capital appreciation limited unaudited interim results · 2018-11-13 · 6 capital appreciation...
TRANSCRIPT
UNAUDITEDINTERIM RESULTS
CAPITAL APPRECIATIONLIMITED
for the six months ended 30 September 2018
1
CA
PP
RE
C o
verv
iew
Hig
hlig
hts
fo
r th
e p
erio
d
Th
e o
pp
ort
un
ity
Fin
an
cia
l pe
rfo
rma
nce
Ab
ou
t o
ur
inve
stm
en
ts
Pro
spe
cts
OU
TL
INE
1 2 3 4 5 6 7A
nn
exu
re
Capital Appreciation Limited Unaudited interim condensed consolidated financial results2
CA
PP
RE
C
AB
OU
T C
AP
ITA
L A
PP
RE
CIA
TIO
N
We
ow
n, m
an
ag
e, in
ve
st
in, a
nd
pro
mo
te e
nte
rpri
se
s t
ha
t in
no
va
te a
nd
se
ek
to
s
erv
e o
r p
art
ne
r w
ith
es
tab
lis
hed
an
d e
me
rgin
g f
ina
nc
ial in
sti
tuti
on
s
PA
YM
EN
TS
& P
AY
ME
NT
IN
FR
AS
TR
UC
TU
RE
SO
FT
WA
RE
&
SE
RV
ICE
SIN
TE
RN
AT
ION
AL
*
AU
ST
RA
LIA
100%
100%
17.4
5%
3
30
SE
PT
EM
BE
R 2
01
8H
IGH
LIG
HT
S
Capital Appreciation Limited Unaudited interim condensed consolidated financial results4
OP
ER
AT
ION
AL
AC
CO
MP
LIS
HM
EN
TS
Exp
an
de
d a
nd
en
ha
nce
d c
lien
t re
latio
nship
s in
all
se
cto
rs –
Pa
yme
nts
an
d S
oft
wa
re d
ivis
ion
s
•N
ew
blu
e-c
hip
clie
nts
Est
ablis
he
d n
ew
Syn
the
sis
offic
e in
Cap
e T
ow
n
Ag
ree
me
nt fo
r e
nte
rpri
se
de
plo
yme
nt o
f
Da
sh
pa
yp
roce
ssin
g te
chn
olo
gy
Add
ition
al A
mazo
n W
eb
Serv
ices
(AW
S)
accre
dita
tion r
eceiv
ed
36
% in
cre
ase
in n
um
be
r o
f te
rmin
als
ow
ne
d
by
clie
nts
•M
ore
th
an
10
3 0
00
te
rmin
als
•G
oo
d p
ipe
line
•S
cale
op
era
tor
with
ma
rke
t sh
are
ga
ins
Exe
cutive r
ecru
itm
en
t
•H
ire
d k
ey
expe
rien
ced e
xecutives
(Fin
an
ce a
nd D
ashp
ay)
Su
cce
ssf
ul s
oft la
un
ch
of
Da
sh
pa
yw
ith
an
nu
alis
ed
gro
ss
tra
nsa
ctio
n v
alu
e (
GT
V)
of
mo
re th
an
R1
.4 b
illio
n*
Imp
roved
B-B
BE
E r
atin
g
•A
fric
an
Reson
an
ce –
Le
vel 2
co
ntr
ibu
tor
•S
ynth
esi
s –
Le
vel 3
co
ntr
ibu
tor
* B
as
ed
on
GT
V t
hro
ug
h t
he
Da
sh
pa
yn
etw
ork
in
Oc
tob
er
20
18
an
nu
ali
se
d
Recru
ited
ad
ditio
nal a
cco
mplis
hed
team
mem
be
rs
•In
crea
sed
ta
lent po
ol b
y 12
% (
26
ne
w e
mp
loye
es)
and
22
ne
w
learn
ers
hip
s
Co
ncl
ud
ed
“IS
O A
gre
em
en
t” w
ith
Ne
db
ank to
com
ple
me
nt “A
gg
reg
ato
r A
gre
em
en
t” w
ith
Me
rca
ntile
Ba
nk
Pro
ud
to
no
w b
e a
ss
oc
iate
d w
ith
all
ma
jor
SA
ba
nk
s a
nd
als
o m
an
y o
the
r b
an
ks
an
d f
ina
nc
ial
ins
titu
tio
ns
5
CO
MP
AR
ING
20
18
TO
20
17
Th
e a
cqu
isitio
n o
f su
bsi
dia
rie
s b
eca
me
effe
ctive
5 M
ay
20
17
. T
he
20
17
fin
an
cia
l re
sults in
clu
de
pe
rfo
rma
nce
of th
e
acq
uir
ed
bu
sin
ess
es
for
5 m
on
ths o
nly
.
CO
MP
AR
ISO
N V
S.
PR
IOR
YE
AR
Th
e a
lloca
tion
of in
tan
gib
les
ari
sin
g f
rom
th
e a
cq
uis
itio
n o
f th
e n
ew
su
bsi
dia
rie
s w
as
on
ly c
on
clu
de
d in
Ma
rch
20
18
an
d
the
am
ort
isa
tion
arisi
ng
wa
s n
ot a
va
ilab
le a
t th
e tim
e th
e
Se
pte
mb
er
20
17
re
sults
we
re r
ele
ase
d. T
he
20
17
re
su
lts
are
"re
-pre
sen
ted
" to
incl
ud
e t
he
re
su
lts o
f th
e p
urc
ha
se
p
rice
allo
catio
n e
xerc
ise
.
AM
OR
TIS
AT
ION
O
F I
NTA
NG
IBL
ES
Su
bsi
dia
rie
s a
re g
en
era
ting
su
bsta
ntia
l g
row
th a
nd
an
in
ve
stm
en
t in
ca
pa
city
to
acc
om
mo
da
te fu
ture
gro
wth
wa
s
exp
en
sed
du
rin
g th
is h
alf y
ea
r. T
his
am
ou
nte
d to
a
pp
roxi
ma
tely
R2
0 m
illio
n fo
r th
e p
eri
od
, o
f w
hic
h
R1
3 m
illio
n w
as
lab
ou
r-re
late
d.
INV
ES
TM
EN
T I
N
OP
ER
AT
ING
IN
FR
AS
TR
UC
TU
RE
Capital Appreciation Limited Unaudited interim condensed consolidated financial results6
FIN
AN
CIA
L G
RO
UP
HIG
HL
IGH
TS
Reven
ue
R 3
15.4
millio
n56%
Cash
flo
w f
rom
opera
tions
R 9
2.4
mill
ion
Cash
conve
rsio
n
(% o
f tr
adin
g p
rofit
)11
2%
127%
81%
HE
PS
4.2
3 c
ents
NH
EP
S4.5
5 c
ents
Cash
EP
S4.6
0 c
ents
Div
idends
2.2
5 c
ents
13%
13%
277%
12.5
%
Ca
sh
flo
w
Ca
pit
ali
sa
tio
n &
Ca
sh
re
so
urc
es
Equity
R 1
.421 b
illio
n
Ava
ilable
cash
per
share
37 c
ents
5%
22%
Cash
ava
ilable
fo
r in
vest
ment
R 5
51.5
mill
ion
19%
Re
ve
nu
eE
arn
ing
s &
Div
ide
nd
s
So
lid
resu
lts a
gain
st
backd
rop
of
po
liti
cal
un
cert
ain
ty a
nd
eco
no
mic
dif
ficu
lty
NA
V p
er
share
95 c
ents
7%
EB
ITD
AR
81.4
mill
ion
Tra
din
g p
rofit
R 8
2.8
mill
ion
Pro
fit a
fter
tax
R 6
3.3
mill
ion
Norm
alis
ed
pro
fit a
fter
tax
R 6
8.2
mill
ion
24%
25%
13%
13%
Pro
fit
7
DIV
ISIO
NA
L P
ER
FO
RM
AN
CE
PA
YM
EN
TS
& P
AY
ME
NT
IN
FR
AS
TR
UC
TU
RE
SO
FT
WA
RE
&S
ER
VIC
ES
•S
trength
ened r
ela
tionsh
ip w
ith e
xist
ing c
lients
•N
ew
blu
e-c
hip
clie
nt
rela
tionsh
ips
est
ablis
hed
•S
trong p
ipelin
e•
Contin
ued t
o in
crease
the n
um
ber
of devi
ces
supplie
d t
o m
ark
et
•C
ontin
ued inve
stm
ent in
and d
eve
lopm
ent
of in
nova
tive p
latform
s and p
roduct
s•
Succ
ess
ful so
ft la
unch
of new
Dash
pay
pla
tform
•C
ontin
uin
g w
ith d
elib
era
te,
pro
gre
ssiv
e r
oll-
out
of D
ash
pay
serv
ices
•In
crease
d o
pera
tional ca
paci
ty
•S
trength
ened r
ela
tionsh
ip w
ith e
xist
ing c
lients
•N
ew
blu
e-c
hip
clie
nt
rela
tionsh
ips
est
ablis
hed
•S
ecu
red a
dditi
onal A
WS
acc
redita
tion
•C
ontin
ued t
o c
em
ent A
WS
leaders
hip
•D
ivers
ified r
eve
nue s
tream
to in
clude g
row
ing
US
$ in
com
e•
New
offic
e o
pened in C
ape T
ow
n•
Incr
ease
d o
pera
tional ca
paci
ty
•A
WS
announce
d S
A b
ase
d r
egio
nal data
centr
e to
open in e
arly
2020
RE
VE
NU
EE
BIT
DA
HIGHLIGHTS
INC
RE
AS
E V
S. P
RIO
R
70.3
%27.8
%
Pa
ymen
tsS
oft
wa
re
INC
RE
AS
E V
S. P
RIO
R
64.4
%54.5
%
Pa
ymen
tsS
oft
wa
re
80
.4%
19
.6%
Pa
ym
en
ts &
P
aym
en
t In
fra
str
uc
ture
So
ftw
are
&
Se
rvic
es
79
.2%
20
.8%
Pa
ym
en
ts &
P
aym
en
t In
fra
str
uc
ture
So
ftw
are
&
Se
rvic
es
Capital Appreciation Limited Unaudited interim condensed consolidated financial results8
TH
EO
PP
OR
TU
NIT
Y
9
CH
AR
AC
TE
RIS
TIC
S O
F F
UT
UR
E P
AY
ME
NT
S G
LO
BA
LLY
Inn
ovati
on
s w
ill m
ake p
aym
en
ts m
ore
cash
less a
nd
in
vis
ible
, als
o
en
ab
lin
g d
ata
dri
ven
en
gag
em
en
t p
latf
orm
s f
or
clien
ts
LE
SS
C
AS
HIN
VIS
IBL
E
PA
YM
EN
TS
PA
YM
EN
TS
AS
A M
EA
NS
O
F E
NG
AG
ME
NT
TH
E V
AL
UE
O
F D
ATA
LO
AN
S M
AD
E
EA
SIE
RT
RA
NS
AC
TIO
N C
OS
TS
D
EC
LIN
ING
RA
PID
LY
SO
UR
CE
: D
ER
IVE
D F
RO
M W
OR
LD
EC
ON
OM
IC F
OR
UM
RE
PO
RT
Capital Appreciation Limited Unaudited interim condensed consolidated financial results10
MO
VE
TO
EL
EC
TR
ON
IC P
AY
ME
NT
S C
ON
TIN
UE
SS
ou
th A
fric
a
SO
UR
CE
: P
AS
A A
NN
UA
L R
EP
OR
T 2
01
7
RETAIL PAYMENTS CARD ACTIVITY
In 2
01
6,
ca
rd-
bas
ed
pa
ym
en
ts
rep
res
en
ted
56
%
of
tra
ns
ac
tio
n
vo
lum
e
Co
mb
ine
d C
ard
Vo
lum
es
Co
mb
ine
d C
ard
Va
lue
s
CA
RD
45%
EF
T C
RE
DIT
19
%
AE
DO
0%
EF
T D
EB
IT1
5%
CL
C2
%
NA
ED
O5
%
RT
C0
%
AT
M1
4%
VO
LU
ME
S2
01
0C
AR
D60%
EF
T C
RE
DIT
13
%
AE
DO
1%
EF
T D
EB
IT1
0%
CL
C0
%
NA
ED
O4
%
RT
C1
%
AT
M11
%
VO
LU
ME
S2
01
7
MILLIONS (RANDS)
MILLIONS (TRANSACTIONS)
CA
GR
CA
GR
11
GR
OW
TH
ST
RA
TE
GY
RE
MA
INS
UN
CH
AN
GE
D
•C
ontin
ue
to g
row
PO
S d
evic
e e
state
•E
xist
ing c
lien
ts
•N
ew
clie
nts
•N
ew
ap
plic
atio
ns
•D
eplo
ymen
t o
f ne
w p
latform
s a
cro
ss
est
ate
s
•In
troductio
n o
f ne
w p
rodu
cts
PA
YM
EN
TS
& P
AY
ME
NT
IN
FR
AS
TR
UC
TU
RE
SO
FT
WA
RE
&
SE
RV
ICE
S
•Lic
en
sin
g o
f so
ftw
are
ap
plic
atio
ns
for
reg
ula
tory
com
plia
nce
•C
lou
d m
igra
tion o
pp
ort
unitie
s co
ntin
ue
to a
ccele
rate
•In
tern
atio
na
l exp
ansi
on
of se
rvic
e
offerin
gs
•N
ew
tech
no
logy
de
plo
ymen
ts
(blo
ckch
ain
, AI, e
tc.)
