Purple Group goes for scale as platform assets top R36bn

The game is building client numbers and staking out niche markets.
Charles Savage, CEO Purple Group. Image: Moneyweb

Purple Group, owner of investment brands such as EasyEquities, Emperor Asset Management, EasyProperties and EasyCrypto, has achieved some enviable stats in the SA investment space.

CEO Charles Savage told Moneyweb in February that EasyEquities had 1.4 million registered accounts and 750 000 active users.

Acquiring new customers is the name of the game, and Savage had more good news in Monday’s financial results release for the six months ended February 2022.

New partnerships with Discovery Bank and Telkom will roll out in the second half of the year, with more international partnerships in the wings, and business startups now gaining momentum in Kenya and the Philippines.

Getting the first one million clients was the hard part. Getting these numbers to two million should be quite a bit easier.

Over the last six months, EasyEquities’ funded retail investment accounts increased by an astonishing 85.9% to 966 299 accounts. These are extraordinary figures, but they are not unusual for investment companies as DIY investment and financial self-reliance are an emerging theme internationally.

Read: Revisiting EasyEquities’ fair value

These numbers make it possible to ramp up platform assets, and hence fees, while driving down the costs of onboarding new customers.

Half-year results

That’s already evident in the latest half year results. Operating expenses per invested client fell by nearly 25% to R80 compared to the previous period, while acquisition and onboarding costs for new clients also fell.

It’s no wonder that it purchased the remaining 49% in EasyCrypto in March this year.

“Crypto may well be the hottest investment sector globally and I am excited by the prospects of this business and its ability to create significant shareholder value in the years ahead,” says Savage in the commentary accompanying the release of the latest interim financial results.

The rate of growth in the crypto business should pick up now that it is aligned with the group’s other businesses. This is the kind of client list crypto startups dream of.

Being able to plug into more than one million potential crypto investors makes this a business to watch in the months and years ahead. No one in SA has that kind of head start.

EasyEquities’ revenue increased 27.9% to R108.7 million, as clients’ portfolio turnover activity show signs of returning to normalised levels after the two-year Covid disruption. Overall, platform assets increased by 36% to R36.5 billion.

Spread betting subsidiary GT247.com’s revenue virtually doubled to R25.9 million for the period, with an after-tax profit of R4.9 million, against a loss of R3.3 million for the previous comparable period.

EasyProperties grew revenue 146% with the number of active invested clients now close to 60 000. The retirement business, RISE, made a R3.4 million contribution to after-tax profit, a six-fold increase on the previous comparable period.

Read:
R200m Purple Group deal sees introduction of new strategic shareholder
How much could EasyEquities be worth?
Michael Jordaan’s crypto venture ties the knot with EasyEquities

“The fundamentals driving the business are really very good, we’re experiencing strong growth in customers and platform assets whilst the cost of servicing and acquiring these clients continues to decrease,” says Savage.

“We have accelerated investment into new products, partnerships and services that will further differentiate the business and provide an extended runway for future growth in customer numbers and revenue per customer,” he adds.

The outlook for the second half of the year is promising, now that things appear to be returning to normal and Purple is scaling up for the next leg of its growth, both at home and abroad.

Listen: Simon Brown discusses EasyEquities’ funded retail investment accounts hitting 966 299 and its aspirations, with CEO Charles Savage (read transcript)

Listen to Ryk van Niekerk’s Be a Better Investor podcast interview with Charles Savage (or read the transcript): 

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