Enhanced Investments - Financial Portal

Audited Summarised Consolidated Financial Results for the year ended 31 March 2023 and Cash Dividend Declaration

Published: 2023-06-06 08:05:41 ET

Capital Appreciation Limited
Incorporated in the Republic of South Africa
Registration number: 2014/253277/06
JSE share code: CTA     ISIN: ZAE000208245
"the Company" or "the Group"


AUDITED SUMMARISED CONSOLIDATED FINANCIAL RESULTS
FOR THE YEAR ENDED 31 MARCH 2023 AND CASH DIVIDEND DECLARATION

Operational features

-   Demand for Group's products and services unabated as corporate digitalisation continues
-   Further diversification of revenue streams, particularly strong growth outside South Africa
-   Continued growth in terminal estate, up 18% to 328 000
-   Strong growth in Payments' annuity income, up 24.1%
-   Expected credit loss provision raised of R70.8 million for loan to associate, GovChat, impacted on EPS and HEPS
-   Substantial investment into future revenue opportunities impacts short-term earnings
-   Continued good cash generation from operations
-   Successful integration of Responsive acquisition
-   Pending acquisition of the Dariel Group, post-year-end, will add new opportunities

Financial features
                                                                March   March          %
                                                                 2023    2022     change

Revenue                                     (R'million)        995.1    831.0       19.7
EBITDA                                      (R'million)        235.7    251.6       (6.3)
EBITDA margin                                       (%)         23.7     30.3   (660)bps
Operating profit                            (R'million)        193.0    211.8       (8.9)
Headline earnings                           (R'million)         91.5    163.7      (44.1)
EPS                                             (cents)         7.39    13.37      (44.7)
HEPS                                            (cents)         7.44    13.40      (44.5)
Annual dividend per share                       (cents)         8.25     7.50       10.0
Net asset value per share                       (cents)        121.1    120.6        0.4

Current year performance
Capital Appreciation has experienced continued robust demand for its products and services. The Software division generated significant revenue
growth and profits while the Payments division has performed satisfactorily compared to the record results of the prior year. The Group continued to
attract new high-profile local and international clients and evolved its revenue mix with the introduction of new products, services, and geographies.
Non-South African revenue now comprises 15.2% of Group revenue, from 6.6% 12 months ago. The diversification of revenue streams creates notable
growth opportunities for the Group. Growing pipelines in both divisions and positive momentum in customer engagements have provided the
impetus to invest in resources and research and development to position the Group optimally for expansion. As a result, the prospects
for the year ahead are promising. Capital Appreciation successfully integrated the Responsive group acquired in March 2022, and in April 2023,
announced the acquisition of Dariel Solutions Proprietary Limited.

Dividends
The Board has the pleasure of announcing that a final dividend of 4.00 cents per ordinary share has been declared for the year ended
31 March 2023 (2022: 3.75 cents per ordinary share), bringing the total dividend to 8.25 cents per ordinary share (2022: 7.50 cents per
ordinary share).

We note the following:

*   Dividends are subject to dividends withholding tax.
*   Dividends have been declared out of profits available for distribution.
*   Local dividends withholding tax is 20%.
*   The gross dividend amount is 4.00000 cents per ordinary share, which is 3.20000 cents per ordinary share net of withholding tax.
*   Capital Appreciation has 1 310 000 000 ordinary shares in issue at the declaration date.
*   Capital Appreciation's Income Tax Reference Number is 9591281176.

The salient dates relating to the dividend are as follows:

Last day of trade cum dividend            Tuesday, 27   June   2023
Shares commence trading ex-dividend     Wednesday, 28   June   2023
Dividend record date                       Friday, 30   June   2023
Dividend payment date                       Monday, 3   July   2023

Share certificates for ordinary shares may not be dematerialised or rematerialised between
Wednesday, 28 June 2023 and Friday, 30 June 2023, both days inclusive.

Short-form notice
The contents of this short-form announcement are the responsibility of the Board of Directors of the Company.
Shareholders are advised that this short- form announcement represents a brief summary of the information contained
in the full announcement, published on https://senspdf.jse.co.za/documents/2023/jse/isse/ctae/FY2023.pdf and Capital Appreciation's website
www.capitalappreciation.co.za. The full announcement is available for inspection at the registered office of the company during business
hours and at no charge. Investors and/or shareholders may request copies of the full announcement by contacting the Company Secretary,
details of whom are set out below.
Any forecast financial information contained in this announcement is the responsibility of the directors and has not been reviewed
or reported on by the external auditors.

Ernst & Young Inc., Capital Appreciation Limited's independent auditors have audited the consolidated financial statements of the Group,
which the summarised consolidated results have been derived from. The auditor also expressed an unmodified opinion on the consolidated
financial statements. The consolidated financial statements and auditor's report, including the key audit matter, are available on the
Company's website www.capitalappreciation.co.za.

The directors of Capital Appreciation take full responsibility for the preparation of this report and the financial
information has been correctly extracted from the underlying group financial statements.

Any investment decisions by investors and/or shareholders should be based on a consideration of the full announcement as a whole and
shareholders are encouraged to review the full announcement as directed above.

Signed on behalf of the Board

Michael Pinstein
Executive Chairman

Bradley Sacks
Chief Executive Officer

Alan Salomon
Chief Financial Officer

Sandton, 6 June 2023

Capital Appreciation Limited
"the Company" or "the Group", Incorporated in the Republic of South Africa
Registration number: 2014/253277/06 Registered office: Unit 2, 44 Saturn Crescent Linbro Business Park Sandton, Johannesburg, 2090
JSE share code: CTA
ISIN: ZAE000208245
Directors: MR Pimstein* (Executive Chairman), BJ Sacks* (Chief Executive Officer), AC Salomon* (Chief Financial Officer),
MB Shapiro*, B Bulo#, KD Dlamini# (Lead independent director), EM Kruger#, RT Maqache#, VM Sekese#, CL Valkin#

* Executive, #Non-executive

Company secretary: PKF Octagon: PeterKatz@PKFoctagon.com
Transfer secretaries: Computershare Investor Services (Proprietary) Limited
Sponsor: Investec Bank Limited
Auditor: Ernst & Young Inc.

Enhanced Investments, Inc.
329 South Oyster Bay Road #2085
Plainview, NY 11803
team@eninvs.com

Important disclosures

Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.

Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities.
Past performance is no guarantee of future results. Any historical returns, expected returns [or probability projections] are hypothetical in nature and may not reflect actual future performance.
All the strategies assume investments in equity invstrumenta only and are more relevant for "agressive investment profile". Eastern European flagship strategy assumes using up to 20% leverage of total portfolio. GlobalCommodities and US Growth strategy currently assume no leverage.
Results for the Enhanced Investments strategies as compared to the performance of Illustrative Benchmarks is for informational purposes only. Our investment program does not mirror that of the Illustrative Benchmarks and the volatility may be materially different from the volatility of Illustrative Benchmarks. Reference or comparison to an Illustrative Benchmark does not imply that strategies of Enhanced Investments will be constructed in the same way as the Illustrative Benchmark or achieve returns, volatility, or other results similar to those of the Illustrative Benchmark. The S&P 500 is an unmanaged market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.
Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.