ORGANIC GROWTH ACQUISITIONS
•P
urs
ue a
ttra
ctiv
e in
vestm
ent an
d a
cqu
isitio
n o
ppo
rtunitie
s in
Paym
en
ts &
Paym
en
t In
frast
ructu
re s
ect
or
in S
outh
Afr
ica, A
fric
a a
nd
oth
er
inte
rnatio
na
l
mark
ets
that (i
) exp
and
ou
r ca
pab
ilitie
s, (
ii) e
xpa
nd
ou
r m
ark
et oppo
rtunity,
and
(iii)
bu
ild o
n o
ur
busin
ess m
od
els
•P
urs
ue a
ttra
ctiv
e a
cq
uis
itio
n o
pp
ort
unitie
s in
Softw
are
& S
erv
ice
s se
ctor
in
South
Afr
ica
No
twit
hsta
nd
ing
th
e d
iffi
cu
lt e
co
no
mic
en
vir
on
men
t an
d t
he p
oliti
cal
ch
allen
ges i
n
So
uth
Afr
ica,
Cap
ital A
pp
recia
tio
n i
s w
ell c
ap
italised
, w
ith
th
e m
an
ag
em
en
t skills
an
d
tech
no
log
y t
o d
rive i
ts g
row
th s
trate
gy
Dis
cip
lin
ed
Deli
bera
te
Co
nsid
ere
d
Fo
cu
s o
n v
alu
e
an
d s
trate
gic
ali
gn
men
t
Capital Appreciation Limited Unaudited interim condensed consolidated financial results12
AB
OU
T O
UR
INV
ES
TM
EN
TS
13
CO
NS
IST
EN
T E
XE
CU
TIO
N S
TR
AT
EG
Y
Work
with
fin
anci
al in
stitu
tions
PA
RT
NE
RIN
NO
VA
TE
EX
EC
UT
E
Cre
ate
eco
syst
em
s fo
r
colla
bora
tion
B2B
2C
Deliv
er
solu
tions
to h
elp
clie
nts
realis
e t
heir s
trate
gy
Focu
s on in
frast
ruct
ure
Sta
te o
f th
e a
rt p
roprieta
ry
tech
nolo
gy
pla
tform
s fo
r se
rvic
es
Entr
epre
neurial cu
lture
Hard
ware
agnost
ic
Inte
gra
te s
eam
less
ly w
ith
legacy
sys
tem
s
Serv
ice e
xcelle
nce
Alle
viate
pain
poin
ts
Use
r exp
erience
Cre
ate
eco
syst
em
Engender
trust
Add v
alu
e
Gro
w m
ark
et
Act
as
an innova
tion
cata
lyst
for
clie
nts
B2B
Str
ate
gy h
as d
elivere
d s
ub
sta
nti
al
gro
wth
over
last
18 m
on
ths a
nd
ou
r o
bje
cti
ves r
em
ain
u
nch
an
ged
sin
ce i
nit
ially f
orm
ula
ted
Capital Appreciation Limited Unaudited interim condensed consolidated financial results14
PA
YM
EN
TS
& P
AY
ME
NT
IN
FR
AS
TR
UC
TU
RE
SE
GM
EN
T
BL
UE
CH
IPC
LIE
NT
S
Pro
vide a
nd o
pera
te
paym
ent
and
pro
cess
ing s
olu
tions
for
leadin
g b
rands
and I
nte
rnatio
nal
Banks
PR
OP
RIE
TA
RY
PL
AT
FO
RM
Uniq
ue, pro
prieta
ry
tech
nolo
gy
pla
tform
enablin
g r
apid
deve
lopm
ent
and
imple
menta
tion o
f
cust
om
ised c
orp
ora
te
solu
tions
acr
oss
a d
ivers
e
range o
f se
ctors
EN
D-T
O-E
ND
S
OL
UT
ION
S
Desi
gn,
deve
lop,
imple
ment and
manage innova
tive,
end-t
o-e
nd s
olu
tions
there
by
enhanci
ng a
nd
stre
ngth
enin
g t
he
rela
tionsh
ips
betw
een
banks
, co
rpora
tes
and
their c
lients
CO
MP
RE
HE
NS
IVE
O
FF
ER
ING
S
Ava
ilable
on a
turn
-key
all-
incl
usi
ve b
asi
s or
à la
cart
e
UN
IVE
RS
AL
AC
QU
IRIN
G
Pio
neer
of “U
niv
ers
al
Acq
uirin
g”
by
support
ing o
ne
unifo
rm infr
ast
ruct
ure
for
financi
al and
non‐f
inanci
al
transa
ctio
ns
Afr
ica
n R
es
on
an
ce
& D
as
hp
ay
Ma
na
ge
s P
OS
te
rmin
al e
sta
tes
at
sc
ale
En
ab
les
ba
nk
s a
nd
co
rpo
rate
s t
o e
xtr
ac
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15
PA
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CT
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Un
lim
ited
Capital Appreciation Limited Unaudited interim condensed consolidated financial results16
DA
SH
PA
Y –
INN
OV
AT
ION
IN
PR
OC
ES
SIN
GC
rea
tin
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-pro
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24
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ND
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ica, o
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ST
RA
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M
17
ST
RA
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PL
EM
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ite
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Capital Appreciation Limited Unaudited interim condensed consolidated financial results18
DA
SH
PA
Y C
OM
PL
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EN
TS
BA
NK
AC
QU
IRIN
G S
ER
VIC
ES
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MARKET PRESSUREPARTNERS WITH EXISTING BANKS
19
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Capital Appreciation Limited Unaudited interim condensed consolidated financial results20
DA
SH
PA
Y IN
TH
E E
NT
ER
PR
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–A
TTA
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US
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AS
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21
DA
SH
PA
Y IN
TH
E E
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ISE
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TTA
CQ
US
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AS
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Att
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nte
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Capital Appreciation Limited Unaudited interim condensed consolidated financial results22
DIG
ITA
L S
TA
MP
–U
SE
CA
SE
Data
sc
ien
ce
me
ets
c
on
su
me
r e
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ts t
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Dig
ita
l S
tam
p C
ard
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luti
on
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pp
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by a
co
nte
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ric
h m
ob
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ap
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ca
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•R
ob
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sim
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use
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me
nt a
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nt
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cre
ase
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r o
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sto
me
rs,
en
cou
rag
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th
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to
sp
en
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mo
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ore
oft
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rom
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s a
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llin
ate
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offe
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latf
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con
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t a
s te
nd
er
ILLY BIG BLUE
HARLEY-DAVIDSON LAVAZZA
23
LE
GA
CY
LIF
ES
TY
LE
–U
SE
CA
SE
Das
hp
ay
pro
vid
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he
Le
ga
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p w
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nic
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tom
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on
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sett
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TA
TS
Over
270 B
ran
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Part
ners
4 h
ote
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rou
ps
Op
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g i
n
5 c
ou
ntr
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870 0
00 m
em
bers
Capital Appreciation Limited Unaudited interim condensed consolidated financial results24
SO
FT
WA
RE
& S
ER
VIC
ES
SE
GM
EN
T –
SY
NT
HE
SIS
BL
UE
-CH
IP C
LIE
NT
S
Absa
, In
vest
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Sta
ndard
Bank,
HS
BC
,
Nedbank
CIB
, C
itibank,
RM
B, C
apite
c,
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riand o
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Lead
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pro
vid
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of
tech
no
log
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rod
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an
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in t
he f
inan
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ustr
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CL
IEN
T C
EN
TR
IC
Deliv
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he h
ighest
busi
ness
valu
e
with
a s
trong s
erv
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thic
TH
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GH
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EA
DE
RS
Acq
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are
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lopm
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skill
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CU
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Exc
lusi
ve f
ocu
s in
the fin
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sect
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PE
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RA
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LA
TIO
NS
HIP
S
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ith A
mazo
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AW
S, th
e top r
ate
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of cl
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serv
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glo
bally
25
OP
ER
AT
ING
UN
ITS
WIT
HIN
SY
NT
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SIS
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ransf
orm
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arn
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st
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S A
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Co
nsu
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CO
NS
ULT
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Deliv
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ser
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poin
ts for
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itutio
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while
main
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and t
ransa
ctio
nal in
tegrity
DIG
ITA
L
CH
AN
NE
LS
Inte
gra
tion t
o e
nable
regula
tory
report
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olu
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for
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RS
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bala
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P
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Art
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nte
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ce, b
lock
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in,
ma
ch
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arn
ing
Capital Appreciation Limited Unaudited interim condensed consolidated financial results26
AR
TIF
ICIA
L IN
TE
LL
IGE
NC
E A
ND
MA
CH
INE
LE
AR
NIN
G –
AB
SA
US
E C
AS
E
KE
Y M
ET
RIC
S
Wh
en
Ba
rcla
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Afr
ica
an
no
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ce
d its
w
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dra
wa
l, A
bs
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p n
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luti
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tify
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00
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arc
lays
Afr
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ns
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lays
Afr
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that
needed t
o b
e
identif
ied a
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5 0
00
Docu
ments
that ca
n
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naly
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min
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com
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scan a
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f th
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Barc
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ica lo
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cans
8
Weeks
that it
took
Syn
thesi
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deve
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WS
pla
tform
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ine learn
ing
tool c
an b
e
reuse
d f
or
tone
and s
entim
ent
analy
sis
goin
g
forw
ard
27
AR
TIF
ICIA
L IN
TE
LL
IGE
NC
E A
ND
MA
CH
INE
LE
AR
NIN
G –
AB
SA
US
E C
AS
E
In J
un
e 2
01
7, w
e w
ere
giv
en
12
mo
nth
s t
o r
em
ove a
ll B
arc
lays b
ran
d a
nd
lo
go
refe
ren
ces in
So
uth
Afr
ica. It
was
a m
as
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roje
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By t
he e
nd
of
20
17
, w
e h
ad
id
en
tifi
ed
40
00
0 a
rtefa
cts
th
at
need
ed
to
ch
an
ge a
cro
ss
300
syste
ms
. T
he S
yn
thes
is t
ea
m u
nd
ers
too
d q
uic
kly
wh
at
need
ed
to
be d
on
e.
