Shares in Purple fall after it flags annuals to drop amid a moribund economy and high rates

Charles Savage is the CEO of Purple Group. Picture: Supplied

Charles Savage is the CEO of Purple Group. Picture: Supplied

Published Nov 30, 2023


Shares in Purple Group, the owner of the EasyEquities trading platform, slid after it said yesterday that it expected its earnings to fall to a loss amid a significant downturn in the economy and escalating interest rates.

It said it was taking longer than expected to take its products live in new markets.

Purple’s share price slid 4.76%to R0.60 in afternoon trade and the share is down 41.12% in the past three years.

In a trading statement for the year ended August 31, 2023, it said it expected a headline loss per share of between 1.94 cents and 2.15c, compared to headline earnings per share of 1.12 c reported in the previous period.

It also forecast a basic loss per share of between 1.80c and 1.99c, compared to basic earnings per share of 3.64c reported in the previous period.

“In accordance with IFRS reporting standards, the prior period earnings and headline earnings per share have been restated to reflect the impact of the rights offer concluded by the Company during the period. The reported weighted average number of ordinary shares has been restated from 1 181 004 638 shares to 1 209 937 728 shares,” it said.

The basic earnings for the previous period had been restated from 3.71c to 3.64c and the headline earnings per share from 1.14c to 1.12c.

Purple said the past year had been marked by economic fluctuations, including a significant downturn in the economy and escalating interest rates.

“It’s in these times that true innovation emerges. We faced unavoidable declines in activity based revenue, primarily driven by muted market volatility and the impact of inflation and higher interest rates. These challenges have emphasised the importance of retaining strategic agility and building an increasingly diversified business, which we continue to do,” it said.

Purple said it was focusing on strategic investments and expansion.

“New markets, particularly in Southeast Asia with EasyEquities Philippines Inc. and our partnership with GCash, is more than just growth – it’s about creating new worlds of possibilities. Our investments are deliberate and lay the groundwork for the future.

“While taking our products live is proving to be much more difficult and taking longer than planned, our time in the market has been well spent. We are building strong regulatory relationships, strengthening our ties and opportunities with GCash and building a community through educational engagement with hundreds of thousands of Filipinos every single day,” it said.

Looking at product diversification and innovation, the group said its product portfolio was expanding and was often driven by customer demand.

“With new introductions like EasyCredit, EasyProtect, and EasyBonds, we're defining what’s possible in our industry and our Clients’ lives,” it said.

A cornerstone of its strategy was its investment in technology.

“The technological infrastructure we have built enhances our operational efficiency, security and customer experience and positions us well for rapid scaling as market conditions improve. Significant investment has gone into scaling and securing our platform while making it ever easier to partner and integrate into. We continue to retain significant advantage not just in South Africa, but globally too. ”