EasyEquities: A tough gig, but the band plays on
Purple Group’s simple-to-use investing platform is rocking, although shareholders still await break-even
There is still some way to go before specialist financial services provider Purple Group can claim sustained profitability. But some heart can be taken from the fact that its growth engine EasyEquities – which is nobly premised on bringing investment options to all South Africans – is revving high.
In the six months to end-February, EasyEquities revenue increased by 53.9% with platform assets growing by more than a third to R3.85bn. Even more encouraging is that funded investment accounts increased by 58.5% to 92,731 accounts – not bad at a time when ordinary investors might well be spooked by regular upheavals at JSE-listed companies.
Purple’s RISE platform has also been appointed as the fund administrator and investment manager of five retirement funds with assets under management of around R4.2bn. These funds were only brought aboard after the close of the interim period – and would have meant a marked boost to platform assets.
The stark reality is that despite this progress EasyEquities remains sub-scale. A divisional breakdown showed a mere R11m at the revenue line – which did not come close to accommodating the operating expenses of R24m.
The R12m loss incurred by EasyEquities is slightly lower than the corresponding interim period in 2018 – but shareholders might have to wait until the 2020 financial year to see anything near break-even.Cash on hand still sits around R95m – but this does represent burn from the more reassuring R227m that was reflected in the interim period last year.This looks an awfully tough gig …