AW
S p
rovid
ed
th
e in
gre
die
nts
, S
yn
thes
is h
elp
ed
us c
reate
th
e r
ec
ipe a
nd
pu
t it
to
geth
er.
Th
is s
olu
tio
n a
llo
wed
us t
o c
om
ple
te t
he b
ran
d a
ud
it f
or
So
uth
A
fric
a b
y t
he e
nd
-of-
Ju
ne d
ea
dlin
e, an
d h
as
th
e p
ote
nti
al to
ad
d g
rea
t valu
e
to t
he b
ran
d in
fu
ture
.
Cra
ig d
u T
oit
, B
ran
d T
ec
hn
olo
gy L
ead
, fo
r A
bsa
“
”
Capital Appreciation Limited Unaudited interim condensed consolidated financial results28
RE
VO
LU
TIO
NIS
ING
FA
RM
ING
–A
FG
RI U
SE
CA
SE
Syn
the
sis
bu
ilt
an
om
ni-
ch
an
ne
l d
igit
al p
latf
orm
fo
r A
FG
RI, a
le
ad
ing
a
gri
cu
ltu
ral
se
rvic
es
c
om
pa
ny,
to
en
ha
nc
e t
he
w
ay
fa
rme
rs a
dm
inis
ter
an
d m
an
ag
e t
he
ir e
nti
re
farm
ing
op
era
tio
ns
SIN
GL
E
DA
SH
BO
AR
DD
IGIT
AL
B
AN
KIN
GL
OA
N
AP
PL
ICA
TIO
N
MO
NIT
OR
R
AIN
FA
LL
GR
AIN
P
RIC
ES
MA
NA
GE
S
TO
CK
INS
UR
AN
CE
RE
AL
-TIM
E
MO
NIT
OR
ING
SECURE, EASY-TO-USE BANKING AND MANAGEMENT PLATFORM
Tra
ns
ac
tio
n v
alu
e m
ore
th
an
tri
ple
d in
th
e s
ec
on
d y
ea
r o
f la
un
ch
29
FIN
AN
CIA
LP
ER
FO
RM
AN
CE
Capital Appreciation Limited Unaudited interim condensed consolidated financial results30
FIN
AN
CIA
L P
ER
FO
RM
AN
CE
Pa
ym
en
ts &
Pa
ym
en
t In
fra
str
uc
ture
Div
isio
n
44.2
140.7
196.1
202.9
415.1
164.2
253.6
9.4
24.9
42.1
77.5
151.7
54.8
70.0
1.1
10.6
22.7
60.9
149.5
51.7
66.8
0
50
100
150
200
250
300
350
400
450
FY
'14
FY
'15
FY
'16
FY
'17
FY
'18
30 S
ep '1
730 S
ep '1
8
Reve
nue
EB
ITD
AO
pera
ting P
rofit
CA
GR
Reve
nu
e6
3%
EB
ITD
A7
2%
PE
RIO
D G
RO
WT
H
Reve
nu
e5
4%
EB
ITD
A2
8%
Op
era
tin
g p
rofit
29
%
31
TE
RM
INA
L E
STA
TE
AN
ALY
SIS
Te
rmin
als
at
pe
rio
d e
nd
32
00
0
48
00
0
76
00
0
10
3 0
00
Ap
r 17
Se
p 1
7M
ar
18
Se
p 1
8
OW
NE
D B
Y C
LIE
NT
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CT
IVE
–IN
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RK
ET
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AIT
ING
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PL
OY
ME
NT
32
00
04
0 0
00
53
00
0
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r 17
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p 1
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ar
18
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8
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00
02
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00
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r 17
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p 1
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ar
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Se
p 1
8
•N
um
be
r o
f te
rmin
als
d
eliv
ere
d to
clie
nts
gre
w
by 3
6%
in p
eri
od
•P
aid
fo
r a
t tim
e o
f d
eliv
ery
•S
tart
to
ge
ne
rate
re
curr
ing
re
ve
nu
e o
nce
a
ctiv
ate
d
•N
um
be
r o
f te
rmin
als
in
use
gre
w b
y 4
5%
in
p
erio
d
•In
clu
de
s c.
15
00
0
term
ina
ls s
ub
ject
to
re
nta
l co
ntr
act
with
A
fric
an
Re
son
an
ce
•R
en
tals
ma
y b
e r
en
ew
ed
u
po
n e
xpir
y o
r re
pla
ced
w
ith o
wn
ed
te
rmin
als
•N
ew
te
rmin
als
, o
nce
im
po
rte
d,
are
pre
pa
red
fo
r clie
nt
an
d r
ea
die
d fo
r d
ep
loym
en
t
•R
ep
rese
nts
pro
sp
ective
re
cu
rrin
g r
eve
nu
e o
nce
a
ctiva
ted
•In
clu
de
s ”
rota
tin
g s
tock”
for
ba
cku
p a
nd
re
pla
ce
me
nt
Capital Appreciation Limited Unaudited interim condensed consolidated financial results32
FIN
AN
CIA
L P
ER
FO
RM
AN
CE
So
ftw
are
& S
erv
ice
s D
ivis
ion
41.6
46.1
51.9
77.6
93.1
37.6
61.8
12.6
15.9
19.8
29.9
33.9
10.8
18.4
12.4
15.6
19.4
29.4
33.2
10.6
18.1
0
10
20
30
40
50
60
70
80
90
100
FY
'14
FY
'15
FY
'16
FY
'17
FY
'18
30 S
ep '1
730 S
ep '1
8
Gro
ss
Reve
nue
EB
ITD
AO
pera
ting P
rofit
CA
GR
Reve
nu
e2
4%
EB
ITD
A2
4%
PE
RIO
D G
RO
WT
H
Reve
nu
e6
4%
EB
ITD
A7
0%
Op
era
tin
g p
rofit
71
%
EB
ITD
A a
nd
Op
era
tin
g P
rofi
t is
a
fte
r e
xp
en
sin
g a
dd
itio
nal
ram
p-
up
co
sts
re
late
d t
o A
WS
Clo
ud
M
igra
tio
n p
roje
cts
, th
e b
en
efi
ts
of
wh
ich
will a
cc
rue
in
s
ub
se
qu
en
t p
eri
od
s
Th
e b
en
efi
t o
f la
st
ye
ar’
s
ex
pe
nd
itu
res
is
vis
ible
in
th
is
ye
ar’
s g
row
th
33
GR
OU
P S
UM
MA
RIS
ED
STA
TE
ME
NT
OF
CO
MP
RE
HE
NS
IVE
IN
CO
ME
(R m
illi
on
)3
0 S
ep
20
18
30
Se
p 2
01
7%
incr
ea
se
Re
ve
nu
e3
15
.42
01
.85
6%
EB
ITD
A8
1.4
65
.52
4%
Tra
din
g p
rofit
82
.86
6.0
25
%
Ne
t fin
an
ce
inco
me
17
.42
1.5
(19
%)
Pro
fit
be
fore
ta
xa
tio
n8
8.4
78
.21
3%
Pro
fit
aft
er
tax
63
.35
6.2
13
%
No
rma
lise
d p
rofit a
fte
r ta
x6
8.2
60
.11
3%
He
ad
line
ea
rnin
gs p
er
sh
are
(c
en
ts)
4.2
33
.75
13
%
No
rma
lise
d h
ea
dlin
e e
arn
ing
s
pe
r sh
are
(ce
nts
)4
.55
4.0
21
3%
Ca
sh
ea
rnin
gs p
er
sh
are
(ce
nts
)4
.60
1.2
22
77
%
Nu
mb
er
of sh
are
s in
issu
e
(mill
ion
s)
1 5
55
.01
55
5.0
We
igh
ted
ave
rag
e n
um
be
r o
f sh
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s in
issu
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mill
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s)
1 4
97
.71
49
5.9
Nu
mb
er
of sh
are
s in
issu
e, n
et o
f tr
ea
su
ry s
ha
res (
mill
ion
s)
1 4
94
.71
53
0.0
Inclu
des c
.R20m
of
incre
men
tal cap
acit
y a
nd
su
pp
ort
-rela
ted
exp
en
dit
ure
, o
f w
hic
h
R13m
is lab
ou
r-re
late
d
Aft
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al
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ort
isati
on
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ng
ible
s
ari
sin
g f
rom
acq
uis
itio
ns
Lo
wer
inte
rest
inco
me
giv
en
cash
used
fo
r acq
uis
itio
ns a
nd
sh
are
re
pu
rch
ases
Inclu
des R
1.2
m d
efi
cit
,
aft
er
tax, att
rib
uta
ble
to
R
eso
nan
ce A
ustr
alia
Pu
rch
ased
4.6
8m
tre
asu
ry
sh
are
sTo
tal n
um
ber
of
treasu
ry
sh
are
s is 6
0.3
m
Mate
rial n
eg
ati
ve w
ork
ing
cap
ital
mo
vem
en
t in
m
on
th o
f S
ep
t 2017
Capital Appreciation Limited Unaudited interim condensed consolidated financial results34
DIV
ISIO
NA
L R
EV
EN
UE
CO
MP
OS
ITIO
N
(R m
illio
n)
30 S
EP
‘18
30 S
EP
‘17
Gro
wth
Paym
en
ts &
Paym
en
t In
frastr
uctu
re d
ivis
ion
Renta
l in
com
e44.8
44.3
1.1
%
Main
tenance
and s
upport
serv
ice fees
28.6
20.1
42.1
%
Sale
of te
rmin
als
165.7
88.6
87.0
%
Tra
nsa
ctio
n f
ees
7.4
5.1
45.1
%
Oth
er
reve
nue
7.1
6.1
16.4
%
Tota
l253.6
164.2
54.4
%
So
ftw
are
& S
erv
ices d
ivis
ion
Serv
ices
and c
onsu
ltancy
fees
45.9
29.8
54.0
%
Lic
ence
and s
ubsc
riptio
n f
ees
14.0
5.3
164.2
%
Hard
ware
1.9
2.3
(17.4
%)
Oth
er
turn
ove
r0.0
0.2
NM
Tota
l61.8
37.6
64.4
%
To
tal re
ven
ue
315.4
201.8
