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CAPITAL APPRECIATION LIMITED - Unaudited interim condensed financial results for the six months ended 30 September 2019 and Cash dividend

Release Date: 18/11/2019 07:05
Code(s): CTA     PDF:  
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Unaudited interim condensed financial results for the six months ended 30 September 2019 and Cash dividend

CAPITAL APPRECIATION LIMITED
Incorporated in the Republic of South Africa
Registration number: 2014/253277/06
JSE share code: CTA  ISIN: ZAE000208245
"Capprec" or "the Company"


UNAUDITED INTERIM CONDENSED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2019 
AND CASH DIVIDEND DECLARATION


ABOUT CAPPREC
Capital Appreciation Limited ("Capprec" or "the Company") 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
terminals 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.

SALIENT FEATURES 

Operational
-   African Resonance acquires ownership of all core Intellectual Property
-   Strategic repurchase and cancellation of 245 million shares successfully completed
-   African Resonance fleet of 154 000 payment terminals in the hands of clients, increase of
    10% since March 2019 (31% since September 2018)
-   African Resonance installed terminals grew by 23% to 117 000 since March 2019 (52% since
    September 2018)
-   Synthesis continues its track record of 31% compound earnings growth
-   Synthesis technology teams take on a more pivotal role within the Capprec group
-   Dashpay concluded Distribution and Use Agreement for new second source of
    quality terminals with second largest manufacturer of terminals globally
-   Dashpay roll out progressing 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

Financial
-   Revenue R281.6 million -10.7%
-   EBITDA R67.9 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 HEPS 3.81 cents -16.3%
-   Interim dividend of 2.25 cents per ordinary share (September 2018: 2.25 cents per ordinary share)
-   R416 million cash available for reinvestment
-   Net asset value per share of 97 cents, up 4.8%
-   Period's results negatively impacted due to late arrival of budgeted terminal imports, shifting 
    expected revenues into 2nd period
-   Significant revenues booked and cash generated in October 2019

CURRENT YEAR PERFORMANCE
Given the difficult economic conditions prevailing during the reporting period, Capital Appreciation
Limited delivered a satisfactory performance. The Company was able to significantly increase its clients'
aggregate payment terminal estate during the period, also concluding additional strategic relationships
for transaction processing. The escalating demand for digital and cloud-based services, attracted new
blue-chip clients, resulting in the specialised Software and Services division increasing its earnings by 31%.

The financial results, however, do not fully reflect the group's underlying performance, given that a late
arrival of a budgeted sizeable import of terminals, prevented its execution prior to the cut-off date of 30
September 2019. Significant revenue, earnings and cash generation therefore took place in October 2019
related, inter alia, to the terminals in transit and strong cash inflows from receivables.

Capprec also successfully concluded the share re-purchase and small related party transaction,
advantageously reducing the number of shares in issue by 15.76% to 1 310 million. The Company declared
an interim dividend of 2.25 cents per ordinary share, consistent with that of the previous comparable
interim period.

DIVIDENDS

The 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).

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. 

SHORT-FORM NOTICE
The contents of this short-form announcement are the responsibility of the Board of Directors of the
Company (Board). Shareholders are advised that this short-form announcement represents a brief
summary of the information contained in the full announcement, published on
https://senspdf.jse.co.za/documents/2019/jse/isse/ctae/Interims.pdf and on
CAPPREC's website www.capitalappreciation.co.za. Any investment decisions by investors and/or
shareholders should be based on a consideration of the full announcement as a whole and shareholders
are encouraged to review the full announcement as directed above. Investors and/or shareholders may
request copies of the full announcement by contacting the Company Secretary, details of whom are set
out below. The announcement is available for inspection at the registered office of the company at
no charge and during business hours.

For a more comprehensive analysis of CAPPREC's results and outlook, please refer to
www.capitalappreciation.co.za


Registered office: 
1st Floor 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 Octagon 
PeterKatz@PKFoctagon.com

Transfer secretaries: 
Computershare Investor Services (Proprietary) Limited

18 November 2019

Sponsor: 
Investec Bank Limited

Auditor:
Ernst & Young Inc



Date: 18/11/2019 07:05:00
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