Niche financial services group Ecsponent more than doubled headline earnings per share (HEPS) for the 15-month financial year to end-June.
"We are very proud as a management team to deliver these results, which represent seven years of successive growth," says CEO Terence Gregory. "We have a reasonably refined business model and we have stuck to our knitting."
Revenue from continuing operations rose by 45% to R466m and HEPS more than doubled to 6.99c per share. The group’s total assets increased by 84% to R2.2bn
The group comprises three primary business units. Its largest, in terms of capital allocated, is providing credit to small- and medium-sized enterprises (SMEs) that comprise BEE companies attempting to access opportunities in supply-chain procurement.
We believe our business model works well, so we will continue to concentrate on growing organically.
Total loans and advances increased by 65% to R1.23bn over the period and the division posted a small operating profit of R363,000.
"Corporates are supposed to provide one third of procurement through previously disadvantaged businesses, which is a tall order and one we think will remain unfulfilled for the next 10 years. This will provide us with the space to grow," says Gregory.
The second division comprises investment services, which is the group’s capital-raising arm. Ecsponent has brought a number of preference share products to market to fund its ongoing expansion. This was complemented in the last financial year by dollar-denominated funding the group was able to access overseas. The division has also received a collective investment scheme licence in Swaziland in which it plans to further its offering.
Its third and newest division, Equity Holdings, comprises making direct, minority equity stakes in businesses in high-growth segments, which include fintech, healthcare and digital media. For instance, Ecsponent holds a 12.1% stake in Frankfurt-listed fintech company MyBucks run by micro-finance entrepreneur, Dave van Niekerk.
Says Gregory, "We believe our business model works well, so we will continue to concentrate on growing organically. From an acquisition point of view we will continue to make investments. The underlying principal of the acquisitions is that we do not need the investments at this stage to fund ongoing growth."