- Ecsponent to take control of the MyBucks group in a R450 million transaction, continuing its growth trajectory
- Control of MyBucks S.A. expected to result in:
- Improved profitability for both Ecsponent and MyBucks groups
- Increased footprint, products and infrastructure for the Ecsponent group, as well as improved currency and geographical diversification
- Reduced concentration risk and increased control over underlying assets
- Recapitalisation of the MyBucks group
- Interim results reflect ongoing balance sheet growth and balancing of short- and long-term horizons
Today we announced that Ecsponent Limited is intending to conclude an agreement which will see the Group take control of the Frankfurt-listed fintech company, MyBucks S.A.
In terms of the proposed agreement between the groups, Ecsponent will convert the loans it has advanced to MyBucks to equity at a subscription price of EUR1.00 per share. The value of the transaction is R450 million or EUR27,829,313 and will increase Ecsponent’s shareholding from 39.7% to over 50%, at an average price of EUR2.89 per share, once approved by shareholders.
The result is a significant improvement in MyBucks’ equity side of their balance sheet while drastically reducing finance cost, which will flow through directly to the bottom line. Additional value from the transaction is expected to flow through to the MyBucks bottom line through management restructuring and reduction of overheads – a process which has started and is being led by Ecsponent and new management. Read more…
Ecsponent has also released interim financial results for the six months ended 31 December 2018.
In line with its strategy to build a strong balance sheet able to meet its short and long-term commitments, Group’s assets have shown a compound annual growth of 110% per annum over the past five years. Similarly, total assets have increased by 90% measured against the comparative results for the six-month period ended 30 September 2017 (“Prior Period”).
Results highlights (compared to Prior Period)
- Gross assets increased by 89.8% to R2.8 billion from R1.5 billion.
- Of the Group’s R2 775 million total assets, R1 275 million, or 46.0% of total assets, are held outside of the Common Monetary Area. These investments provide a hedge against a weakening rand.
- Investment in Associates increased by 173.9% to R748 million from R273 million.
- Loans and Advances increased by 18.9% to R1.2 billion from R1 billion.
- Revenue from continuing operations increased by 29.5% to R200 million.
- Operating profits from continuing operations increased by 70.2% to R218 million compared to R128 million.
- Net cash inflows from financing activities increased by 40.8% to R408.3 million from R290 million.
The period under review coincided with the build up to the initiation of the takeover of the MyBucks group and consequently, revenue and operating profit did not increase at the triple digit returns the Group has been posting over the last seven years. Revenue increased by 29% and operating profit by 70% when compared to the comparative period. Headline earnings per share (HEPS) commensurately decreased by 81.6% and earnings per share (EPS) is down 89.8%.
The first six months of the financial year have been productive and we expect the second half to be no different.