Big rebound for South African fintech company

Fintech group Capital Appreciation announced strong results for its 2025 financial year, as a strong second-half performance offset a weaker first half.

Capital Appreciation is a financial technology company that facilitates the provision of fintech platforms. It focuses on investing in and growing businesses that deliver compelling and disruptive solutions to financial institutions and other enterprise clients.

The company released its results for the year ended 31 March 2025 on Tuesday, 24 June, which revealed a strong performance. 

In the first half of the 2025 financial year, Capital Appreciation suffered a significant setback as its software division came under pressure.

However, the company reported a marked recovery in the second half, with significant growth in revenue, earnings and profit.

The group said that its businesses demonstrated resilience in the face of a challenging economic environment by growing revenue and managing expenses effectively. 

Capital Appreciation’s gross revenues increased by 7.6% to R1.25 billion in the period, while EBITDA jumped by 23.3% to R333.9 million. 

The company’s earnings per share increased by 25.8%, to 17.58 cents, and headline earnings per share followed suit, growing by 25.6% to 17.57 cents per share. 

Both its Payments and Software divisions attracted new clients in the period, initiated new projects with existing clients, and renewed long-term contracts. 

The Payments division, in particular, strengthened its position as a leading operator of payment infrastructure in South Africa by successfully executing its growth initiatives. 

Payments revenue increased by 21.5% to R689.2 million, mainly driven by terminal sales (up 41.1%), an expanding terminal rental portfolio (up 15.3%), and transaction-related income (up 18.6%).

This division’s EBITDA grew by 25.4% to R297.8 million. Terminal in the hands of customers increased by 18.8% to 424,000, buoyed by two multi-year contracts secured in the first half of the 2025 financial year.

The company said these contracts are expected to support terminal estate growth over their three- to five-year terms. 

However, Capital Appreciation noted that its Software division’s financial performance continued to struggle, as it was hindered by bench overcapacity.

It said trading conditions for the Software division remained challenging, as they were buffeted by the cost and capital expenditure concerns of major clients, as well as continued delays in new project starts. 

Revenue for this division declined by 7.6% to R549.0 million, and its EBITDA by 31.8% to R61.3 million. 

However, the company said this division finished the year stronger than it began. 

“There are tangible signs of recovery, with an improving sales pipeline and renewal of several long-term contracts, which positions it better for FY26,” the company said. 

It added that remediation plans for this division are starting to take effect, improving cost management, efficiency and financial performance.

In the meantime, the group continued to invest in growth-related initiatives, including leased terminals in Payments and product development in Software. It said this diversification and organic expansion create significant opportunities for future growth.

“Capital Appreciation’s businesses are well-positioned, and the prospects are very encouraging,” CEO Bradley Sacks said. 

“With the pace of technological advances and the digital transformation needs evident throughout the economy, we anticipate that the current prospective pipeline will transform positively as business confidence and economic activity gather momentum.” 

Sacks pointed out that Capital Appreciation generated considerable cash during the period and maintains a robust, debt-free balance sheet with ample cash available to support growth. 

The group declared a final dividend of 7.50 cents, up 30.4%. This brings the total dividend for the year to 12.00 cents per share, representing a 20.0% increase over the prior year.