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[ICYMI] Purple Group CEO Charles Savage on FY results, EasyEquities client success, 2023 ambitions and more... investing equities ETFs Download the podcast
SIMON BROWN: I’m chatting now with Charles Savage, CEO of Purple Group. Disclaimer up front – I hold shares in Purple. Results for the year-end August saw revenue up 33.8%; profit before fair-value adjustments and tax up 52.2%. Headline earnings, however, [were] down 74.3% and active clients up just over 50%, at just over 763 000.
They pitched up and they kept adding money to their investments, and we onboarded as many customers in the last 12 months as we did in the previous 12 months. So we’re very proud of their resilience and persistence towards investing goals. CHARLES SAVAGE: Yes. It was a busy year. We’re a small group, which I don’t think people give us credit for. There were there less than 150 of us and we did four acquisitions. So we consolidated, as you say, all of the subsidiaries, plus we bought Cloud Atlas [Investing], so that we’ve got ambitions to enter the active-managed ETFs space. We still onboarded 250 000 customers and that creates quite a lot of work for the team.
The real magic is we’ve got 500 000 customers that onboarded in the last two years that are not yet profitable. If you look at the customer cohorts, the minimum level of profit that we’ve achieved per customer cohort is R200 per customer per year. So we’ve got an opportunity to convert these 500 000 customers into profitable customers over the next few years, and we are doing it in two ways.
CHARLES SAVAGE: That’s a really conservative estimate because, as I said, that’s our least profitable customer cohort. So over the next two years I’m pretty confident we’ll get to those kind of levels of profitability from those customers. But [I’m] really excited about two new products that we are launching in the next six months being EasyCredits, which is securitised credit against your portfolio. And then EasyProtect Life, which is life insurance built for investors.
The runway for products and services is enormous. We’ve only delved [into] investment services. There’s just so much more for us to do in the years ahead. The third one is we anticipate onboarding a significant amount of customers very quickly in the Philippines. Because of that we’ve had to create excess capacity in our systems, sort of waiting for customers to arrive, which is outside of the ordinary capacity, because our partner in the Philippines is very significant and we’re pretty confident that we’ll onboard at least 150 000 customers close to launch date when we launch that partnership.
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