Johannesburg – June 29, 2018 – African financial services group Ecsponent Limited (Ecsponent) today announced interim results for the 12-months ended 31 March 2018. The period was characterised by continued strong financial performance, as the Group looks to further expand and grow its business operations in line with its strategic focus.

Key features

The Group’s March 2018 interim results reflect the impact the rationalisation has had on its operations in the previous financial period. The current interim period comprises 12 months ending 31 March 2018, while the comparative period is for the 15 months ended 31 March 2017.

 

 

Results commentary

Ecsponent CEO Terence Gregory believes the strategic focus of the Group’s operations has provided it with a strong basis to continue providing stakeholders with significant growth, and thereby generating wealth.

“Having achieved significant development and growth over the past few years, the Group continues to strive for further refinement of its business processes.”

In doing so, Ecsponent is better able to incorporate the key elements of its ongoing growth strategy. These are:

  • continued focus on its core businesses;
  • reduction in the cost of capital;
  • increased emphasis on high yield equity opportunities and sector diversification;
  • further improvement in the balance of long and short-term assets;
  • ongoing investment in the Group’s credit operations;
  • obtaining rand and foreign currency institutional funding; and
  • aggressive cost rationalisation.

 

Since 2012, the annual compounded growth of the Group’s assets has been 104% per annum. Operating profit increased by 131% per annum and revenue by 66%.

“All our efforts in the reporting period are intended to provide the group with further momentum for growth. The platform created for future dynamic growth is already evident in the Group’s operations,” says Gregory.

In terms of its fund-raising activities, the Group secured an international funding facility for $10 million from a UK-based corporate financier at the end of 2017. This dollar-based funding is deployed to expand its undertakings in Africa.

Its Credit business unit, which deploys secured credit to fund the business activities of qualifying entities, has benefited from a buoyant African SME sector resulting in an increased demand for credit. Total assets in this business unit increased by 20.9% with operating profit increasing by 143%.

Additionally, the Equity Holdings business unit (which invests strategically in companies operating in high-growth sectors) saw its total assets increase by 18.7%. At 31 March the Group held 12% in the Frankfurt-listed Fintech company MyBucks SA that provides it with a foreign currency hedge against the rand’s frailty.

“Ecsponent has a strong operational footprint not only in South Africa but also in Swaziland and Botswana with in-country client representation in each country. In Zambia, the Group holds a 25% stake in the local Getbucks entity, which is a deposit-taking financial institution. However, we are keen on expanding our business across the continent, with the streamlined operations now allowing for this,” says Gregory.

Post the reporting period, the Group has announced transactions with a cumulative value of R1.2 billion, intended to provide it with significant growth opportunities and provide a balance between its short-term cash-generative assets and longer-term growth assets. These transactions will provide further momentum to its growth strategy, realising results within the next reporting period.

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