Wrap Text
Audited consolidated annual financial results for the year ended 31 August 2024
PURPLE GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013637/06)
Share code: PPE ISIN: ZAE000185526
("Purple Group" or "the Company" or "the Group")
AUDITED CONSOLIDATED ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 AUGUST 2024
Group highlights
- Group revenue increased by 45.1% to R400.4 million in the current year, from R276.1 million in the prior year;
- Operating expenses increased by 7.6% to R301.4 million in the current year, compared to R280.2 million in the prior year;
- Group profit before fair value & impairment adjustments & tax increased from a loss of R49.0 million to a profit of R51.8 million
in the current year, an improvement of 205.7%;
- Group headline earnings per share increased by 186.3% to 1.77 cents in the current year compared to a headline loss of 2.05 cents per
share in the prior year;
- Group basic earnings per share increased by 193.2% to 1.77 cents compared to a basic loss of 1.90 cents per share in the prior year;
- Profit attributable to ordinary shareholders amounted to R24.8 million in the current year compared to an attributable
loss of R24.9 million in the prior year, an increase of 199.7%; and
- The Group's net asset value per share increased by 4.0% from 40.80 cents in the prior year to 42.45 cents in the current year.
Easy GROUP Highlights
- Easy Group revenue increased by 51.5% to R360.2 million in the current year, from R237.8 million in the prior year;
- Easy Group operating expenses increased by 10.6% to R266.7 million in the current year compared to R241.2 million in the prior year;
- Easy Group profit after tax increased by 234.9% to R45.0 million in the current year compared to a loss after tax of R33.4 million
in the prior year;
- Active clients increased by 10.4% to 991,320 in the current year, compared to 897,940 in the prior year;
- Client assets increased by 24.8% to R58.2 billion in the current year, compared to R46.6 billion in the prior year;
- Registered clients increased by 11.0% from 2.06 million in the prior year to 2.29 million in the current year;
- Retail inflows increased by 27.2% to R7.5 billion in the current year, compared to R5.9 billion in the prior year;
- Retail revenue increased by 67.2% to R240.6 million in the current year compared to R143.9 million in the prior year; and
- Non activity-based revenue increased by 65.7% to R206.4 million in the current year compared to R124.6 million in the
prior year.
LETTER FROM THE CEO
DEAR STAKEHOLDERS,
Reflecting on this past year fills me with immense pride and an enhanced sense of excitement. Purple Group has spent a decade breaking
down barriers, opening doors, and re-imagining what's possible for all investors. As we close out a transformative year, I'm reminded of
how far we've come and of the bold path ahead. In 2024, Purple Group didn't just sustain growth; we unlocked new realms of opportunity,
setting records and scaling the impact of our platform.
Our vision has always been to make investing easy, accessible, and empowering for everyone. This year, we've seen that vision come to
life in ways that reaffirm our mission and deepen our commitment to democratising finance for millions.
A DECADE OF DEFYING LIMITS AND CREATING VALUE
Since the launch of EasyEquities in 2014, we have focused relentlessly on democratising the financial system, making investing simple
and accessible for everyone. Today, with over R58.2 billion in assets, a substantial increase from R46.6 billion last year, and a
revenue climb of 45.1% to R400.4 million, we are seeing the full effect of the trust placed in us by our clients, partners, and investors.
Over the past 10 years, our annual growth rates have consistently defied expectations, and these figures testify to the value we bring
to our clients and shareholders alike.
These numbers are more than financial milestones; they represent real-world impact. We're enabling everyday South Africans and a growing
international community to actively participate in the wealth-building process, and that's a legacy we are determined to expand.
Year on year value added from August 2023 to August 2024:
- Client assets increased by 24.8% to R58.2 billion (5 year CAGR: 45.4%)
- Active retail clients increased by 10.4% to 991,320 (5 year CAGR: 66.4%)
- Easy Group Revenue increased by 51.5% to 360.2 million (5 year CAGR: 54.6%)
- Cost to serve increased by 1.9% to R173 per client (5 year CAGR: decrease of 23.3% p.a.)
- Cost of acquisition increased by 14.3% to R110 (over a 5-year period, 914k clients acquired at R72 per client).
RECORD-BREAKING MOMENTUM AND SUSTAINED GROWTH
Our momentum throughout this year has been nothing short of extraordinary. Reflecting on our half-year results, we set ambitious goals,
and I'm thrilled to say we've exceeded them. By year-end, we achieved a profit before tax and fair value adjustments of R51.8 million,
a dramatic turnaround from last year's losses. Our client base has now surpassed the 1-million mark (as of October 2024), signalling
that we're more than a platform; we're a trusted partner in our clients' financial journeys.
