Capital Appreciation reported a robust set of results for the year ended 31st March 2022, with headline earnings up by 29.6% and dividends per share increasing by 73% to 7.5c.
The group sells payment terminals, with a buoyant demand for its point of sales devices. The introduction of the newer Android system has enabling it to add additional features to its digital platform. These include items such as loyalty programs and pre-paid vouchers, amongst value added items for its customer base with banks and other financial institutions, as major client base.
Despite a components shortage the company was able to increase the uptake of terminals by 28% to 2,770,00 units, with revenue up by 34% to R831m. Around 65% of Capital Appreciations revenue was generated by this division.
The software division grew revenue by 33%, and has added new operations such Cloud, as Amazon Web Service consulting partners in Sub- Saharan Africa. They focus on sectors such as logistics and Healthcare, having achieved the requisite AWS certifications.
The group has a strong pipeline in all its businesses, into 2023, reflecting the ongoing post-pandemic spending a folks getting out to restaurants, bars and malls.
A strong balance sheet with cash of R530m, and strong cash generation of R204m, as well as a capital light business model are positive attributes of the company.
Capital Appreciation also has a highly experienced and motivated management team, with large shareholdings in the business. The potential for additional bolt-on acquisitions should also be a plus factor. The group has shown a consistent growth profile, since listing in 2017, and has recently opened an office in the Netherlands, to service its offshore operations.