29 June 2017 – Buoyed by growth across its three strategic business units, Ecsponent Limited (Ecsponent) has defied the turmoil in local and global markets by reporting strong financial results for the extended 15-month reporting period ending 31 March 2017. This marks the sixth consecutive year the African financial services group has achieved triple digit growth in its key performance areas.
Following a series of transactions to further refine the Ecsponent group’s business focus, revenue from its continuing operations increased by 122% to R321.8 million, compared to R144.7 million in the comparative period. Operating profits increased by 416% to R229.2 million compared to R44.4 million in the comparative period. The resultant earnings per share (EPS) increased by 223%to 8.38 cents per share compared to 2.59 cents per share in the comparative period.
“Our sustained growth can be attributed to the consistent performance of the continuing operations across our core business units – Investment Services (including capital raising), Business Credit and Equity Holdings. These core business assets are identifiable by their contribution to profits. Similarly, the discontinued operations, including the disposal groups held for sale, contributed only 4% to our operating profit[i],” says Terence Gregory, CEO of Ecsponent.
Investment Services has continued its exponential growth during the period. As such, preference shares issued under the company’s JSE-approved Preference Share Programme increased by 136% from R230 million in 2015 to R807.8 million in 2017. R70.7 million was raised in Swaziland through the similar linked-loan units programme. R127.3 million was paid or accrued to preference shareholders as dividends during this period.
Under its Business Credit operations, Ecsponent finalised the disposal of its retail credit operations in favour of secured business credit to small to medium enterprises (SMEs), including enterprise finance. These operations saw interest income increase by 271% to R232.3 million for the period under review. “Enterprise or SME development finance contributed R31 million of this income – a pleasing start-up result. In addition, Ecsponent Procurement Services (EPS) contributed a revenue of R30.6 million to the group results,” adds Gregory.
Finally, Equity Holdings was significantly bolstered during the period under review with the acquisition of 10% of the issued share capital in MyBucks SA., a Luxemburg-based fintech company with credit, banking, and insurance products and which is listed on the Frankfurt Stock Exchange.
The group’s Biotechnology business increased sales revenue by 28.7% from the comparative period to R32.2 million. This growth was a result of contracts concluded in the previous period which resulted in lead generation from medical aid and pharmacy groups.
The group’s investment in the media intelligence business, Return on Innovation, showed sustained growth as the business continued to make inroads into the niche media market space. The company contributed R10.3 million in revenue for the 11 months included in the group results.
“While we are proud of the group’s continued triple digit growth, this could not have happened without the clear objectives we have put in place for each of our strategic business units. Investment Services is substantially expanding its product offering through internal development as well as strategic partnerships with respected financial services providers. Business credit is significantly increasing its enterprise development offering and the equity business has a target to achieve further synergistic and profitable acquisitions during the current year.
Additionally, George Manyere, through his local asset holding company Mason Alexander, became the major shareholder of Ecsponent. To this end, Manyere has agreed to assume the position of Deputy Chairman on the board.
“We are privileged to have someone with his international experience and business acumen. I look forward to working with him and to the contribution he will undoubtedly make. This has been a significant period for us and one that could not have been accomplished without the commitment and dedication of our management team, non-executive directors, and our employees,” says Gregory.