06 December 2021
Highlights from the Interim results

As a team we were very excited with our interim results. Not only did they show our Group’s robust performance, but they also reflected a strong market demand for our innovative technology products and turnkey solutions.

Thanks to the acceleration of digitalisation, it may appear that Capital Appreciation was ‘at the right place at the right time’, however this is not the case, as we have been working tirelessly for many years on the products and services we offer, to position ourselves successfully for such a time as this.


The Payments division benefited from a strong pipeline of terminal orders, and experienced pleasing growth in terminal transaction income. It was exciting to see that terminal sales (for the current six months) exceeded 2021 full-year sales with the division growing its revenue by 46% in this period. The division experienced strong demand in the adoption of Android terminals, given their attractive functionality, price, and quality.


Looking at our software division, Synthesis also showed great results. The strong acceleration in the second quarter was obvious. The themes of cloud migration, emerging digital technology, and evolving forms of payments are accelerating, and Synthesis is well-positioned to deliver products and value propositions to support its clients’ journeys to becoming more digitally enabled. Our new business efforts have opened relationships with 19 new customers since the beginning of the financial year with a significant increase in cloud migration projects. The new office in Amsterdam contributed to growing international income and will allow the Group to capitalise on international opportunities and to further diversify its customer base.

Key new in-house developed payment software technology went live in the period, resulting in a pleasing 56% growth in value-added services revenue. Other new developments will allow Dashpay to roll out a Halo Dot-based Payment as a Service (PaaS) solution to the South African market, with the first merchants due to go live by February 2022.

The Halo Dot product’s recent certifications by Visa, Mastercard, and AMEX for PIN entry enable acceptance of high-value transactions, making Halo Dot a complete software alternative to physical POS devices. This is an exciting prospect for clients and, in partnership with DashPay, Synthesis also developed a SoftPOS App for Android devices that supports re-branding for customers who want their own SoftPOS application.

Start-up success

Capital Appreciation has invested R8.7 million for a stake in start-up LayUp Technologies with the right to increase its ownership over time. LayUp is Africa’s first fully digital Lay-By and recurring payments business and offers a digitised payment plan solution for retailers. The solution is available for e-commerce and in-store purchases.

Solution to socio-economic issue

The Group’s main Enterprise Development recipient, GovChat, has continued to strengthen its critical role as a partner to Government in engaging with its citizens. GovChat has recently signed a memorandum of understanding with the United Nations to capitalise on its 8.2 million active users and digital footprint across South Africa, to offer insights on the socio-economic issues faced by local citizens. The Synthesis team also developed the platform for GovChat to allow the second round of social relief grant applications as announced by the President in July 2021. More than 12.2 million applications for social grants have been received through the platform to date.

2022 and beyond

Looking ahead we are excited by our solid business pipeline across all businesses and due to scale benefits and operating efficiencies, this improved our operating margins.

Operating returns from the underlying businesses have met expectations and continue to grow. We remain a highly cash generative business. When it comes to our strong cash conversion, we expect this to continue, which is consistent to prior periods. Thanks to robust growth in sales, there is cash available for reinvestment of a little under R600 million as at 29 Nov21.

As we head toward the new year, we anticipate that digital transformation, as well as an acceleration in demand for electronic payments, cloud services, and related advances, will continue to support robust growth prospects for us. With a well-capitalised balance sheet, robust operating cash flows, and significant cash resources, the Group has the ability and appetite to take advantage of organic growth opportunities available to each of its business units as well as to consider fintech-related acquisitive opportunities.

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