Our revenue-to-asset ratio climbed to 0.70% from 0.57%, indicating the efficiency with which we convert asset growth into sustainable income.
This ratio speaks volumes about our scalable model, one that continues to perform as our assets under management grow.
DEPOSIT GROWTH AS A CORE METRIC OF PLATFORM HEALTH
Deposits have always been a powerful indicator of platform health, and this year, we've seen record-breaking numbers. Deposits grew over 25%
year-on-year, a strong testament to client trust and engagement. From February through our August year-end, every month set a new record
relative to the same month in previous years. This momentum has continued post-year-end, with August achieving an all-time record deposit
level of over R1.3 billion. These deposits reflect the resilience of our client community and set us up for even more robust performance
as interest rates begin to ease.
We are committed to nurturing this growth by continuously optimising the client experience and delivering value in every interaction.
INNOVATION: THE LIFEBLOOD OF PURPLE GROUP
Innovation is at the core of Purple Group, and in 2024, we took significant steps to elevate our offerings. This year, we launched
EasyApp 3.0 and introduced EasyAI Baskets. These upgrades were designed to make investing more engaging, intuitive, and personalised,
enhancing client satisfaction and experience.
Our loyalty programme, Thrive, has also evolved, becoming a vital driver of engagement and retention. Thrive is more than a rewards programme;
it's a platform for learning, growth, and financial empowerment. By aligning rewards with client engagement, we're not just enhancing loyalty,
but actively promoting better financial habits. We're excited about the potential Thrive has to deepen our relationships with clients and increase
long-term platform engagement.
- 658% increase in number of clients receiving the Thrive brokerage benefit year on year.
- 2 536% increase in value of Thrive brokerage benefit received by clients year on year.
EXPANDING OUR PRODUCT SUITE TO MEET EVOLVING CLIENT NEEDS
Our expanding product line-up is designed to meet the diverse needs of our clients, from new investors to seasoned traders. In 2024, we introduced
EasyBonds and EasyTrader, both of which have broadened the paths our clients can take to build diversified, goal-driven portfolios.
- EasyBonds
Providing clients a reliable entry into South African Government Bond investing, providing stable options within our growing ecosystem.
Uniquely available across all our Rand denominated accounts.
- EasyTrader
Leveraging GT247's expertise, is designed for our most active clients who demand sophisticated trading tools. With more than 5% of our clients
displaying advanced trading behaviours, EasyTrader meets their needs with a tailored experience.
By providing these products, we enable our clients to engage with a range of asset classes, seamlessly integrated into our platform. ETFs,
for instance, now account for over 30% of platform assets, demonstrating the demand for accessible, managed investment options.
The EasyETFs platform, fully integrated with Thrive for zero-brokerage investing, is gaining traction, and we anticipate even more engagement
as our marketing efforts expand.
OPERATIONAL EXCELLENCE: GROWTH WITH PRECISION
One of our primary achievements this year has been our ability to grow while maintaining financial discipline. Despite rapid revenue growth,
operating expenses rose by only 7.6%. Our cost-to-serve per client saw only a slight increase, demonstrating our focus on cost efficiency and
smart resource allocation. This discipline has allowed us to reinvest in our platform, from technological upgrades to customer service
enhancements, without compromising profitability.
We continued to further enhance operational efficiency through AI integration. AI offers transformative potential across our operations,
from automating client support to enhancing data-driven decision-making. As these systems mature, we expect further improvements in efficiency,
ultimately driving profitability and scalability.
STRATEGIC PARTNERSHIPS: FUELLING GROWTH AND GLOBAL REACH
Partnerships have been a game-changer for Purple Group. Collaborations with industry leaders like Satrix, Capitec, Discovery, Telkom, and Ayoba
have broadened our reach, integrating Purple Group's services into larger ecosystems where millions of clients can engage with investment
opportunities seamlessly. Each partnership strengthens our platform's value, enhancing client experience and accelerating client acquisition.
Internationally, we're making strategic progress in Kenya and the Philippines, with regulatory processes advancing. While South Africa remains
our core focus, we are committed to expanding Purple Group's footprint globally. These regions represent significant growth opportunities,
and we're laying the groundwork to meet demand with the same client-centric approach that has driven our success domestically.
