Ecsponent, a specialist financial-services company funded mostly by high-yielding preference shares, reported a surge in cash flow from operations in the 15 months to March. To service the interest payments on its sizeable preference-share issue (with coupon rates as high as 13%), Ecsponent needs to grow profit and commensurate cash flow strongly every year. Cash flow from operations came in at R177m compared with R20m in the 12 months to December. The extended trading period followed a change in Ecsponent’s financial year end. Net finance costs of R107m — related mainly to preference-share issues — was comfortably covered by cash flow from operations, leaving the net cash inflow from operations at more than R45m. Ecsponent CEO Terence Gregory said preference shares issued had increased 136%, from R230m in 2015 to R808m in 2017. He said more than R70m was raised in Swaziland through a similar linked-loan units programme. Gregory said R127m was paid or accrued to preference sharehold...

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