22 Jun - 5 min read

Summarised consolidated financial results and cash dividend declaration for the year ended 31 March 2021

Summarised consolidated financial results and cash dividend declaration for the year ended 31 March 2021

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


Summarised consolidated financial results and cash dividend declaration 
for the year ended 31 March 2021


Operational
  -  COVID impact delayed clients' decisions on projects and
     new terminal orders
  -  Terminals in the hands of customers grew to 217 000,
     representing 17% growth year-on-year
  -  Good traction with the introduction of Android terminals
  -  Strong acceleration in Synthesis' annuity income
  -  Accelerating digitalisation intensifies demand for the
     Group's services
  -  Positive growth in business pipeline
  -  Significant reduction in interest income due to 300 bps
     interest rate cuts

Financial
                                                   2021          2020    % change
Revenue (R'million)                               619.5         701.2      (11.7%)
Trading profit (R'million)                     186.9(3)      206.1(2)       (9.3%)
EBITDA (R'million)                             172.9(3)      204.7(2)      (15.5%)
EPS (cents)                                    10.28(3)    11.24(1,2)       (8.5%)
HEPS (cents)                                   10.34(3)    10.67(1,2)       (3.1%)
Cash flow from operations (R'million)             200.9         206.1       (2.5%)
Annual dividend (cents)                            5.50          5.00         10%
Net asset value (cents)                           111.9         109.0        2.6%
Cash available for reinvestment (R'million)       538.3         505.1        6.6%
  
(1) Includes a R17.7 million advantage in interest income earned in 2020, 
    due to the repo rate being 300 bps higher during the comparative year
(2) Includes an unrealised R14.6 million mark-to-market foreign exchange gain and 
    an R8.7 million profit on the disposal of our investment in Resonance Australia 
    in the 2020 financial year.
(3) Includes an unrealised R1.2 million mark-to-market foreign exchange loss in 2021

Current year performance

Capital Appreciation continued to grow its client base of blue-chip institutions 
in the financial,retail, and healthcare sectors. It also gained strong tractionin 
the roll-out of its Android platforms and accelerated its annuity income. The generally
adverse economic conditions and the consequential financial ramifications related to 
the COVID pandemic delayed investments by our clients and induced a level of caution 
in their decision making for the commencement of large-scale projects. COVID-19 also 
caused delays in deliveries from our international suppliers. There has been a welcome 
recovery in the levels of Group business activity since the beginning of the 2021 calendar
year, including new terminal sales. The escalating demand for digital, cloud-based and data 
services is creating numerous opportunities for Synthesis. The Group's geographic diversification 
plans are progressing and cash generation remains strong.

Dividends

The Board has pleasure in announcing that a final dividend of 3.00 cents has been declared 
(2020:2.75 cents per ordinary share), bringing the total dividend for the year to 5.50 cents 
per share (2020: 5.00 cents).

We note the following:
  -  Dividends are subject to dividends withholding tax.
  -  The payment date for the dividend is Monday, 
     12 July 2021.
  -  Dividends have been declared out of profits
     available for distribution.
  -  Local dividends withholding tax is 20%.
  -  Gross dividend amount is 3.00 cents per ordinary
     share, which is 2.40 cents per ordinary share net
     of withholding tax.
  -  Capital Appreciation Limited has 1 310 000 000
     ordinary shares in issue at the declaration date.
  -  Capital Appreciation Limited's Income Tax
     Reference Number is 9591281176.

The salient dates relating to the dividend are as follows:

Last day of trade cum dividend                 Tuesday, 6 July 2021
Shares commence trading ex-dividend          Wednesday, 7 July 2021
Dividend record date                            Friday, 9 July 2021
Dividend payment date                          Monday, 12 July 2021

Share certificates for ordinary shares may not be
dematerialised or rematerialised between Wednesday,
7 July 2021 and Friday, 9 July 2021, both days inclusive.

Short-form notice

The contents of this short-form announcement are the responsibility
of the Board of directors of the Company and has not been reviewed
or audited by the Group's auditors. 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/2021/jse/isse/ctae/FY2021.pdf
and on the Group'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 key audit matters, 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 audited 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 (Motty) Sacks             Michael Pimstein
Chairman                          Joint Chief Executive Officer

Alan Salomon                      Bradley Sacks
Chief Financial Officer           Joint Chief Executive Officer

Johannesburg, 22 June 2021

Registered office: 
1st Floor, 61 Katherine Street, Sandton, 2196

Directors: 
MI Sacks# (Chairman), MR Pimstein* (Joint Chief Executive), 
BJ Sacks* (Joint Chief Executive), AC Salomon* (Chief Financial Officer), 
MB Shapiro*, B Bulo#, KD Dlamini#, JM Kahn#,
EM Kruger#, RT Maqache#, R Morar#, 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

Date: 22-06-2021 07:05:00
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