Johannesburg - JSE-listed financial services company Ecsponent’s Botswana subsidiary, Ecsponent Asset Management, has been awarded a licence to operate as an asset manager in Botswana.
Ecsponent has a 70 percent stake in the Botswana unit.
Chief executive Euné Engelbrecht said the licence would provide the group with a larger and more diversified investor base in both the retail and institutional sectors.
“This licence opens avenues for Ecsponent to serve a larger section of these markets and it positions us well to expand our institutional and retail investment offerings,” he said.
The announcement came on the back of Ecsponent’s recent annual results for 2015, where the group reported an increment of after-tax profit by 282 percent from R5.2 million to R19.9m.
Besides Botswana, Ecsponent has operations in South Africa, Swaziland and Zambia.
Ecsponent is an African financial services group of companies that specialises in capital raising, credit and capital growth in specific niche-market sectors.
Chief operating officer Terrence Gregory said Ecsponent was ready for an uptake this year and to distance itself from the slump in commodity prices that had affected the company’s year-end results.
He said: “The commodity fall has reduced demand for tenders in one of the sectors we operate in, especially in Witbank. Thirty-four percent of the businesses in the mining sector in this area closed and this impacts our business because a reduction in the number of tenders, means a reduction in the amount of funding we can provide to SMMEs.”
Credit act
The copper sector in Zambia declined, with the same effect on Ecsponent ‘s SMME funding as in Witbank.
The National Credit Act did not have a negative effect. Ecsponent exited the personal lending business in South Africa and successfully avoided the potential negative impact the NCA would have on the business.
Despite the setbacks, the company managed to raise a total of R269.4m from its premium preference share products, which has been deployed to grow the group’s asset base.
The share price gained 5.26 percent yesterday to close at 20c on the JSE.
Gregory said the share price of 20c per share was not a true reflection of Ecsponent’s performance.
“We have been producing good results for the past five years now. We have a P/E (price-to-earnings ratio) of 8, which is among the best in the market. The results prove that we have been working hard as a company and we managed to deliver some excellent growth,” Gregory said.
“So we expect in the long run to see our share price confirming the company’s good performance,” he added.
Engelbrecht said during the period under review, the group’s strategic focus remained on investment in companies, specifically in the financial services sector, which had clear African and global market applications.
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