56.3
%
Geo
gra
ph
ic r
eg
ion
South
Afr
ica
307.4
196.2
56.7
%
Rest
of A
fric
a a
nd India
n O
cean I
slands
8.0
5.6
42.9
%
To
tal re
ven
ue
315.4
201.8
56.3
%
Re
cu
rrin
g i
nc
om
e r
ep
res
en
ts a
pp
rox
ima
tely
48
% o
f to
tal
reve
nu
e i
n 2
01
8 (
20
17
: 5
6%
)
35
CO
ND
EN
SE
D G
RO
UP
STA
TE
ME
NT
OF
FIN
AN
CIA
L P
OS
ITIO
N
AT
30 S
EP
TE
MB
ER
2018
(R m
illio
n)
30 S
ep
2018
30 S
ep
2017
31 M
ar
2018
AS
SE
TS
Goodw
ill728.6
728.6
728.6
Inta
ngib
le a
ssets
66.7
78.2
71.5
Oth
er
non-c
urr
ent
ass
ets
71.0
72.1
64.3
Non- c
urr
ent ass
ets
866.3
878.9
864.4
Cash
and c
ash
equiv
ale
nts
551.5
463.5
513.2
Oth
er
curr
ent ass
ets
124.0
98.9
94.1
To
tal assets
1 5
41.8
1 4
41.3
1 4
71.7
EQ
UIT
Y A
ND
LIA
BIL
ITIE
S
Equity
1 4
21.4
1 3
58.2
1 3
92.3
Non- c
urr
ent lia
bili
ties
33.4
38.3
35.7
Curr
ent
liabili
ties
87.0
44.8
43.7
To
tal eq
uit
y a
nd
lia
bilit
ies
1 5
41.8
1 4
41.3
1 4
71.7
NA
V p
er
share
(ce
nts
)95.1
88.8
92.9
Cash
ava
ilable
per
share
(ce
nts
)36.9
30.3
34.2
Held
fo
r in
vestm
en
t in
in
tere
st-
beari
ng
call a
nd
n
oti
ce d
ep
osit
acco
un
ts
Capital Appreciation Limited Unaudited interim condensed consolidated financial results36
CA
SH
FL
OW
(K
EY
FE
AT
UR
ES
)
(R m
illi
on
)30 S
ep
‘18
30
Se
p ‘
17
Ca
sh
flo
w f
rom
op
era
tio
ns
92
.4
40
.6
Ch
an
ge
s in
wo
rkin
g c
ap
ita
l9
.8
(25
.4)
Acq
uis
itio
n o
f p
rop
ert
y, p
lan
t a
nd
eq
uip
me
nt
(8.3
) (5
.1)
Acq
uis
itio
n o
f su
bsid
iari
es n
et o
f ca
sh
acq
uir
ed
-(5
53
.0)
Acq
uis
itio
n o
f a
sso
cia
te-
(30
.5)
Pu
rch
ase
of
tre
asu
ry s
ha
res
(4.5
) (1
8.8
)
Re
pa
yme
nt
of lo
an
s(4
.4)
(16
.1)
Div
ide
nd
s p
aid
(30
.0)
-
Ca
sh
& c
ash
eq
uiv
ale
nts
at
pe
rio
d e
nd
55
1.5
46
3.1
Cash
co
nvers
ion
rati
o o
f 11
2%
of
trad
ing
pro
fit
37
PR
OS
PE
CT
S
Capital Appreciation Limited Unaudited interim condensed consolidated financial results38
A
cce
lera
ted
gro
wth
in
PO
S d
evic
e
est
ate
as
pe
ne
tra
tion
incr
ea
ses
in
ba
nki
ng
as
we
ll a
s S
ME
se
cto
r
In
tro
du
ctio
n o
f n
ew
pla
tfo
rms
will
g
en
era
te n
ew
gro
wth
N
ew
pro
du
ct p
ipe
line
PA
YM
EN
TS
& P
AY
ME
NT
IN
FR
AS
TR
UC
TU
RE
SO
FT
WA
RE
& S
ER
VIC
ES
R
eg
ula
tory
co
mp
lian
ce
re
qu
ire
me
nts
S
tro
ng
an
d g
row
ing
ad
op
tio
n o
f clo
ud
-b
ase
d s
olu
tio
ns
F
urt
he
r in
tern
atio
na
l e
xpa
nsio
n,
esp
ecia
lly A
fric
an
hu
b
S
ign
ific
an
t o
pp
ort
un
ity
in n
ew
te
ch
no
log
ies
•A
bro
ad
ra
ng
e o
f o
rga
nic
as
we
ll a
s a
cqu
isitiv
e g
row
th o
pp
ort
un
itie
s a
va
ilab
le to
CA
PP
RE
C
•A
cqu
isiti
ve
act
ivity
will
de
pe
nd
on
str
ate
gic
fit
as
we
ll a
s va
lua
tion
s
•P
olit
ica
l en
viro
nm
en
t a
nd
eco
no
mic
clim
ate
are
imp
act
ing
ou
r cl
ien
ts a
nd
re
ma
in p
rese
nt in
ou
r p
lan
nin
gGROWTH OPPORTUNITIES
PR
OS
PE
CT
SC
ap
ita
l A
pp
rec
iati
on
is
well c
ap
ita
lis
ed
, w
ith
th
e m
an
ag
em
en
t s
kills
an
d
tec
hn
olo
gy t
o d
rive
it’
s g
row
th s
tra
teg
y
39
OU
R IN
VE
ST
ME
NT
CA
SE
•W
ell-
positio
ned in
an in
dustr
y w
ith h
ealthy
org
anic
gro
wth
pro
spects
•A
tru
sted p
art
ner
to a
str
ong n
etw
ork
of la
rge fin
ancia
l in
stit
utions
•C
lients
are
well
capitalis
ed a
nd e
sta
blis
hed
•C
lients
alr
eady
have a
pre
sence in A
fric
a –
pro
vidin
g the p
ote
ntial abili
ty for
CA
PP
RE
C to e
xpand
regio
nally
with
them
•F
ounders
with
a v
ery
str
ong n
etw
ork
of re
lationship
s o
n w
hic
h to b
uild
futu
re b
usin
ess
•W
ell-
esta
blis
hed F
inTe
ch s
ubsid
iaries w
ith s
trong t
rack
reco
rds
•In
no
va
tion
•Q
ua
lity
exe
cutio
n
•F
ina
nci
al p
erf
orm
an
ce
•S
ubsid
iaries h
ave s
trong o
rganic
gro
wth
pro
spects
and a
cquis
itio
n o
pport
uniti
es
•S
trong G
roup b
ala
nce s
heet w
ith a
dequate
headro
om
for
org
anic
and a
cquis
itiv
e g
row
th
•S
ubsid
iaries a
re h
ighly
cash g
enera
tive w
ith c
ash c
onvers
ion e
xce
edin
g 1
00%
•O
ur
pro
duct
s a
nd s
erv
ices a
re t
arg
ete
d a
t m
issio
n-c
ritica
l applic
ations
Capital Appreciation Limited Unaudited interim condensed consolidated financial results40
TH
AN
K
YO
U
41
AN
NE
XU
RE
Capital Appreciation Limited Unaudited interim condensed consolidated financial results42
CO
MP
AR
AB
LE
IN
TE
RN
AT
ION
AL
CO
MP
AN
IES
Illu
str
ati
ve o
f b
read
th a
nd
dep
th o
f in
tern
ati
on
al
“Paym
en
ts” m
ark
etp
lace
NE
TW
OR
KS
EM
ER
GIN
G P
AY
ME
NT
SM
ER
CH
AN
T A
CQ
UIR
OR
SP
OS
/ C
AS
H
DIS
BU
RS
EM
EN
T
$32
4 6
96
//
22.8
x
$22
0 1
39
//
24.5
x
$18
812
// 11.9
x
$7 5
69 //
17.0
x
$7 9
96 //
7.8
x
$18
202
// 1
6.7
x
$2 1
45 //
12.5
x
$40
4 //
NA
$17
140
// 1
5.1
x
$28
743
// 1
9.4
x
$10
7 6
06
//
25.0
x
$80
2 //
5.9
x
$35
082
// N
M
$37
2 //
40.2
x
$21
968
// 3
5.1
x
$54
1 //
8.7
x
$21
007
// N
M
$4 7
82 //
11.0
x
$72
7 //
8.2
x
$1 6
87 //
8.9
x
$28
4 //
18.3
x
MA
RK
ET
CA
PIT
AL
ISA
TIO
N (
IN U
S $
MIL
LIO
NS
) // C
Y1
8E
EV
/EB
ITD
A A
S O
F 0
8 N
OV
EM
BE
R 2
01
8
$6 1
13 //
13.4
x
En
terp
rise
Va
lue
=
c.2
1.2
x F
Y1
8 R
ev
Yo
Y R
ev
gro
wth
= 5
7%
$2 1
69 //
18.3
x$59
9 //
22.7
x
$2 5
74 //
NM
43
PA
YM
EN
TS
& P
AY
ME
NT
IN
FR
AS
TR
UC
TU
RE
His
tori
ca
l p
erf
orm
an
ce
(R m
illio
n)
2014
2015
2016
2017
2018
30 S
EP
‘17
30 S
EP
‘18
CA
GR
’14 –
‘19
Revenue
44.2
140.7
196.1
202.9
415.1
164.2
253.6
63%
EBITDA
9.4
24.9
42.1
77.5
151.7
54.8
70.0
72%
Marg
in
EBITDA
21.3%
17.7%
21.5%
38.2%
36.5%
33.3%
27.6%
Gro
wth
Revenue
218.3%
39.4%
3.5%
104.6%
54.4%
EBITDA
164.9%
69.1%
84.1%
96.1%
27.7%
Capital Appreciation Limited Unaudited interim condensed consolidated financial results44
SO
FT
WA
RE
& S
ER
VIC
ES
His
tori
cal p
erf
orm
an
ce
(R m
illio
n)
2014
2015
2016
2017
2018
30 S
EP
‘17
30 S
EP
‘18
CA
GR
‘1
4 –
‘19
Revenue
41.6
46.1
51.9
77.6
93.1
37.6
61.8
24%
EBITDA
12.6
15.9
19.8
29.9
33.9
10.8
18.4
24%
Marg
in
EBITDA
30.3%
34.5%
38.2%
38.5%
36.4%
28.7%
29.7%
Gro
wth
Revenue
10.8%
12.6%
49.5%
20.0%
64.4%
EBITDA
26.2%
24.5%
51.0%
12.4%
70.3%
45
PA
YM
EN
TS
SO
LU
TIO
NS
RA
NG
E A
CR
OS
S
IND
US
TR
Y A
ND
FU
NC
TIO
NA
L A
RE
A
•B
ank
acquirin
g
•C
lose
paym
ent
syst
em
s
•A
gency
banki
ng
•M
icro
finance
FIN
AN
CIA
L
•R
eta
il m
anagem
ent
•S
tore
-in-a
-sto
re
solu
tions
•D
istr
ibution /
SC
M
•G
ift and p
repaid
card
s
•P
OS
inte
gra
tion
RE
TA
IL
•C
onsu
mer
pro
filin
g
•C
onsu
mer
data
base
managem
ent
•V
oucher
cam
paig
ns
•E
vent m
anagem
ent
MA
RK
ET
ING
•S
oci
al gra
nts
•H
ealth b
enefit
dis
trib
utio
n
•F
ood c
oupons
•M
edic
al cl
aim
s
PU
BL
IC
•C
ust
om
ised p
aym
ent
solu
tions
•Larg
e s
cale
loya
lty
pro
gra
ms
•S
oci
al re
sponsi
bili
ty
•S
hort
-term
