PURPLE Group yesterday delivered double-digit interim earnings with headlines earnings up nearly 92 percent as chief executive Charles Savage announced it had acquired the remaining 49 percent in EasyCrypto, which “may well be the hottest investment sector globally”.
The financial services company owns the online platforms EasyEquities, EasyProperties, EasyCrypto and GT247.com. Its EasyEquities platform, started in 2014, allows investors to buy fractional ownership of shares listed on the JSE and the New York Stock Exchange.
Of note, Savage also said he believed that the benefits of further group alignment around a single brand, strategy and distribution base would benefit all stakeholders markedly in other businesses, which could become wholly-owned.
The share was down 4.48 percent at R2.77 in late afternoon trade; however, the counter has risen 171 percent in a year, and 934 percent in three years.
For the six months to end February 2022, Purple grew its basic and headline earnings per share 91.8 percent, from 0.85 cents to 1.63c. Revenue increased by 36 percent to R137 million.
The firm’s net asset value per share increased by 11.9 percent to 35.56 cents, while profit attributable to shareholders increased by 114.2 percent to R17.7m, compared to a profit of R8.3m in the prior comparative period.
However, the group said its costs had increased by 39.7 percent to R93 million, but the operating cost per invested EasyEquities client decreased by 24.7 percent to R80 per client, compared to the prior comparative period.
Savage said revenue per EasyEquities' customer had returned to pre-Covid levels, which had partly offset the impact of the 86 percent increase in funded investment accounts and 36 percent increase in platform assets.
The EasyEquities group generated a profit after tax of R23.3m, an increase of 4.3 from the prior comparative period, while the platform’s revenue increased by 27.9 percent to R108.7m. This as funded retail investment accounts rose by 85.9 percent to 966 299 accounts, while the platform’s assets increased by 36 percent to R36.5 billion.
“Going forward, we expect that revenue would track the underlying fundamental drivers of the group more closely,“ he added.
Purple flagged that the contribution of RISE, a joint-venture partnership between EasyEquities and NBC Fund Administration Services that focuses on savings and retirement, to profit after tax of the EasyEquities increased by 601.5 percent to R3.4m.
Meanwhile, EasyCrypto contributed R4.5m to profit after tax of EasyEquities. Purple said it had acquired the remaining 49 percent of EasyCrypto, effective March 1, 2022.
“Crypto may well be the hottest investment sector globally and I am excited by the prospects of this business and its ability to create significant shareholder value in the years ahead,“ Savage said.
Michael Jordaan, a business leader and former chief executive of First National Bank, said on twitter @MichaelJordaan, “Delighted that Purple Group has acquired the remaining 49% of EasyCrypto. Fully agree with @CharlesHSavage that this R575m AUM business will grow even faster now that it is fully aligned with the Group strategy. ”
Purple managed to lift GT247.com's revenue by 98 percent to R25.9m compared to the prior comparative period as it generated a profit after tax of R4.9 million – an improvement of 250.5 percent.
Looking ahead, Savage said Purple continued to scale resources to build capacity to meet growth opportunities, “which keep coming at us”.
“Not unexpectedly, planned initiatives to accelerate this scaling, specifically raising additional growth capital and hiring in senior executives, is taking longer than anticipated, but we want to get it right,” he added.
He said Nicola Comninos as chief risk officer and Rish Tandapany as chief operating officer would join Purple in the months ahead.
philippa.larkin@inl.co.za
BUSINESS REPORT ONLINE