Purple Group chuffed about good year, loyal customers

Purple Group, the owner of the EasyEquities investment platform, swung into a loss for the year to end-August, but says it has been a good year as it increased its number of retail and institutional investors and rolled out three new products.

Purple made a loss as it received less money from retail investors into EasyEquities than the year before. It makes money from the sale and purchase of shares and when fewer are bought, earnings drop.

On the EasyEquities platform, it had net retail inflows of R1.6bn. Its overall retail inflows were R5.9bn, down from R8.3bn the prior year. As interest rates more than doubled, consumers struggled with less money being invested and more withdrawn.

The figures show cashstrapped customers withdrew just more than R4bn from the platform as they faced a higher cost of living due to higher interest rates.

Its headline loss per share, a main indicator in SA, was 2.05c compared with headline earnings of 1.12c in the prior year.

Despite the losses, CEO Charles Savage said: “I think we’ve had a hell of a good year.

“Registrations are up, customers are up and assets are up. We’ve delivered new products in the period including credit and insurance products.”

In the context of a really tough economic year the key performance indicators for the group all rose, he said. “It really is testament to the loyalty of our customer base and their resilience that in really tough times they continue to invest.”

Registered clients increased 18% to about 2-million but these users are not buying shares or savings products.

Its active clients increased 17.5% to 897,940, while its assets increased 25.3% to R46.6bn.

Institutional inflows to its Rise pension fund business increased to R5.2bn from R1.9bn previously. This is seen as a more resilient business as investing pensions is done before consumers get their salaries and is thus more stable.

Savage said he expects an interest rate decrease in the middle of next year and thinks this will allow retail customers to increase their discretionary investments.

In early November, EasyEquities introduced a R25 monthly fee for most members who do not invest more than they withdraw, which will kick in in 2024.

This led to anger on social media. But Savage said it did not lead to any increase in people leaving the platform.

“We’ve got almost zero client attrition. So people come, stay and never leave. We’ve got extraordinary loyalty on the platform.

“If it was in fact a social media storm, then they weren’t customers of ours anyway.”

He said he did not know when Purple would be able to launch EasyEquities in the Philippines in partnership with a local payments firm GCash, but said they are building good relationships with regulators. However, the launch is taking longer than expected. The Philippines is a much bigger market than SA, Savage said.

The firm has found it easier to hire skilled digital staff in the Philippines than in SA. Because of the six-hour time difference, its employees in the Philippines can work while local SA staff are asleep and help run the 24-hour business.