Araxi Limited · JSE:AXX
Araxi — Capital Appreciation — FY2025 Earnings Presentation
57 slides from Araxi's earnings presentation, June 2025
Slide 1: Annual Results Presentation 2025
2025 Annual Results Presentation FOR THE YEAR ENDED 31 MARCH
Slide 2: Outline
Outline 1 Introduction & Highlights 2 Payments 3 Software 4 Financial Performance 5 Prospects 6 Q&A 2
Slide 3: Halo now forms part of Payments
Halo now forms part of Payments Revenue R 689 m Revenue R 549 m Revenue R 12.5 m International Payments Software Note: LayUp, AssetPool and Regal Digital are companies in which CTA holds a minority interest 3
Slide 4: Investment Case
Capital Appreciation’s ✓ Strong secular growth trends Investment ✓ Large market opportunity – domestic and international Case ✓ Trusted partner to blue-chip clients ✓ Highly talented, skilled and dedicated team An extremely strong ✓ Demonstrated leadership and track record foundation on which to gro
Slide 5: Events & Highlights
✓ Execution of Payments strategy progressing well Recent ✓ New MATERIAL terminal and estate management Events & contracts ✓ Continued excellence in delivery Highlights ✓ Synthesis achieved AWS Premier Tier status – one of few globally ✓ Synthesis again voted One of the Best Software Houses A busy ye
Slide 6: Strong Performance in Sluggish Economy
Strong Performance in Sluggish Economy HEPS up 25.6%, DPS up 20.0% ✓ Group revenue – R1.3 billion, up 7.6% ✓ Demand for Payments products accelerating, 17.57 and Software demand strong (although sales cycle remains protracted) 13.99 ✓ New and diversified revenue streams Cents per share 12.00 ✓ Termi
Slide 7: Changes to Accounting Policies
Changes to Accounting Policies Auditors rotated after serving 10 years prompting policy reviews, adjustments and restatements . . . Accounting for Appraisal Right litigation liability Recognition of CGT Dariel Earn-out – – contingent to on use of Treasury Contingent actual liability Shares Considera
Slide 8: Earn-Out
Dariel Related Earn-Out CONTEXT ✓ Dariel’s earn-out was variable – actual EBITDA delivered was to be measured against EBITDA warranted Variable element of contingent consideration ✓ The contingent acquisition consideration was reflected as equity and should have been fair valued through SOCI measure
Slide 9: Appraisal Remedy
Liability re CONTEXT Appraisal ✓ In 2019 one shareholder exercised appraisal rights related to specific repurchase transaction @ 80 cents per Remedy share ✓ CTA contested appraisal remedy but Court concluded CTA is required to purchase shares at then Fair Market Value, to be determined by court-appo
Slide 10: Capital Gains Tax
Recognition of Capital CONTEXT Gains Tax ✓ CTA used Treasury Shares to satisfy certain obligations ✓ Under its Share Option Plan and the Conditional Share Plan Tax charge recognised ✓ Relating to the share obligations in connection in 2024 and 2025 with acquisitions (eg Dariel and Responsive) ✓ The
Slide 11: Agent vs Principal
Revenue Agent vs CONTEXT Principal ✓ All third-party contracts represented by Synthesis were reviewed ✓ The conclusion was that three contractual relationships constitute an Agent and not Positive impact on Principal Software margin with no impact on earnings ✓ No other contracts were recharacterise
Slide 12: Associate Companies
Investment in Associate CONTEXT Companies ✓ CTA funded LayUp and AssetPool with Convertible Debt ✓ Previously accounted for at amortised cost, Uplift in value of LayUp and with no recognition of the conversion option value AssetPool recognised through SOCI over 2024 ✓ Loan revalued to market and 202
Slide 13: CAET
Consolidation of CONTEXT CAET ✓ CAET holds 75 million CTA shares acquired at initial listing ✓ CAET funded the purchase with bank loan (preference shares) guaranteed by CTA Founders in personal capacity ✓ CTA has NO financial exposure to CAET (position Interpretation and unchanged) application of IF
Slide 14: Strong Profitability and Cash Generation
