Capital Appreciation: Fintech Infrastructure That’s Quietly Scaling

If you’re interested in fintech infrastructure, recurring income streams, and high-growth potential wrapped in a scalable SA-based company, you may want to check out EasyAssetManagement's report on Capital Appreciation.

Summary

• Capital Appreciation grew headline earnings by 25.2% to R206.9 million and EBITDA by 23.3% to R333.9 million, highlighting a strong operational performance driven by its fast-growing Payments division and disciplined cost management.
  
  

• The Payments business delivered 21.5% revenue growth and now supports over 424,000 deployed card terminals, thanks to new bank partnerships, increasing mobile payments adoption, and rising annuity-based income.
  
  

• With R402.3 million in cash and no meaningful debt, Capital Appreciation is well-capitalised to reinvest in tech innovation, global expansion, and future-proofing its fintech infrastructure across South Africa and Europe.

Capital Appreciation isn’t the flashiest stock on the JSE, but behind the scenes, it’s powering a huge part of South Africa’s digital payments and financial software ecosystem. Whether you’re tapping your card at a small café or onboarding through a banking app, chances are, one of CTA’s platforms helped make it happen.

 What Does Capital Appreciation Do?

Capital Appreciation is a fintech investment group made up of two main engines:

• Payments: This is the main growth driver. African Resonance provides card machines and support to banks and retailers. Dashpay builds and provides digital payment technology for businesses, especially small to medium merchants, offering smart, secure, and flexible tools like POS terminals and tap-on-phone app. LayUp offers a digital lay-by system, letting shoppers pay in interest-free instalments. Halo Dot turns Android phones into tap-to-pay devices, no card machine needed.
  
  
• Software: CTA’s Software division builds advanced tech for banks, insurers, and large enterprises. Synthesis leads with cloud-native platforms, regulatory tools, and AWS-powered solutions for financial institutions and other enterprise clients. Responsive creates UX-driven digital products, web and mobile apps, for global clients using design thinking. Dariel develops complex enterprise software across sectors like healthcare, telecoms, and fintech. Strategic stakes in Regal Digital (Web3 and Firebase CMS) and AssetPool (cloud-based asset tracking in 30+ countries) extend CTA’s reach into emerging technologies and global markets.

Source: Capital Appreciation Results Presentation FY2025

FY25: A Solid Set of Numbers

Source: CTA Results Booklet FY2025

Despite some headwinds in its Software division, Capital Appreciation delivered a strong performance for the year ending March 2025:

• Revenue: R1.26 billion (+7.6%)
• Headline earnings: R206.9 million (+25.2%)
• HEPS: 17.57 cents (+25.6%)
• EBITDA: R333.9 million (+23.3%)
• Cash Available for Reinvestment: R402.3 million

The business is profitable, scalable, and well capitalised positioning it to keep growing while investing in new tech and markets.

Segment Breakdown

Payments

This division handles all things card terminals, and payment tech. It’s also where CTA sees the biggest growth and margin.

• FY25 revenue: R689.2 million (+21.5%)
• EBITDA: R297.8 million (+25.4%)
• Terminals estate: 424,000 (+18.8%)

Recent wins include multi-year contracts with major banks, a rise in annuity-based income, and increased adoption of CTA’s mobile payment apps. The Payments division has strong momentum heading into the coming years, with solid long-term prospects. Two multi-year contracts are expected to grow in significance. Key industry developments like the SARB’s Payments Ecosystem Modernisation project will drive innovation through tech upgrades and expanded digital payment services. Additionally, ICASA’s planned shutdown of 2G and 3G networks by 2027 will spur major reinvestment in POS terminal infrastructure across South Africa, boosting demand for modern payment solutions.

Source: Capital Appreciation Results Presentation FY2025

Software

CTA’s software business delivers cloud consulting, digital banking tools, AI platforms, and enterprise software. Think backend banking engines, mobile apps, and regulatory systems.

However, the Software division had a tough year. Delayed projects, cost-conscious clients, and unutilised teams hurt performance.

• FY25 revenue: R549 million
• EBITDA: R61.3 million (down 31.8%)

Still, there are green shoots:

• Licence revenue jumped thanks to the addition of a multi-year licence by a major banking institution, which accounted for a once-off fee of R42 million.
• The sales pipeline is improving.
• Long-term contracts are being renewed.

CTA is cutting costs, consolidating teams, and betting on recurring licence income from its own IP. It’s not out of the woods yet—but FY26 could bring a rebound if these plans and pipelines pay off.

Source: Capital Appreciation Results Presentation FY2025

International

CTA’s International division is still in its developmental stage. International revenue fell 38% to R84.6 million after a major contract ended. But CTA is investing in Europe and expanding via Synthesis Europe B.V., which landed new clients in the Netherlands and UK.

By blending South African talent with a lean European team, they’re delivering projects efficiently and building a strong base for future growth.

Source: Capital Appreciation Results Presentation FY2025

Strategic Focus: Payments In, Software Optionality

CTA’s strategy is clear: continue to support the Payments division, which is highly profitable and growing predictably. At the same time, the Software division offers optionality, if managements can effectively execute its strategy to restructure the division and monetise its IP better, it could unlock a new layer of profit.

The Outlook

The fundamentals are solid: Capital Appreciation effectively has no debt, strong margins, and structural tailwinds from fintech adoption, financial inclusion, and AI innovation and implementation.

With the Payments division continuing to scale and the Software business undergoing plans of being restructured and improved, CTA is entering FY26 with a potentially promising path forward. If management executes well on Software, and Payments keeps compounding, CTA could shift from a solid fintech to a seriously compelling one.

EasyAssetMangement is actively monitoring Capital Appreciation in line with our EasyETFs Balanced Actively Managed ETF Strategy. If you are looking for exposure to global or AI themed equities check out our EasyETFs Global Equity Actively Managed ETF and our EasyETFs AI World Actively Managed ETF

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