insu
rance
•R
eco
nci
liation a
nd
report
ing
CO
RP
OR
AT
E
Capital Appreciation Limited Unaudited interim condensed consolidated financial results46
GL
OS
SA
RY
AE
DO
Auth
entic
ate
d e
arly
debit
ord
er
AI
Art
ificia
l in
telli
gence
AT
MA
uto
mate
d t
elle
r m
ach
ine
AW
S
Am
azo
n W
eb S
erv
ices
B2B
B
usi
ness
to b
usi
ness
B2B
2C
Busi
ness
to b
usi
ness
to c
onsu
mer
B-B
BE
EB
road-B
ase
d B
lack
Eco
nom
ic E
mpow
erm
ent
Bn
Bill
ion
CA
GR
Com
pound a
nnual gro
wth
rate
CA
PP
RE
C
Capita
l Appre
ciatio
n L
imite
d
Cash
EP
SC
ash
flo
w f
rom
opera
tions,
less
taxation p
aid
, div
ided b
y w
eig
hte
d a
vera
ge n
um
ber
of share
s in
issu
e
CL
CC
ode lin
e c
learing
CR
MC
ust
om
er
rela
tionsh
ip m
anagem
ent
EB
ITE
arn
ings b
efo
re inte
rest
and tax
EB
ITD
AE
arn
ings b
efo
re inte
rest
, ta
x, d
epre
ciatio
n a
nd a
mort
isation
EF
TE
lect
ronic
fund tra
nsfe
r
EM
VE
uro
pay,
Maste
rcard
, V
isa
EP
SE
arn
ings
per
share
Fin
Tech
F
inancia
l te
chnolo
gy
FY
Fis
cal ye
ar
GT
VG
ross
tra
nsa
ctio
n v
alu
e
HE
PS
H
eadlin
e e
arn
ings p
er
share
ISO
Independent
sale
org
anis
atio
n
IT
Info
rmation t
ech
nolo
gy
MM
illio
n
NA
Not ava
ilable
NA
ED
ON
on-a
uth
entica
ted e
arly
debit o
rder
NA
V
Net ass
et va
lue
NF
CN
ear
field
com
munic
atio
n
NH
EP
S
Norm
alis
ed h
eadlin
e e
arn
ings
per
share
NM
Not m
eanin
gfu
l
PO
SP
oin
t of sa
le
R
Rand
R&
D
Rese
arc
h a
nd d
eve
lopm
ent
RE
IT
Real E
state
Inve
stm
ent T
rust
RT
CR
equest
to c
redit
SA
South
Afr
ica
SA
RB
South
Afr
ican R
ese
rve B
ank
SA
RS
South
Afr
ican R
eve
nue S
erv
ices
SM
ES
mall
and m
ediu
m e
nte
rprise
Tx
Tra
nsa
ctio
n
US
$U
nited S
tate
s D
olla
r
ZA
RS
outh
Afr
ican R
ands
47
Fo
r th
e p
urp
ose
s o
f th
is n
otic
e,
this
pre
se
nta
tio
n (
the
“P
rese
nta
tio
n”)
sh
all
me
an
an
d in
clu
de
th
e p
ag
es a
nd
slid
es t
ha
t fo
llow
, its c
on
ten
ts
inclu
din
g th
e in
form
atio
n f
orm
ing
pa
rt t
he
reo
f o
r re
ferr
ed
to
in
th
e
Pre
sen
tatio
n,
the
ora
l p
rese
nta
tio
n o
f th
e p
ag
es
an
d s
lide
s b
y
Ca
pita
l Ap
pre
cia
tion
Lim
ited
("C
AP
PR
EC
") its
offic
ers
, d
ire
cto
rs,
em
plo
yee
s a
nd
/or
ad
vis
ers
, a
ny
qu
estio
n-a
nd
-an
sw
er
sess
ion
th
at
follo
ws
tha
t o
ral p
rese
nta
tio
n,
ha
rd c
op
ies o
f th
is d
ocu
me
nt
an
d a
ny
ma
teri
als
an
d/o
r in
form
atio
n (
in w
ha
teve
r fo
rm)
dis
trib
ute
d a
t, o
r in
co
nn
ectio
n w
ith
, th
at
ora
l p
rese
nta
tio
n.
By
att
en
din
g t
he
me
etin
g a
t
wh
ich
th
e P
rese
nta
tion
is
ma
de
, o
r b
y re
ad
ing
th
e P
rese
nta
tion
slid
es,
you
will
be
de
em
ed
to
ha
ve
(i)
ag
ree
d t
o a
ll o
f th
e f
ollo
win
g
rest
rictio
ns a
nd
ma
de
th
e f
ollo
win
g u
nd
ert
akin
gs;
an
d (
ii)
ack
no
wle
dg
ed
th
at
you
un
de
rsta
nd
th
e le
ga
l an
d r
eg
ula
tory
sa
nctio
ns
att
ach
ed
to
th
e m
isu
se,
dis
clo
sure
or
imp
rop
er
circu
latio
n
of
the
Pre
se
nta
tion
.
Th
is P
rese
nta
tion
is p
rovid
ed
to
yo
u s
ole
ly f
or
info
rma
tion
pu
rpo
ses
an
d d
oe
s n
ot
co
nst
itute
, a
nd
ma
y n
ot
be
re
lied
on
in
an
y m
an
ne
r a
s,
leg
al,
tax o
r in
ve
stm
en
t a
dvic
e a
nd
/or
an
in
ve
stm
en
t
reco
mm
en
da
tion
.
Th
is P
rese
nta
tion
is n
ot
dire
cte
d t
o,
or
inte
nd
ed
fo
r d
istr
ibu
tio
n t
o o
r
use
by,
an
y p
ers
on
or
en
tity
tha
t is
a c
itiz
en
or
resi
de
nt
of,
or
loca
ted
in,
an
y lo
ca
lity,
sta
te,
cou
ntr
y o
r o
the
r ju
risd
ictio
n w
he
re s
uch
dis
trib
utio
n o
r u
se
wo
uld
be
co
ntr
ary
to
la
w o
r re
gu
latio
n o
r w
hic
h
wo
uld
re
qu
ire
an
y a
ctio
n (
incl
ud
ing
re
gis
tra
tio
n o
r lic
en
sin
g)
with
in
su
ch
ju
risd
ictio
n f
or
such
pu
rpo
se
.
Th
is P
rese
nta
tion
is n
ot, a
nd
sh
ou
ld n
ot
be
co
nstr
ue
d s
o a
s t
o
co
nstit
ute
, a
n o
ffe
r o
f se
curi
tie
s f
or
sa
le o
r a
cqu
isiti
on
in
an
y
jurisd
ictio
n,
incl
ud
ing
in t
he
Un
ite
d S
tate
s, C
an
ad
a, A
ust
ralia
or
Ja
pa
n.
Th
is P
rese
nta
tio
n d
oe
s n
ot
con
stitu
te o
r fo
rm p
art
of,
an
d s
ho
uld
no
t
be
co
nst
rue
d a
s, a
n a
dve
rtis
em
en
t, in
vita
tio
n,
solic
ita
tio
n a
nd
/or
offe
r
to s
ell,
issu
e,
pu
rch
ase
or
sub
scrib
e f
or, a
ny
sha
res
an
d/o
r se
curitie
s
in a
ny
jurisd
ictio
n,
or
an
in
du
cem
en
t to
en
ter
into
in
ve
stm
en
t a
ctiv
ity.
Th
is P
rese
nta
tio
n d
oe
s n
ot
con
stitu
te a
n o
ffe
r to
th
e p
ub
lic f
or
the
sa
le o
f o
r su
bsc
rip
tio
n f
or, o
r a
n a
dve
rtis
em
en
t o
r th
e s
olic
ita
tio
n o
f
an
offe
r to
bu
y a
nd
/or
sub
scrib
e f
or, s
ecu
ritie
s a
s d
efin
ed
in
th
e
Co
mp
an
ies
Act
, 7
1 o
f 2
00
8 (
"th
e A
ct")
or
oth
erw
ise
an
d w
ill n
ot
be
dis
trib
ute
d t
o a
ny
pe
rso
n in
So
uth
Afr
ica
in
an
y m
an
ne
r w
hic
h c
ou
ld
be
co
nst
rue
d a
s a
n o
ffe
r to
th
e p
ub
lic in
te
rms
of
the
Act
.
Fu
rth
erm
ore
, th
is P
rese
nta
tio
n d
oe
s n
ot
con
stitu
te a
n a
dve
rtis
em
en
t
or
a p
rosp
ectu
s re
gis
tere
d a
nd
/or
issu
ed
un
de
r th
e A
ct.
Th
e in
form
atio
n c
on
tain
ed
he
rein
ha
s b
ee
n p
rep
are
d u
sin
g
info
rma
tio
n a
va
ilab
le to
CA
PP
RE
C a
t th
e t
ime
of
pre
pa
ratio
n o
f th
is
Pre
sen
tatio
n.
Exte
rna
l o
r o
the
r fa
cto
rs m
ay
ha
ve
im
pa
cte
d o
n t
he
bu
sin
ess o
f C
AP
PR
EC
an
d t
he
co
nte
nt
of
this
Pre
sen
tatio
n,
sin
ce its
pre
pa
ratio
n.
In a
dd
itio
n a
ll re
leva
nt
info
rma
tio
n a
bo
ut
CA
PP
RE
C m
ay
no
t b
e in
clu
de
d in
th
is P
rese
nta
tio
n.
Th
e in
form
atio
n in
th
is P
rese
nta
tio
n h
as
no
t b
ee
n in
de
pe
nd
en
tly
ve
rifie
d.
No
re
pre
sen
tatio
n o
r w
arr
an
ty,
exp
ress
ed
or
imp
lied
, is
ma
de
as t
o t
he
acc
ura
cy,
com
ple
ten
ess
or
relia
bili
ty o
f th
e
info
rma
tio
n c
on
tain
ed
he
rein
an
d n
o r
elia
nce
sh
ou
ld b
e p
lace
d o
n
su
ch
in
form
atio
n.
Ne
ithe
r C
AP
PR
EC
, its
offic
ers
, d
ire
cto
rs,
em
plo
yee
s n
or
an
y o
f its
ad
vis
ers
, co
nn
ect
ed
pe
rso
ns
or
an
y o
the
r p
ers
on
acc
ep
ts a
ny
liab
ility
fo
r a
ny
loss
ho
wso
eve
r a
risi
ng
, d
ire
ctly
or
ind
ire
ctly
, fr
om
th
is
Pre
sen
tatio
n o
r its
con
ten
ts.
Th
is P
rese
nta
tio
n c
on
tain
s fo
rwa
rd-lo
okin
g s
tate
me
nts
, in
clu
din
g in
rela
tio
n t
o t
he
pro
spe
cts
of
CA
PP
RE
C,
wh
ich
in
clu
de
all
sta
tem
en
ts
oth
er
tha
n s
tate
me
nts
of
his
torica
l fa
cts,
in
clu
din
g,
with
ou
t lim
ita
tio
n,
an
y st
ate
me
nts
pre
ced
ed
by,
fo
llow
ed
by
or
incl
ud
ing
th
e w
ord
s
“ta
rge
ts”,
“b
elie
ve
s”,
“exp
ect
s”,
“aim
s”,
“in
ten
ds”
, “m
ay”
, “a
ntici
pa
tes”
,
“wo
uld
”, “
cou
ld”
or
sim
ilar
exp
ress
ion
s o
r th
e n
eg
ative
th
ere
of.
