Our opinion on the current state of CTA

Capprec (CTA) is a fintech company offering payments and payment infrastructure, as well as software and services. It counts Patrice Motsepe's African Rainbow Capital (ARC) among its stakeholders. The company's payment services are facilitated through African Resonance and Dashpay, while its software segment involves systems development and consulting. Additionally, Capprec owns a 17.5% stake in Resonance Australia, a startup business. It boasts major South African banks among its clients.

In its financial results for the six months ending September 30, 2023, Capprec reported a 3% increase in revenue and a substantial 105.6% surge in headline earnings per share (HEPS). The company's net asset value (NAV) also grew by 3.3% to 124.5 cents per share. Capprec attributed the growth in headline earnings to a reduction in the expected credit loss raised for GovChat during the reporting period.

In a business update for the fiscal year ending March 31, 2024, Capprec noted increased business activity in the Payments division, improved expense management, and strong cash flows, resulting in a robust improvement in the group's financial performance in the second half of the financial year. Both the Payments and Software divisions continued to attract new clients, diversify revenue sources, and grow market shares.

The share is currently trading at a price-to-earnings (P/E) ratio of 10.67. With an average daily trading volume of roughly R1.3 million worth of shares, Capprec presents a feasible investment opportunity for private investors. The company appears to be well-managed, profitable, and cash-flush, which may attract institutional interest. However, from a technical perspective, the share has been in a downward trend since January 2022. Investors are advised to wait for a break above its downward trendline before considering further investment.