Strong Profitability and Cash Generation Revenue up 7.6% EBITDA up 23.3% 1 250.7 Revenue benefitted from 1 162.0 333.9 995.1 a large terminal estate, 270.7 R million R million higher terminal sales, 164.9 and a larger rental fleet Software revenue contracted due to lower 2023 2024* 2025 2023** 2024*
Slide 15: GovChat Intervenes in Meta Prosecution
GovChat ✓ Meta/Facebook/WhatsApp Litigation Intervenes ✓ Competition Commission prosecuting Meta at the Competition Tribunal in Meta ✓ GovChat granted leave to Intervene by Competition Tribunal Prosecution ✓ Trial delayed from August 2025, now scheduled for early 2026 ✓ Post Business Rescue CTA part
Slide 16: Payments
Payments
Slide 17: Digital Payments Growth Continues
Digital Payments Growth Continues South Africa: Card Payments Value (ZAR trillion), 2020-29f Average frequency of payments per card 4 40% 118.1 Card payments value (ZAR trillion) 3 30% 51.0 Growth rate (%) 24.2 5.3 10.9 2 20% Kenya Morocco Egypt Nigeria South Africa 1 10% This figure highlights Sout
Slide 18: Payments Growth Strategy
Payments ✓ Continue to take market share in established Growth segments ✓ Grow market for devices Strategy ✓ Grow SA client base ✓ Refresh industry’s legacy terminal estates – 2G and 3G devices Organic growth opportunities ✓ Follow clients across Africa (hardware & software) are plentiful for a busi
Slide 19: Global Expectations for Halo Dot
Global Expectations for Halo Dot Juniper Research, 27 May 2025 “This swift progression will be driven by SoftPOS’s ability to democratise access to digital 5-year SoftPOS Market payments for micro and small Growth – 2025 to 2030 2 150% businesses as they transition away from using cash payments” Tot
Slide 20: Halo Dot
Halo Dot Contactless Payment Acceptance “ The global SoftPOS market is expected to Transforming any NFC-enabled mobile device into a secure point of sale see substantial growth, terminal, empowering merchants of all sizes to accept EMV compliant payments with some projections indicating a 1 050% Inc
Slide 21: Tap on Own Device
Tap on Pilot in the gaming industry to be announced in Q3 2025, in partnership with card schemes and a local acquiring bank Own Device Completing a transaction on your personal mobile device Reimagining the checkout experience – Converting high-risk Card-Not-Present Enabling fraud liability shift se
Slide 22: Halo Dot Platform Agnostic
Halo Dot Platform Agnostic Accessible on all platforms You can now enjoy the same certified, secure and modular software across even more devices. This means a smoother experience for all users, no matter the platform. 22
Slide 23: Halo Dot in Action: Pick n Pay
Halo Dot in Action Challenge Pick n Pay, one of South Africa’s largest retailers, approached Halo Dot in Pick n Pay search of a queue-busting solution for their Clothing stores – one that could speed up checkout, reduce in-store congestion during peak periods, and enhance customer satisfaction, all
Slide 24: Driving Real Results
24 Driving Real Results LayUp is growing well, with tangible traction 2 500+ Active Merchants Serving diverse sectors: retail, travel, furniture, construction, and tech v 89%+ Completion Rate Majority of customers complete their plans successfully 208 a) (am a) 1in3 R576k Customers Biggest Return Or
Slide 25: Software
Software
Slide 26: Software Reimagined
Reimagined Software Transforming businesses through innovative technologies, enabling clients to thrive in the global marketplace. 26
Slide 27: Software Action Plan for Improved Performance
Software What we have done and are doing Action Plan External efforts to drive revenue for Improved ✓ Refocused sales effort to improve Pipeline Quality, Depth and Conversion Ratios Performance Internal efforts to manage cost and resources ✓ Judicious hiring – against committed demand ✓ Refined role
Slide 28: Software Growth Strategy