Fo
rwa
rd-lo
okin
g s
tate
me
nts
by
the
ir n
atu
re in
vo
lve
kn
ow
n a
nd
un
kn
ow
n r
isks,
un
cert
ain
tie
s, a
ssu
mp
tio
ns
an
d o
the
r im
po
rta
nt
fact
ors
be
cau
se t
he
y re
late
to
eve
nts
an
d d
ep
en
d o
n c
ircu
mst
an
ces
tha
t m
igh
t o
ccu
r in
th
e f
utu
re w
he
the
r o
r n
ot
ou
tsid
e t
he
co
ntr
ol o
f
CA
PP
RE
C.
Su
ch f
act
ors
ma
y ca
use
act
ua
l re
sults,
pe
rfo
rma
nce
or
ach
ieve
me
nts
to
be
ma
teri
ally
diff
ere
nt
fro
m f
utu
re r
esu
lts,
pe
rfo
rma
nce
, d
eve
lop
me
nts
or
ach
ieve
me
nts
exp
ress
ed
or
imp
lied
by
such
fo
rwa
rd-l
oo
kin
g s
tate
me
nts
. S
uch
fo
rwa
rd-l
oo
kin
g
sta
tem
en
ts a
re b
ase
d o
n n
um
ero
us
ass
um
ptio
ns
reg
ard
ing
pre
sen
t
an
d f
utu
re b
usi
ne
ss s
tra
teg
ies,
pro
spe
cts
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Capital Appreciation Limited Unaudited interim condensed consolidated financial results48
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL RESULTS
CAPITAL APPRECIATIONLIMITED
for the six months ended 30 September 2018and cash dividend declaration
49
Capital Appreciation (“CAPPREC”) owns, manages, invests in, and promotes established and developing financial technology (“FinTech”) enterprises, their platforms, solutions, products and applications.
The Group has two business segments – Payments & Payment Infrastructure and Software & Services. African Resonance and Dashpay comprise the Payments segment and Synthesis comprises the Software segment.
Payments & Payment Infrastructure: African Resonance is a leading provider of payment infrastructure and related technology solutions to established financial institutions, emerging payment service providers, the hospitality industry and the entire retail sector, both directly and indirectly. Dashpay is positioned to provide innovative transaction processing services, solutions and products focused on B2B commercial and payment activity. The Dashpay solution set is intended to complement existing payment services provided by the Group’s established banking and institutional client base.
Software & Services: Synthesis is a highly specialised software and systems developer, offering consulting, integration services and technology-based product solutions, to banking and other financial institutions in South Africa and other emerging markets. Synthesis is uniquely positioned in Africa having become the first company on the continent to attain Amazon Web Services’ (“AWS”) Advanced Consulting Partner Accreditation, with specialist competencies in both Financial Services and Development Operations (“DevOps”).
International: Resonance Australia is an associate company investment in which CAPPREC owns 17.45%. Resonance Australia is still in its early stages of development and, when operational, will employ a business model similar to that which Dashpay operates in South Africa.
Further detail on the nature of these business units is available on the Company’s website at www.capitalappreciation.co.za.
About CAPPREC
Capital Appreciation Limited Unaudited interim condensed consolidated financial results50
Revenue R315.4 million
+56%EBITDA R81.4 million
+24%
Trading profit R82.8 million
+25%Headline earnings R63.3 million
+13%
Normalised HEPS
4.55 cents +13%EPS & HEPS
4.23 cents +13%
Interim dividend per share
2.25 cents + 12.5%R551.5 million cash available for reinvestment
Growth continues across all business units
Contracted with new
blue-chip clients
103 000 payment terminals owned by clients
+33%
Market share gains in “bank terminal market”
Cash generated from operations
R92.4 millionCash conversion rate
112% of trading profit
Salient FEATURES
51
INTRODUCTIONThe operating performance of the business units within the Group has once again been solid and consistent with expectations, this, notwithstanding the challenging economic environment in South Africa. These interim results once again demonstrate the strategic positioning and relevance of the Group’s products and services, as well as our clients’ recognition of CAPPREC as a respected partner.
Technology’s role as a key disruptor and differentiator in the financial services sector continues to accelerate, creating further opportunity for CAPPREC. The Group’s businesses have a long history of innovation and a good track record of responding to disruption and converting the resulting dislocation into viable commercial opportunity.
The Group’s clients now proudly include all major banking institutions in South Africa, including Absa, Capitec, FNB, Investec, Nedbank and Standard Bank, as well as many other banks, non-banking financial services companies and institutions.
Each of CAPPREC’s businesses has continued to make good progress in pursuit of their long-term strategic objective – to be a valued partner to, and recognised as an industry innovator by, established and emerging financial services companies in South Africa, across Africa and in other select jurisdictions CAPPREC elects to operate or invest in around the world.
OPERATING ENVIRONMENTShareholders and investors are cognisant of the general economic challenges and political uncertainties facing South Africa, which are being further exacerbated by low economic growth and rising unemployment. These conditions, not unexpectedly, impact disposable incomes and generally weigh heavily on the national retail sector.
CAPPREC’s Payments & Payment Infrastructure business is directly impacted by its clients’ exposures to the retail sector. In light of these economic circumstances, the Group’s banking clients, like many other commercial sectors’ participants, have adopted a more judicious and cautious approach to network infrastructure expansion and other capital expenditure initiatives.
In the Software & Services sector, in response to increasing consumer demands, there is a significant and growing movement towards digitisation. The systems required to accommodate this migration, as well as the channels required to distribute the digital banking products, have made the need for technology-led cost-saving initiatives more urgent and have created more demand for the Group’s services.
Commentary
Capital Appreciation Limited Unaudited interim condensed consolidated financial results52
Notwithstanding these patterns of caution and control, CAPPREC subsidiaries successfully managed to expand the scope of their business with existing clients and, given their well-established reputations and track record of innovation and quality and efficient service delivery, have once again been able to attract important new “blue-chip” clients. The Board is very pleased with the operational accomplishments of the Group and the high regard in which the business units are held by their clients and customers. The management teams of each business are aligned to CAPPREC’s strategic imperatives. The teams are focused and are making good progress in ensuring the Group’s portfolio of products and services is suitably positioned for current market conditions. While it remains early in the Group’s journey, there is good momentum in delivering value to our clients. The contributions being made by our staff, and the commitment they demonstrate to the Group and our customers, are both assuring and admirable and will serve the Group and our shareholders well into the future.
SUMMARISED FINANCIAL RESULTSIn assessing the financial results, it should be noted that the comparative financial information for the Payments & Payment Infrastructure and Software & Services segments represents trading for five months, as the acquisitions became effective on 5 May 2017.
CAPPREC generated Revenue for the period of R315.4 million (2017: R201.8 million), an increase of 56% and Earnings Before Interest, Taxation, Depreciation and Amortisation (“EBITDA”) of R81.4 million (2017: R65.5 million), an increase of 24%. Profit Before Taxation increased by 13% to R88.4 million (2017: R78.2 million), with Profit After Taxation increasing by 13% being R63.3 million (2017: R56.2 million). Headline Earnings for the period increased by 13% to R63.3 million (2017: R56.2 million) translating into EPS and HEPS for the period of 4.23 cents per share, an increase of 13% relative to the EPS and HEPS of 3.75 cents per share in the comparable period.
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 that arose in connection with the asset acquisitions concluded by the Group in May 2017. For the period under review, the Group achieved an increase of 13% in NHEPS to 4.55 cents (2017: 4.02 cents). The Group also considers Cash Earnings Per Share to be an appropriate barometer of its performance and for the period under review, Cash Earnings Per Share was 4.60 cents (2017: 1.22 cents).
53
A unifying characteristic of all the underlying businesses within the Group is that they are in a growth phase of their respective lifecycles. Investment and expenditure to support this anticipated growth are required to yield further income producing benefits in future timing periods.
During the period under review, operating costs, as expected, grew faster than revenue, as the Group incurred costs to build capacity in anticipation of growth in commercial activity in both the Payments and Software segments. In Payments, the costs relate to development, marketing and capacity building expenditure associated with the launch of the Dashpay processing services. The technology underlying Dashpay has been branded “Stratagem” and is in the process of being activated in a deliberately phased manner. In Services, the added costs related to increased staffing and training substantially associated with the AWS cloud initiatives being pursued by Synthesis. There were also certain increased costs incurred at Group level for additional executive management, administrative overhead and head office rental.
Finance income earned in 2018 is lower than 2017 mainly as a result of higher cash balances held in the five week period 1 April 2017 to 8 May 2017. The settlement date to the vendors for the acquisition of subsidiary and associate companies was 8 May 2017.
During the period under review, the Group again demonstrated its highly cash generative nature with cash generation of 112% of Trading Profit. This characteristic of the Group’s operational enterprises is well reflected in the Group’s cash resources at 30 September 2018 of R551.5 million. This amount, when compared to the Group’s cash resources at 31 March 2018, is after the payment of the declared dividend in June 2018, the buy-back of 4.68 million CAPPREC shares, and several other cash applications reflected elsewhere in this announcement. As of 30 September 2018, CAPPREC has purchased a total of 60.3 million shares at an average price of 76 cents per share. The Group’s cash resources are invested in call and notice deposits with major banks, which yield market related interest rates.
Based on CAPPREC’s Net Asset Value (“NAV”) per share at 30 September 2018 of 95 cents, 37 cents of that NAV per share is represented by cash. The Group’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.
Capital Appreciation Limited Unaudited interim condensed consolidated financial results54
DIVISIONAL REVIEWAfrican Resonance and Dashpay, as described earlier, comprise the Payments & Payment Infrastructure division of the Group.
African Resonance primarily sells, distributes, maintains, rents and manages payment terminals to, for and on behalf of its banking and institutional clients. African Resonance has a distribution agreement with terminal manufacturer, Ingenico (France), a relationship that has developed with reciprocal respect and advantage since the formation of African Resonance in 2003. This division has continued to generate a sizeable number of terminal sales with more than 27 000 additional terminals being sold during the period. African Resonance at period end has more than 103 000 terminals owned by clients. The Group’s initial objective was to have 100 000 terminals owned by clients by the end of March 2019.
Dashpay was initially conceived as a traditional merchant acquirer when first established in 2013. Since that time a significant amount has been expensed in the development of Dashpay’s systems and technology, with further resources being allocated to complete its exclusively licensed multi-product, multi-party, universal transacting platform, recently branded “Stratagem”. Dashpay is now positioned to provide innovative transaction processing services, solutions and products focused on B2B and Business-to-Business-to-Consumer (“B2B2C”) commercial and payment activity. The Dashpay platform, ecosystem and solution set are intended to complement the traditional payment services provided by the Group’s established banking and institutional client base, are device agnostic and integrate seamlessly with existing legacy systems. Moreover, Dashpay services are ideally suited to serving the rapidly changing needs for secure payment systems and financial management across Africa.
Stratagem is in the process of being activated in a deliberately phased manner and the response at this early stage is encouraging. The value of transactions processed through the Dashpay network, Gross Transaction Value (“GTV”) for the month of October 2018 is more than double the level of activity achieved during any month in the previous financial year and when annualised approximates R1.4 billion. GTV is a key operating metric used to measure the scale of the business and the degree to which Dashpay has and will be able to penetrate the market.