STRATEGIC PRIORITIES FOR GROWTH IN 2025
Looking forward, our core strategic focus remains centred on scaling and securing our platform, deepening partnerships,
and refining client engagement. This focus necessitates attention in three key areas:
1. Removing Friction in Growth Execution:
To keep pace with rapid growth, we are streamlining processes to improve execution speed and efficiency across all levels of the organisation.
2. Enhancing Client Engagement:
We're actively addressing client pain points to ensure a seamless experience across all interactions with our platforms, products, and services.
3. Scaling Leadership Capacity:
As we look ahead to our next decade of growth, we are investing in leadership to support and sustain our growth trajectory.
NEW PRODUCT INITIATIVES TO DRIVE FUTURE GROWTH
We're launching new products in 2025 to build on this year's achievements and meet client demand:
- EasyRetire
Partnering with independent advisors, EasyRetire Retail will provide a simplified, scalable platform for advisors to grow
their clients, assets, and revenue, removing regulatory and operational complexity.
- EasySubscriptions
By bundling products to fit different client profiles, EasySubscriptions will make it easier, more affordable, and more
rewarding for clients to engage with multiple offerings on our platform.
- EasyMortgages
Designed to address property investment financing needs, EasyMortgages will expand our client service suite,
positioning Purple Group as a comprehensive partner in wealth-building.
Additionally, two refined products - EasyProtect Life 2.0 and EasyCredit 2.0 - are poised to add further value. These
products incorporate extensive client feedback and we anticipate strong engagement as we enhance benefits like
premium affordability, broader age eligibility, and loyalty-based interest rate adjustments.
A PROMISING FUTURE, POWERED BY ECONOMIC TAILWINDS
The economic backdrop for 2025 is set to support our growth. With interest rates beginning to ease and investment sentiment improving locally
and globally, Purple Group is positioned to capture these tailwinds. Our platform's capacity to thrive in varying conditions demonstrates our resilience,
and we're confident in our ability to expand impact, grow revenue and deliver value across every metric.
WITH BOUNDLESS GRATITUDE
To our team, partners, and clients: thank you for your unwavering trust, commitment and shared vision. Together, we're building a legacy
that goes beyond numbers - a legacy that's reshaping finance and uplifting the wealth of communities we serve.
This first decade has shown us what's possible and as we look to the next, it's clear we're only just beginning.
Here's to the journey ahead, the next decade and the limitless potential that lies before us. Let's continue pushing forward with purpose,
passion and the shared belief that we're transforming finance for the better, one investor at a time.
Take it easy,
Charles Savage
Chief Executive Officer, Purple Group
26 November 2024
This short-form announcement is the responsibility of the directors and is only a summary of the information in the
audited consolidated financial statements and does not contain full or complete details. Any investment decision should
be based on the audited consolidated financial statements which are available on our website at
https://www.purplegroup.co.za/our-financials.html or at https://senspdf.jse.co.za/documents/2024/jse/isse/PPE/PPE2024.pdf.
The separate financial statements of Purple Group Limited are also available on our website:
https://www.purplegroup.co.za/our-financials.html. The annual results for the year ended 31 August 2024, from which this announcement
is extracted, have been audited by the Company's auditors, BDO South Africa Incorporated, who expressed an unmodified audit opinion
thereon. The audit opinion is available, along with the audited consolidated financial statements, on the Company's website at
https://www.purplegroup.co.za/our-financials.html. This announcement is not itself audited. Any forward-looking statement has not been
reviewed or reported on by the Company's external auditors. Executive directors: Charles Savage (Chief Executive Officer), Gary van Dyk
(Chief Financial Officer). Non-executive directors: Happy Ntshingila* (Chairman), Arnold Forman*, Craig Carter*, William Bassie Maisela*,
Bonang Mohale, Mark Barnes, Paul Rutherford (*Independent). Company Secretary: CTSE Registry Services Proprietary Limited. Registered office:
1F, 173 Oxford Road, Rosebank, Johannesburg, 2196.PO Box 411449, Craighall, 2024. Auditors: BDO South Africa Incorporated, Registered Auditors,
Wanderers Office Park, 52 Corlett Drive, Illovo, 2196. Share registrars: CTSE Registry Services Proprietary Limited.
Sponsors: Deloitte and Touche Sponsor Services Proprietary Limited. Deloitte, 5 Magwa Crescent, Waterfall City, Midrand, 2090.
Date: 26-11-2024 09:00:00
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