About Ecsponent Limited

Who we are

We are an African financial services group, diversified by our operational footprint and the spread of industries in which we invest. The group’s focus is on quality investments in niche industries with innovative value propositions that have high barriers to entry.

Operationally, the Ecsponent group creates wealth by investing in companies that offer a range of niche financial services in South Africa and Africa, offering targeted investment services, credit solutions and enterprise development initiatives that improve financial inclusion for SMEs. We balance the short-term cash generative operational activities through our Equity Holdings business unit, which invests in listed and private equity with a longer-term investment horizon.

Since inception, we have expanded through a combination of substantial organic growth and a series of strategic acquisitions. Today, we’re an African financial services group with core activities in four African countries and a spread of investments across multiple territories, currencies and investment sectors. Our investment mix and experienced management team have built a strong track record through organic growth, mergers and acquisitions, and corporate actions since 2010:

  • Consistent management team with proven deal-making ability
  • Focused approach on niche opportunities, underpinned by financial services
  • Consistent high-growth of assets
Ecsponent Group operations and investments

Our business model

Ecsponent finds opportunities to invest in markets, industries, or technologies that produce products and solutions that satisfy consumers’ latent needs or to create markets where none existed before. To do this, while generating sustainable returns, our business model distinguishes between operational investments and strategic longer-term investments.

  • Operationally, we invest in and develop financial services solutions and products with strategic differentiation and competitive advantage in their respective markets. These investments and operations provide us with short-term liquidity And cash flow.
  • To match the horizons of our assets and liabilities and secure our future wealth-generating abilities, we own strategic investment holdings that meet our investment criteria that offer exceptional asset appreciation potential and balance our short-term assets with longer-term investments.
  • The group offers a distribution footprint through its various own operations, which provides a strategic asset and springboard into southern Africa, for both investors and third party financial product suppliers.
  • We secure adequate and appropriate funding for the group, using the strength of our balance sheet and through our JSE-listed preference share and bond programmes targeting retail and institutional investors.
  • Our philosophy is to run a small, cost effective corporate office with divisional management taking responsibility for daily operations. Our flat management structure ensures agile decision-making and low overhead cost structures.
  • We are continuously looking to grow our spread of investments in targeted areas that will accelerate technological change to unlock new opportunities for consumers and businesses in high-growth sectors.

Footprint and distribution

We operate across Southern Africa, with offices in Botswana, Swaziland, Zambia and in five provinces in South Africa. We offer similar products and services – Investment Services and Credit – in all countries of operation, with variations as required by local regulations. Our regional presence provides a platform for efficient service, improved ability to respond to market needs and greater client satisfaction. Our equity investments are spread across Africa, Europe and Australia, and diversified across multiple currencies and market sectors to mitigate risk.

These services vary in different jurisdictions of operation.
The core business units include:

Credit

Through a combination of secured finance, logistics and procurement support, skills development and training, we support different business sectors, including:

  • Emerging businesses and individuals
  • Small & Medium Enterprises (SME)
  • Large corporate businesses
  • Green project developers

By providing solutions like:

  • SME credit
  • Enterprise development
  • Specialist procurement and logistics

Investment Services

Capital is raised via Ecsponent’s R5 billion JSE-approved preference share programme and similar linked-loan unit programme in Swaziland.

Additionally, this unit leverages the infrastructure of the group’s financial services footprint and broker network to provide other
financial and investment products and services to the client base.

  • Umbrella funds
  • Preservation funds
  • Unit trusts
  • Life products
  • Annuities
  • Endowments
  • Tax-free savings accounts

Equity Holdings

Ecsponent’s Equity Holdings investment criteria have remained unchanged over the years and the group has become known for its ongoing merger and acquisition (M&A) activities. At the end of the reporting period, we announced a series of transactions*, when combined exceeded R1 billion.

It is not just the quantum of these transactions that is significant to the group, but more importantly the sectoral, geographical and currency spread that is added to our Equity Holdings portfolio. Moreover, these investments represent assets in high-growth areas with outstanding prospects and offers exceptional synergies to satisfy consumers’ unmet or unstated needs or to create markets where none existed before.

These transactions are:

  • Position the group for future value-enhancing investment opportunities;
  • Provide a balance between the group’s short-term cash generative assets and longer-term growth assets;
  • Create an efficient and professional management structure for the group’s equity investments;
  • Improve the balance sheet concentration exposure; and
  • Increase the group’s equity holding in assets considered to have high growth potential.
  • Currently, the group’s Equity Holdings investments are diversified across multiple industries:
Financial Services
  • MyBucks
  • Ecsponent Financial Services Zambia
Healthcare
  • Go Life International
  • Digital Media and Marketing
  • Truth Digital Group
    • The Group has recently announced transactions valued at R1.2 billion that will be concluded in the second half of 2018, pending shareholder approval. These transactions will strengthen the Group’s financial services holdings in Africa and invest in several lucrative opportunities presented by renewable energy on the continent.

    Ecsponent's growth story

    As a JSE-listed company with operations expanding across Africa, Ecsponent focuses on opportunities where local businesses can be leveraged, grown or brought into the group.

    Ecsponent has a strong future-based investment philosophy and deploys investment funding to companies that demonstrate a strong growth track record, coupled with untapped commercial potential that can result in above average investment returns. Overall, the group seeks out value-enhancing acquisitions that complement the group’s business model and are aligned to its expansion plans or other investment.

    History

    Established in 1995, the venture capital investment holding company John Daniel Holdings (JDH) listed on the JSE’s Venture Capital board in August 1998.

    In 2010, the company’s shareholders introduced a group of investors to the business, which sparked the start of a long-term relationship and resulted in a fundamental shift in the business’ future. Later in the same year, a new board of directors and management team were appointed to JDH. This change in leadership refocused the company’s strategic direction, resulting in significant growth, improved governance and relationships with shareholders.

    Following these changes, the primary funder at the time agreed to convert its debt to equity, backing the management team and the group’s strategy. And so, from humble beginnings, a venture capital company with two subsidiaries evolved into what is today, a fully-fledged and rapidly growing African Financial Services group with multiple subsidiaries. The group has expanded its horizons to include a number of geographies across Africa but has retained the same core focus which has made the business so successful.

    Ecsponent’s exponential growth

    84%

    Total Assets

    R2 235.8 million

    R1 214.8 million (2017)

    146%

    p.a. five-year CAGR

    45%

    Revenue

    R447 million

    R321 million (2017)

    88%

    p.a. five-year CAGR

    44%

    Profit after tax

    R97.4 million

    R67.6 million (2017)

    139%

    p.a. five-year CAGR

    >100%

    HEPS

     

    (2017: 91%)

    91%

    p.a. five-year CAGR

    Total assets

    • (R-million)

    Group profit after tax

    • (R-million)

    Group operating profit

    • (R-million)

    Group revenue

    • (R-million)

    Vision

    Ecsponent intends to become the premier provider of financial services in the niche market segments of the territories…

    Mission

    The Ecsponent group strives is to create and provide a secured environment for predominantly investors to obtain…

    Values

    The Ecsponent group fuses traditional, proven investment principles with progressive, creative thinking that…

    Goals and Initiatives

    The group seeks to identify, develop and profitably commercialise intellectual property and technology predominantly…