at the end of the period 1 244 436 500 1 491 358 000 1 494 700 000
During the reporting period the Company repurchased 1 958 500 treasury ordinary shares at an average price of 74.3 cents per share.
30 September2019
31 March2019
30 September2018
Number Number Number
NOTE 6. CHANGES IN WORKING CAPITALInventories (36 685 612) 11 217 404 5 152 863Deferred income (347 499) (662 500) 2 612 500Trade and other receivables (87 329 889) (40 269 923) 23 667 009Other financial assets 19 658 163 – –Trade and other payables 59 203 156 39 544 951 20 265 783
Changes in working capital (45 501 681) 9 829 932 51 698 155
Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results 71for the six months ended 30 September 2019
NOTE 7. CHANGES IN ACCOUNTING POLICIESThe unaudited interim condensed consolidated financial statements do not include all the information and disclosures required in the audited annual financial statements and should be read in conjunction with the Group’s audited annual financial statements as at 31 March 2019. The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s audited annual consolidated financial statements for the year ended 31 March 2019, except for the adoption of new standards effective as at 1 April 2019.
IFRS 16 (LEASES)IFRS 16 supersedes the previous standards relating to the accounting treatment of leases (IAS 17 Leases and IFRIC 4 Determining whether an Arrangement contains a Lease). The Group has adopted IFRS 16 using the modified retrospective method of adoption with the date of initial application being 1 April 2019, using the incremental borrowing rate as opposed to the interest rate implicit to the lease, across all leases. Therefore, the comparative information for 2018 is reported under IAS 17 and not comparable to the information presented for 2019.
On adoption of IFRS 16 at transition date, the Group recognised a right-of-use asset to the value of R31 217 716 (the derecognition of the previous operating lease straight-line liabilities of R1 182 800 was offset against the right-of-use asset) and a lease liability of R33 583 316. There was no impact to equity on initial application.
As a result of adopting IFRS 16, operating profit after tax for the six months ended 30 September 2019 has decreased by R262 297 due to the replacement of operating lease expenses with depreciation on the right-of-use assets (R4 003 817) and interest expense on lease liabilities (R1 211 222), totalling an amount of R5 215 039.
The effects of the adoption of IFRS 16 is as follows:
Impact on the statements of financial position as at 30 September 2019:
AssetsRight-of-use assets 32 400 491Accumulated depreciation (4 003 817)
Total assets 28 396 674
LiabilitiesLease liability 30 503 567
Total liabilities 30 503 567
72 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
Impact on the statement of comprehensive income for the period ending 30 September 2019:Depreciation (4 003 817)IAS 17 rent expense 4 713 854
Profit from operating activities 710 037Finance cost (1 211 222)Impact on income tax expense 238 888
Impact on profit after tax for the period (262 297)
8.1 Standards and interpretations adopted in the current year
8.1.1 IFRS 16 – Leases: The impact of these amendments has been accounted for in the September 2019 interim results (see note 7)
8.2 Standards and interpretations not yet effective
Standards, amendments and interpretations issued but not yet effective have been assessed for applicability to the Company and management has concluded that they are not expected to have a material impact on future financial statements.
NOTE 9. POST PERIOD-END EVENTSThe directors are not aware of any matter or circumstance arising since the end of the financial period.
NOTESfor the six months ended 30 September 2019
Registered office
61 Katherine Street, Sandton, 2196
Directors
MI Sacks# (Chairman), MR Pimstein* (Joint Chief Executive), BJ Sacks* (Joint Chief Executive), AC Salomon* (Chief Financial Officer), MB Shapiro*, B Bulo#, KD Dlamini#, JM Kahn#, EM Kruger#, R Morar#, VM Sekese#, CL Valkin#,
*Executive #Non-executive
Company Secretary: PKF Octogon, [email protected]
Auditors: Ernst & Young Inc.
Sponsor: Investec Bank Limited
Email: [email protected]
Website: www.capitalappreciation.co.za
Transfer Secretary
Computershare Investor Services Proprietary LimitedRosebank Towers, 15 Biermann Street, Rosebank, 2001(PO Box 61051, Marshalltown, 2107)
CORPORATE INFORMATION
74 Capital Appreciation Limited Unaudited Interim Condensed Consolidated Financial Results for the six months ended 30 September 2019
cap
ital
app
reci
atio
n.c
o.za