Software ✓ Leverage Partnerships and Relationships – Assist new and Growth existing customers to grow their businesses and set them up for success Strategy ✓ Grow license and annuity revenue – Increase recurring revenue from proprietary software solutions and managed services Substantial Opportunity
Slide 29: Unlocking Value Through AI
Unlocking AI for Enterprises: Driving Operational Excellence AI for Solution Providers: Differentiation & Scale Value Productivity Gains - Automates Enhanced Product Offerings - Through AI repetitive tasks, freeing up human Embeds intelligence into existing capital for strategic work platforms, crea
Slide 30: AI Presents a Compelling Opportunity
AI Presents a Compelling AI has Opportunity moved from For enterprises and for experimentation to service providers a focus on unlocking business value Arvind Krishna, CEO, IBM IBM Think 2025 Keynote — May 7, 2025 30
Slide 31: Recognition
Maintaining a Stellar Reputation Recognition Winner of the Google Cloud: Gen AI Live + Labs Hackathon 2024 Once again, selected as one of the Best Software Houses in South Africa for large business projects in 2025 according to MyBroadband. Achieved AWS Premier Tier Partner Status – one of only two
Slide 32: Banking and Financial Services Conglomerate
Cloud Use Case Banking and The bank partnered with Synthesis and AWS Professional Services (ProServ) to migrate over 45 Financial Services production applications (as part of the 1st phase) from the bank’s data centre to the AWS cloud Conglomerate Synthesis lead the journey from assessment to execut
Slide 33: Leading Bank and Wealth Management Group
Payments Centre of Excellence Background Leading Bank and Customer growth in both the private and corporate sectors prompted a need for the payments ecosystem to support Wealth Management increased customer volumes. Legacy systems hindered efforts to scale Group Solution Synthesis architected and bu
Slide 34: Aquazania
Dariel Platform Development Aquazania Solution Dariel recommended a modern and robust Microsoft technology stack to meet the company's current requirements and accommodate any future expansion and integration of new technologies and business processes Transforming business operations Benefits with M
Slide 35: AssetPool Minority Investment
AssetPool 2024 Inspections 2025 Inspections 349 416 505 043 Minority Investment 600 500 505 A cloud-native B2B SaaS platform focused on smart inspection, asset management, tracking, maintenance, compliance and Inspections (‘000) 400 383 verification 349 300 276 2025 Progress: 264 200 187 ✓ New featu
Slide 36: Financial Performance
Financial Performance
Slide 37: Continued Strong Growth from Payments
Continued Strong Growth from Payments Total terminal estate up 18.8% Payments EBITDA margin improved 424 Terminal sales up 41.1% 41.9 43.2 357 y-o-y, combination of 328 39.4 277 outright sales and a Percent finance lease ‘000s 217 185 140 commencing in FY25 92 49 Terminal rental income up 15.3% cont
Slide 38: Payments Performance
Payments R million Performance 800 689.2 700 567.2 • Terminal sales escalate as multi-year bank and fuel 524.8 600 contracts gain traction 500 • Clients’ shift to long term rental/lease agreements strengthens annuity and additional supplementary 400 297.8 income 237.5 300 206.3 • Although not the no
Slide 39: Software Delivered Improved H2'25
Software Delivered Improved H2’25 Software revenue down 7.6% License and subscription fees up 58.6% 594.1 118.5 549.0 Rise in licence and 469.9 subscription fees from R million R million 74.7 organic growth and 62.5 once-off product licence fee 2023 2024* 2025 Security hardware fees 2023 2024 2025 d
Slide 40: Software Performance
Software R million Performance 594.1 650 549.0 600 469.9 550 500 450 • Overcapacity of bench resources continued to put 400 pressure on profitability 350 • Remedial plans implemented with tangible signs of 300 recovery in H2 250 200 • The improved pipeline and long-term contracts should 89.9 150 89.