The Payments & Payment Infrastructure segment demonstrated a resilient trading performance notwithstanding continued macro-economic headwinds and low consumer confidence. The division generated revenue of R253.6 million
55
(2017: R164.2 million), up 54%, EBITDA of R70.0 million (2017: R54.8 million), up 28% and a Profit After Tax of R50.7 million (2017: R38.4 million), up 32%. As noted previously, a large part of the Payments segment’s performance is dependent on the state and nature of the economy and the retail sector, in particular. Given the new banking licences recently approved by SARB, particularly to entities promoting technology enabled digital products and services as their primary business, there is likely to be increased pressure on banks to expand services at reduced costs. This will continue to evolve and present the Group with both opportunities and challenges. The opportunities will arise through banks having to compete and provide innovative, contemporary solutions that reduce cost and drive revenue. The challenge is likely to be to the margins the Group will generate as it seeks to respond to clients’ desires to reduce existing operating costs.
Synthesis comprises the Software & Services business that offers highly specialised software development, consulting and integration services and technology-based solutions to banking and other financial institutions in South Africa and other emerging markets. Synthesis’ initiatives span three main areas (i) Cloud, (ii) RegTech, and (iii) Digital Channels. Cloud is the fastest growing segment and has a close strategic alignment with AWS, the cloud computing division of Amazon. Amazon recently announced its intention to establish a regional infrastructure data hub in South Africa, which is expected to open in early 2020. As one of the leading AWS consulting partners in Africa, this should prove to be positive for Synthesis. RegTech provides regulatory reporting solutions to financial institutions, whereas Digital Channels provide secure mobile and web access points for financial services institutions, to enhance their customers’ experience.
In addition to its current offerings, Synthesis is making considerable effort through its research and development division (Synthesis Labs) to deliver on the next phase of technological advancement, which includes, inter alia, machine learning, artificial intelligence, big data and blockchain technology. Synthesis continues to explore opportunities for the commercial application of these developments and research efforts.
Synthesis generated Revenue of R61.8 million (2017: R37.6 million), up 64%, EBITDA of R18.4 million (2017: R10.8 million), up 70%, and a Profit After Tax of R13.4 million (2017: R7.8 million), up 72%. These strong results are the result of organic growth – higher services and consulting fees earned from a wider base of customers, as well as more diversified sales – partially attributable to the prior year’s investment in capacity.
Capital Appreciation Limited Unaudited interim condensed consolidated financial results56
Resonance Australia continues to make positive progress as it nears operational readiness. The company incurred the anticipated development and administration costs for the period. CAPPREC’s share of the resultant deficit of R1.2 million is appropriately reflected as a separate item in the statement of comprehensive income. The Board is satisfied with the evolving activity in Australia and further information on the company’s progress will be provided in the normal course.
BROAD-BASED BLACK ECONOMIC EMPOWERMENT (“B-BBEE”)During the period under review, both African Resonance and Synthesis had their B-BBEE status reviewed. We are delighted to report that African Resonance received a Level 2 and Synthesis a Level 3 contributor accreditation. This is a remarkable achievement and consistent with the Group’s overall commitment to B-BBEE. Dashpay remains in its early developmental state and will begin to focus on its B-BBEE rating once more substantial commercial activity is under way.
PROSPECTSThe economic environment in South Africa continues to be challenging, with all sectors affected by low levels of consumer confidence and muted commercial activity. Against this backdrop, and while the pressures of the economic climate cannot be ignored, CAPPREC, with a level of cautious confidence, believes that (i) the growth potential of the Group’s subsidiary enterprises continues to be substantial and compelling, and (ii) a reasonable rate of continued organic growth is expected in each of the business units.
Technology continues to have an accelerating impact on the financial services sector, thereby affecting business models, revenue streams, consumer expectations, products offered, services rendered, operating cost structures and regulation. Changes in each of these will precipitate disruptions that will, in themselves, present opportunities for innovative solutions. CAPPREC’s subsidiary enterprises each have a long history of innovating in their respective fields and being responsive to clients’ needs. Our standing as a trusted partner positions CAPPREC well in the rapidly evolving FinTech sector.
The sector in which CAPPREC operates and invests also presents several interesting acquisition opportunities and, given the Group’s strong operating cash flows, cash resources and borrowing capacity, these prospective opportunities will receive management’s careful consideration. Opportunities also exist for the expansion and technology transfer of our business models into new markets and certain of these are presently being researched.
57
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 2018 (2017: 2.0 cents). We note the following:• Dividends are subject to dividends withholding tax.• The payment date for the dividend is Monday, 10 December 2018.• 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 1.80 net of
withholding tax. • CAPPREC has 1 555 000 000 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, 4 December 2018 • Shares commence trading ex dividend Wednesday, 5 December 2018• Dividend record date Friday, 7 December 2018• Dividend payment date Monday, 10 December 2018
Share certificates for ordinary shares may not be dematerialised or rematerialised between Wednesday, 5 December 2018 and Friday, 7 December 2018, both days inclusive.
ACCOUNTING POLICIES AND BASIS OF PREPARATION These unaudited interim condensed Group 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 Group financial results are in terms of IFRS and are consistent in all material respects with those applied in the most recent Group 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 consolidated interim Group financial results which are available for inspection at our offices.
Capital Appreciation Limited Unaudited interim condensed consolidated financial results58
PREPARATION OF SUMMARISED FINANCIAL REPORTS The financial results herein have been prepared under the supervision of Mr Alan Salomon CA(SA) in his capacity as the Group Chief Financial Officer, and were approved by the Board on 13 November 2018. For further information hereto, please refer to the section below captioned Accounting Policies and Basis of Preparation.
UNAUDITED INTERIM FINANCIAL STATEMENTSThis 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.
59
Figures in Rand Note
Unaudited 6 months ended
30 September 2018
% change
Unaudited 6 months ended
30 September 2017
Re-presented(1) (2)
Revenue 2 315 418 112 56 201 775 680Cost of sales (184 734 426) (120 289 977)
Gross profit 130 683 686 60 81 485 703 Operating expenses (47 917 020) 210 (15 470 048)
Trading profit 82 766 666 25 66 015 655 Share-based payment expense (196 600) (25 985) Depreciation (3 479 355) (3 260 565) Amortisation of intangibles 3 (6 804 622) (5 528 333)
Operating profit 72 286 089 26 57 200 772 Finance income 17 663 935 21 633 307 Finance costs (299 676) (180 421) Equity-accounted loss in associate (1 205 636) (452 526)
Profit before taxation 88 444 712 13 78 201 132 Taxation 3 (25 142 547) (22 047 330)
Profit after taxation 63 302 165 13 56 153 802 Other comprehensive income – –
Total comprehensive income for the period 63 302 165 13 56 153 802
Basic earnings per share (cents) 4.23 13 3.75Headline earnings per share (cents) 4.23 13 3.75 Diluted earnings per share (cents) 4.14 12 3.69Diluted headline earnings per share (cents) 4.14 12 3.69
Number of ordinary shares in issue 4 1 555 000 000 1 555 000 000 Weighted average number of shares in issue 1 497 743 079 1 495 935 842 Diluted weighted average number of shares in issue 1 529 650 423 1 520 198 137 (1) In terms of IFRS 3 – Business Combinations, management completed the purchase price allocation (“PPA”)
in the latter part of the 2018 financial year. Accordingly the impact has been re-presented in the 30 September 2017 results. Refer to Note 3.
(2) The financial information for the Payments and Software and Services division represents trading for 5 months, as the acquisitions became effective on 5 May 2017.
Condensed Group statement of COMPREHENSIVE INCOME
for the six months ended 30 September 2018
Capital Appreciation Limited Unaudited interim condensed consolidated financial results60
Condensed Group statement of FINANCIAL POSITIONat 30 September 2018
Figures in Rand Note
Unaudited 30 September
2018
Audited31 March
2018
Unaudited30 September
2017Re-presented(1)
ASSETSProperty, plant and equipment 18 764 233 15 275 684 15 864 752 Intangible assets 3 66 654 548 71 452 462 78 165 645 Goodwill 3 728 577 776 728 577 776 728 577 776 Other financial assets 18 297 738 17 625 214 16 952 674 Investment in associates 27 582 673 28 788 310 36 333 335Deferred tax 6 416 309 2 643 528 3 020 684
Non-current assets 866 293 277 864 362 974 878 914 866
Inventories 10 102 704 21 320 108 –Trade and other receivables 108 304 450 68 034 527 98 703 029 Loan to associate 5 091 841 4 512 392 –Taxation receivable 510 154 307 957 247 229 Cash and cash equivalents 551 525 305 513 169 862 463 481 526
Current assets 675 534 454 607 344 846 562 431 784
Total assets 1 541 827 731 1 471 707 820 1 441 346 650
EQUITY AND LIABILITIESCapital and reservesShare capital 4 1 207 330 459 1 211 781 099 1 234 340 906 Share-based payment reserve 447 100 250 500 25 985 Contingent consideration reserve 3 24 900 000 24 900 000 24 900 000 Retained income 3 188 690 386 155 355 981 98 973 872
Total equity 1 421 367 945 1 392 287 580 1 358 240 763
Deferred revenue 6 404 167 7 066 667 8 391 667 Contingent consideration 3 8 975 889 8 689 618 8 163 000 Deferred tax 3 18 074 467 19 931 987 21 789 507
Non-current liabilities 33 454 523 35 688 272 38 344 174
Trade and other payables 3 72 361 880 33 091 148 29 121 897 Bank overdraft – – 349 869 Other financial liabilities – 2 989 613 7 370 229 Deferred revenue 1 325 000 1 325 000 662 500 Taxation payable 13 318 383 6 326 207 7 257 218
Current liabilities 87 005 263 43 731 968 44 761 713
Total equity and liabilities 1 541 827 731 1 471 707 820 1 441 346 650 (1) In terms of IFRS 3 – Business Combinations, management completed the purchase price allocation (“PPA”)
in the latter part of the 2018 financial year. Accordingly the impact has been re-presented in the 30 September 2017 results. Refer to Note 3.
