Why this JSE small-cap is one to watch

South African FinTech company, Capital Appreciation, has recently announced a significant increase in Profit after Tax in its interim results, showcasing a remarkable growth trajectory in a challenging economic landscape. The company's joint CEO, Brad Sacks, highlighted the impressive performance metrics, with earnings per share and headline earnings per share soaring by 87 per cent. The firm reported 86 million rand over EBITDA, 60 million rand of profit, and 4.02 cents per share in EPS for the six-month period ending in September. This robust financial performance is underpinned by a strategic focus on leveraging technology to empower financial institutions in an increasingly competitive environment. Sacks emphasized the critical role of innovative technology solutions in bolstering banks' profitability and competitiveness against emerging fintech disruptors. While facing competition from a growing number of startups, Capital Appreciation has adopted a unique approach centered on enhancing financial infrastructure and capabilities for established financial institutions, rather than creating standalone consumer brands. By enabling traditional banks to harness cutting-edge technology, the company aims to support them in defending market share against agile newcomers and driving operational efficiency amid economic challenges. The firm's commitment to providing tailored fintech solutions positions it as a key player in South Africa's evolving financial services landscape, poised for sustainable growth and value creation. In addition to servicing established banks, Capital Appreciation continues to explore opportunities to collaborate with industry stakeholders, such as the South African Post Office, in enhancing financial infrastructure. The company has submitted a proposal to support the Post Office's banking initiative, underscoring its proactive approach to expanding its market reach and fostering strategic partnerships in the sector. By aligning its technological expertise with the evolving needs of the financial industry, Capital Appreciation is well-positioned to drive innovation, resilience, and growth in the dynamic South African fintech ecosystem.