July 17, 2023


We always assume that fintech gems are all on the NASDAQ. We have our very own gem right here on the JSE.


Capital Appreciation (Im going to call it CTA) is a financial technology company that seeks to serve financial institutions and other clients. The company facilitates the provision of financial services and delivers innovative technologies and solutions. CTA is focused on investing in businesses that deliver compelling, innovative, and disruptive solutions to financial institutions and other clients, allowing them to develop and introduce new products, deliver value to their customers, and improve efficiency, while controlling and eliminating unnecessary operating costs.


Both CTA and its clients are well capitalised. CTA has a diversified customer base and revenue streams and will continue to diversify even further, having elected to enter some new sectors such as retail, healthcare and telecommunication, as well as new geographies, with an office that opened in Amsterdam in September 2021.


The business is distinctly divided into two divisions servicing blue chip clients throughout South Africa:

  1. Payments & Payment Infrastructure
  2. Software & Services



This division Operates and manages infrastructure, networks and systems. At last reporting date the business had more than 217 000 terminals in hands of clients and a strong pipeline post year end.


In South Africa, more than 70% of transactions are settled in cash, with over 60 billion cash transactions per year, which presents a significant opportunity for digitalisation considering that there are more than 50 million debit and credit cards in issue. CTA envisages a market opportunity of more than 800 000 payment acceptance devices in South Africa alone, with many more across Africa. CTA has and will continue to position itself to capitalise on these trends and pursue the opportunities diligently.



Synthesis is a specialised software development and consulting company led by business and technology experts. Synthesis creates solutions based on its in-depth understanding of software, business, and leading technology


It is uniquely positioned in Africa as an Amazon Web Services (AWS) Advanced Consulting Partner. It is the partner of choice to pioneer innovation and competitiveness, and the company of choice that top technologists call home.


Synthesis is recognised for creating strategic solutions and driving digital journeys for banking, financial services, retail, and healthcare institutions in South Africa, Africa, Mauritius, and the Asia Pacific regions.



First and foremost, the company boasts very strong results. I am attaching the September 2021 results.

  • Revenue up 36%
  • Profits up 67%
  • Earnings per share up 67%
  • Dividend yield of 4%
  • Cash R446m
  • Debt = zero


CTA grows through acquisitions and their growth story has only just begun. In March 2022 they announced the acquisition of Responsive Group, a business who designs and develops digital applications (apps) for clients in several countries, especially in the financial services industry.


The company also has a strong partnership with the government through GovChat, a technology platform that has the data of 13 million welfare applicants in South Africa. CTA has signed a memorandum of understanding with the UN to offer insights into socioeconomic issues faced by local citizens. I love companies that do social good and has strong ties with government. Something to note is that the PIC owns 25% of CTA. Where public information is at stake, you can be rest assured the government will have a stake. Personally, I like a bit of government ownership. The take care of their own (dont quote me okay).


The Group continues to grow domestically and internationally It continues to invest time and energy in projects, adopting a deliberate approach designed to yield attractive risk adjusted returns.


I suggest you add this one to your Watchlist and watch it closely


Related Tags:
3 min read
Share this article:

Related Articles

All articles