Slide 41: International Performance
International Performance R million 160 150.9 137.2 140 • Division is in its infancy – mostly still transacted from South Africa 120 100 • Revenue decline due to expiration of a 84.6 significant multi-year contract 80 • Promising international pipeline and 60 opportunities 40 • Extensive sales and m
Slide 42: Group Condensed Statement of Comprehensive Income
Group Condensed Statement of Comprehensive Income 31 March 31 March % increase / (1) Revenue increase (R million) 2025 2024* (decrease) • Higher terminal sales, larger rental and finance lease fleet offsetting lower (1) Revenue 1 250.7 1 162.0 7.6% software revenue Gross Profit 614.7 560.8 9.6% (2)
Slide 43: Group Condensed Statement of Comprehensive Income (continued)
Group Condensed Statement of Comprehensive Income (continued) The 31 March 2024 results were restated as presented previously. The impact of the restatements were as follows: 31 March 31 March % increase / (R million) 2025 2024* (decrease) EPS impact Profit after tax 206.9 165.2 25.2% Accounting for
Slide 44: Condensed Group Statement Of Financial Position
Condensed Group Statement Of Financial Position (R million) 31 March 31 March 2025 2024* ASSETS (1) Increase in other non-current Property, plant and equipment 67.5 71.7 assets • Major increase due to c. R44m net Goodwill 840.3 840.3 investment in finance leases; and Right-of-use assets 20.4 27.7 •
Slide 45: Cash Flow (Key Features)
Cash Flow (Key Features) 31 March 31 March (R million) 2025 2024* Profit before tax 297.8 250.3 (1) Other fair value gains: Net finance income received (13.4) (32.9) • Contingent consideration liability operations movement Cash generated from reversal of c. R19.1m (1) Other fair value gains (36.7) (
Slide 46: Cash Flow (Key Features) continued
Cash Flow (Key Features) continued) ( 31 March 31 March (R million) 2025 2024* Profit before tax 297.8 250.3 (5) & (6) Continue to invest in PPE: • Supports operating lease model as Net finance income received (13.4) (32.9) well as internal product software operations movement Cash generated from de
Slide 47: Sustainable Cash Flow From Operations Supports Dividends
Sustainable Cash Flow From Operations Supports Dividends Cash Cover Dividends R million Times (cents per share) 360 3.5 318.8 3.1 12.00 320 2.9 2.8 3 2.7 280 10.00 2.5 212.7 2.4 206.1 207.9 204.3 240 200.9 2.1 8.25 183.1 2 7.50 166.3 200 157.2 1.7 131.0 160 1.5 5.50 5.00 108.1 1.3 4.25 98.3 120 4.00
Slide 48: Treasury Shares Outlook
Treasury Cumulative held shares, purchased in Open Market ( as of 31 Mar ’25) 63.8 m Shares Outlook CAET Shares – IFRS 10 consolidation (deemed treasury) 75.0 m Likely some will be cancelled Dissenting Shareholder Shares – issued shares to be cancelled 18.1 m Additional shares acquired after 31 Marc
Slide 49: Prospects
Prospects
Slide 50: General Prospects
General Prospects Strong pipelines across divisions and significant Group is well capitalised, with the orders already placed management skills, experience, for fiscal 2026 motivation and technology (products and solutions) to Economic climate is deliver on our impacting our clients and remains pres
Slide 51: Name Change
Capital Appreciation Name Change To be proposed as part of AGM From this To this 51
Slide 52: A Closing Thought
The Path Ahead A Closing Thought “ Before we work on Steve Polyak, PhD in Artificial artificial intelligence Intelligence at The University of Edinburgh, Scotland, a MS in Computer why don’t we do Science from DePaul University in something about natural stupidity? ” Chicago, and a BS in Psychology
Slide 53: Q&A Thank you
Q&A Thank you
Slide 54: Disclaimer
Disclaimer This presentation contains forward-looking statements that relate to Capital Appreciation’s future operations and performance. Such statements are not intended to be interpreted as guarantees of future performance, achievements, financial or other results. The statements rely on assumptio
Slide 55: Annexure
Annexure
Slide 56: B-BBEE
B-BBEE Group BEE Ratings Continued commitment 2017 2018 2019 2020 2021 2022 2023 2024 2025 to BEE 1 1 1 2 2 2 2 2 3 3 3 3 4 4 4 4 6 7 7 African Resonance Dashpay Synthesis Capital Appreciation Dariel 56
Slide 57: Consistent Approach To ESG
Consistent Sound governance, aligned with King IV A proud transformation heritage Approach Diverse, representative Board of B-BBEE shareholding structure in directors place since inception To ESG A solid foundation of transparency, Services seek to drive Financial effective control, accountability a