61
Condensed Group statement of CASH FLOWS
for the six months ended 30 September 2018
Figures in Rand Note
Unaudited6 months
ended30 September
2018
Unaudited6 months
ended30 September
2017Re-presented(1)
Auditedyear ended
31 March 2018
Profit before taxation 88 444 712 78 201 132 199 989 814 Adjustments for:Finance income (17 663 935) (21 633 307) (39 437 269) Finance costs 299 676 180 421 785 056 Non-cash flow items 11 512 616 9 285 611 18 152 278 Changes in working capital 9 829 932 (25 388 603) (12 553 368)
Cash flow from operations 92 423 001 40 645 254 166 936 511 Finance income 17 663 935 21 633 307 39 427 325 Finance costs paid (13 405) – (248 493) Dividends paid (29 967 760) – (30 400 000) Taxation paid (23 472 972) (22 409 002) (61 154 563)
Net cash flow from operating activities 56 632 799 39 869 559 114 560 780
Acquisition of property, plant and equipment (8 269 827) (5 126 371) (4 872 247) (Acquisition)/disposal of intangible assets (2 006 708) 34 345 (182 160) Proceeds on disposal of property, plant and equipment 1 301 921 (115 319) 405 075 Acquisition of subsidiaries net of cash acquired 3 – (553 009 486) (553 009 486) Acquisition of associate 3 – (30 496 520) (30 206 520) Loan to associate – (5 024 791) (5 024 791) Repayment of loans – 4 153 532 4 153 532
Net cash flow from investing activities (8 974 614) (589 584 610) (588 736 597)
Cash flows from financing activitiesPurchase of treasury shares (4 450 640) (18 811 594) (41 371 401) Repayment of loans 3 (4 362 102) (16 130 379) (19 071 601)
Net cash flow from financing activities (8 812 742) (34 941 973) (60 443 002)
Net increase/(decrease) in cash and cash equivalents 38 845 443 (584 657 024) (534 618 819) Cash and cash equivalents at the beginning of the period 512 679 862 1 047 788 681 1 047 788 681
Cash and cash equivalents at the end of the period 551 525 305 463 131 657 513 169 862
Split as follows:Cash and cash equivalents 551 525 305 463 481 526 513 169 862 Bank overdraft – (349 869) –
551 525 305 463 131 657 513 169 862
Capital Appreciation Limited Unaudited interim condensed consolidated financial results62
Condensed Group statement of CHANGES IN EQUITYfor the six months ended 30 September 2018
Figures in RandOrdinary
share capital
Constituent ordinary
share capital
Share-based payment
reserve
Contingent consideration
reserveRetained
income(1)Total
equity
Balance at 1 April 2017 1 000 002 500 4 000 000 – – 38 820 070 1 042 822 570
Issue of ordinary share capital 253 150 000 253 150 000 Repurchase of constituent ordinary share capital (4 000 000) 4 000 000 –Share-based payment reserve 25 985 25 985 Contingent consideration reserve 24 900 000 24 900 000 Purchase of treasury shares (18 811 594) (18 811 594) Total comprehensive income for the six months ended 30 September 2017 56 153 802 56 153 802
Balance at 30 September 2017 1 234 340 906 – 25 985 24 900 000 98 973 872 1 358 240 763
Share-based payment reserve 224 515 224 515 Purchase of treasury shares (22 559 807) (22 559 807) Cash dividend paid (30 400 000) (30 400 000) Total comprehensive income for the six months ended 31 March 2018 86 782 109 86 782 109
Balance at 31 March 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 Purchase 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(1) The opening balance of Retained income in the prior year has been re-presented to reflect IFRS 3
– Business combinations.
63
Figures in RandOrdinary
share capital
Constituent ordinary
share capital
Share-based payment
reserve
Contingent consideration
reserveRetained
income(1)Total
equity
Balance at 1 April 2017 1 000 002 500 4 000 000 – – 38 820 070 1 042 822 570
Issue of ordinary share capital 253 150 000 253 150 000 Repurchase of constituent ordinary share capital (4 000 000) 4 000 000 –Share-based payment reserve 25 985 25 985 Contingent consideration reserve 24 900 000 24 900 000 Purchase of treasury shares (18 811 594) (18 811 594) Total comprehensive income for the six months ended 30 September 2017 56 153 802 56 153 802
Balance at 30 September 2017 1 234 340 906 – 25 985 24 900 000 98 973 872 1 358 240 763
Share-based payment reserve 224 515 224 515 Purchase of treasury shares (22 559 807) (22 559 807) Cash dividend paid (30 400 000) (30 400 000) Total comprehensive income for the six months ended 31 March 2018 86 782 109 86 782 109
Balance at 31 March 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 Purchase 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(1) The opening balance of Retained income in the prior year has been re-presented to reflect IFRS 3
– Business combinations.
Capital Appreciation Limited Unaudited interim condensed consolidated financial results64
NotesNOTE 1. CONSOLIDATED SEGMENT ANALYSIS
Payments Software & Services Corporate Group
Figures in Rand30 September
2018
30 September2017
Re-presented(1) (2)
30 September2018
30 September2017
Re-presented(1) (2)
30 September2018
30 September2017
Re-presented(1) (2)
30 September2018
30 September2017
Re-presented(1) (2)
Revenue 253 582 243 164 169 445 61 835 869 37 606 235 – – 315 418 112 201 775 680Trading profit/(loss) 69 981 401 54 765 156 18 380 501 10 792 629 (5 595 237) 457 870 82 766 665 66 015 655 Depreciation (2 980 227) (3 028 900) (267 863) (191 141) (231 265) (40 524) (3 479 355) (3 260 565) Amortisation of intangibles (170 622) – – – (6 634 000) (5 528 333) (6 804 622) (5 528 333) Operating profit 66 830 552 51 736 256 18 112 639 10 601 488 (12 657 102) (5 136 972) 72 286 089 57 200 772 Profit after taxation 50 732 788 38 413 910 13 428 855 7 780 492 (859 578) 9 959 400 63 302 065 56 153 802 Total assets 190 898 644 163 844 145 47 369 131 35 563 336 1 303 559 956 1 241 939 169 1 541 827 731 1 441 346 650 Total liabilities 70 330 835 32 679 221 19 227 101 17 991 152 30 901 852 32 435 514 120 459 788 83 105 887 Net assets 120 567 809 131 164 923 28 142 030 17 572 184 1 272 658 106 1 209 503 656 1 421 367 945 1 358 240 763
Figures in Rand30 September
201830 September
2017(2)
NOTE 2. REVENUEPayments divisionRental income 44 793 577 44 258 910Maintenance and support service fees 28 630 633 20 147 166Sale of terminals 165 675 777 88 649 237Transaction fees 7 441 404 5 050 627Other revenue 7 040 852 6 063 505
253 582 243 164 169 445
Software & Services divisionServices and consultancy fees 45 915 512 29 807 588 Licence and subscription fees 14 038 895 5 305 632 Hardware 1 881 462 2 277 302 Other turnover – 215 713
61 835 869 37 606 235
Total revenue 315 418 112 201 775 680
Geographic RegionSouth Africa 307 363 110 196 239 395 Rest of Africa and Indian Ocean Islands 8 055 002 5 536 285
315 418 112 201 775 680
65
NOTE 1. CONSOLIDATED SEGMENT ANALYSISPayments Software & Services Corporate Group
Figures in Rand30 September
2018
30 September2017
Re-presented(1) (2)
30 September2018
30 September2017
Re-presented(1) (2)
30 September2018
30 September2017
Re-presented(1) (2)
30 September2018
30 September2017
Re-presented(1) (2)
Revenue 253 582 243 164 169 445 61 835 869 37 606 235 – – 315 418 112 201 775 680Trading profit/(loss) 69 981 401 54 765 156 18 380 501 10 792 629 (5 595 237) 457 870 82 766 665 66 015 655 Depreciation (2 980 227) (3 028 900) (267 863) (191 141) (231 265) (40 524) (3 479 355) (3 260 565) Amortisation of intangibles (170 622) – – – (6 634 000) (5 528 333) (6 804 622) (5 528 333) Operating profit 66 830 552 51 736 256 18 112 639 10 601 488 (12 657 102) (5 136 972) 72 286 089 57 200 772 Profit after taxation 50 732 788 38 413 910 13 428 855 7 780 492 (859 578) 9 959 400 63 302 065 56 153 802 Total assets 190 898 644 163 844 145 47 369 131 35 563 336 1 303 559 956 1 241 939 169 1 541 827 731 1 441 346 650 Total liabilities 70 330 835 32 679 221 19 227 101 17 991 152 30 901 852 32 435 514 120 459 788 83 105 887 Net assets 120 567 809 131 164 923 28 142 030 17 572 184 1 272 658 106 1 209 503 656 1 421 367 945 1 358 240 763
NOTE 3. RE-PRESENTED RESULTSIn terms of IFRS 3 Business Combinations, management completed the PPA in the latter part of the 2018 financial year. Accordingly the impact has been re-presented in the 30 September 2017 results.
30 September2017
Re-presented
30 September2017
Previouslyreported
Statement of financial positionIntangible assets 78 165 645 345 978 Goodwill 728 577 776 753 158 608 Contingent consideration reserve (24 900 000) –Contingent liability (8 163 000) –Deferred tax (21 789 507) –Trade and other payables (29 121 897) (26 755 169)Retained income (98 973 872) (102 954 272)
Statement of comprehensive incomeAmortisation of intangibles (5 528 333) –Deferred taxation 1 547 933 –
Statement of cash flowsAcquisition of subsidiaries net of cash acquired (553 009 486) (569 889 865)Acquisition of associate (30 496 520) (29 746 520)Repayment of loans (16 130 379) –(1) In terms of IFRS 3 – Business Combinations, management completed the purchase price allocation (“PPA”)
in the latter part of the 2018 financial year. Accordingly the impact has been re-presented in the 30 September 2017 results. Refer to Note 3.
(2) The financial information for the Payments and Software and Services division represents trading for 5 months, as the acquisitions became effective on 5 May 2017.
Capital Appreciation Limited Unaudited interim condensed consolidated financial results66
30 September 2018
Number
31 March 2018
Number
30 September 2017
Number
NOTE 4. SHARE CAPITALReconciliation of issued ordinary sharesNumber of issued ordinary shares at the beginning of the period 1 555 000 000 1 250 000 000 1 250 000 000 Number of ordinary shares issued during the period – 305 000 000 305 000 000
Number of issued ordinary shares at end of the period 1 555 000 000 1 555 000 000 1 555 000 000
Number of issued ordinary treasury shares on hand at end of the period (60 300 000) (55 620 000) (25 000 000)
Number of issued ordinary shares, net of treasury shares at end of the period 1 494 700 000 1 499 380 000 1 530 000 000
During the period the Group purchased 4 680 000 ordinary shares at an average price of 95.1 cents per share.
NOTE 5. NEW STANDARDS AND INTERPRETATIONS5.1 Standards and interpretations adopted in the current year5.1.1 IFRS 9 Financial Instruments: IFRS 9 has been adopted in the current year using modified retrospective method and not restating comparatives. The implementation of IFRS 9 had no material financial impact in the results.
5.1.2 IFRS 15 Revenue from Contracts with Customers: IFRS 15 has been adopted in the current year using modified retrospective method. The implementation of IFRS 15 had a disclosure impact whereby items such as Finance Income are no longer presented in Revenue from Contracts with Customers and are accordingly presented. The implementation of IFRS 15 had no material financial impact in the results.
5.2 Standards and interpretations not yet effective5.2.1 IFRS 16 Leases: The impact of these amendments is currently being evaluated by the Group.
NOTE 6. POST PERIOD END EVENTS The directors are not aware of any matter or circumstance arising since the end of the financial period.
On behalf of the Board
Michael (Motty) Sacks Michael Pimstein and Bradley Sacks Alan SalomonNon-Executive Chairman Joint Chief Executive Officers Chief Financial Officer
Sandton14 November 2018
Corporate INFORMATIONCapital Appreciation LimitedIncorporated in the Republic of South Africa(Registration number 2014/253277/06)Share code: CTA ISIN: ZAE000208245(“CAPPREC”, or the “Group”)
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), R Morar#, B Bulo#, JM Kahn#, Prof H Neishlos#, VM Sekese#, CL Valkin#, KD Dlamini#, EM Kruger#, MG Mokoka#, E Neishlos# * Executive # Non-Executive
Company Secretary: Crowe JhbAuditors: Ernst & Young Inc. Sponsor: Investec Bank Limited Email: [email protected] Website: www.capitalappreciation.co.za
Transfer SecretaryComputershare Investor Services Proprietary LimitedRosebank Towers, 15 Biermann Street, Rosebank, 2001(PO Box 61051, Marshalltown, 2107)
GREYMATTER & FINCH # 12738
www.capitalappreciation.co.za