Araxi CEO Bradley Sacks said In May 2026, Araxi acquired an 80% stake in the Pay@ Group. The transaction marked a significant milestone in the group's evolution and provided further momentum for growth.
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Araxi, known formerly as Capital Appreciation, ended the year to March 31 operationally and financially in a much better position than the previous year, contrary to what its financial results may suggest, CEO Brad Sacks said Tuesday.
Strong cash generation across the underlying businesses fueled a 25% increase in cash from operations to R259 million for the year. A robust performance enabled Araxi to declare stable dividends of R155m (12 cents per share) for the year. This was despite completing the R1 billion Pay@ transaction in May and maintaining adequate resources to fund growth opportunities.
Sacks said revenue and profitability in the year were negatively impacted by both national and global economic headwinds, including a worldwide shortage of microchips.
The microchip shortage had delayed the delivery of terminals and had also resulted in increased costs. More positively however, recurring revenue in the Payments operations increased significantly, with terminal license fees up 31%.
The Software division’s underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 77%, pointing to a meaningfully more positive trajectory.
Costs were well managed. Group operating expenses ended 7.1% lower than the prior year at R341.1m. Several one-time items also had an impact on the results. Headline earnings per share declined 18.2% to 14,38 cents a share.
Both the Payments and Software divisions exited the 2026 financial year and entered the 2027 financial year on a sound footing, said Sacks.
Strategic initiatives included restructuring the Software Division, and the acquisition of the leading provider of B2B integrated payments solutions, Pay@ Group.
Sacks said the Software division restructure resulted in a R10m one-off cost and would result in an estimated R40m in annualised savings.
Meanwhile, the Pay@ Group acquisition in May this year was trading well, and at current levels, would have increased group headline earnings by about 20% on a pro forma basis.
The number of point-of-sale (POS) terminals in customers' hands increased by 5.4% to 447,000 at year-end, generating attractive annuity income and scale efficiencies.
Payments’ PSaaS (Payments Software-as-a-Service) strategy of developing hardware-agnostic software solutions significantly increased the total addressable market for its services and improved the visibility of its future earnings.
Halo Dot has been a critical enabler, as an Apple Gateway Service Provider (GSP), for the launch of Apple’s Tap to Pay on iPhone in South Africa, in partnership with a major retailer and Paycorp in May 2026.
In addition, Halo Dot had been approved as an Apple GSP to enable the launch of Tap to Pay on iPhone solutions in other markets.
The team has progressed acquirer and processor integrations in South Africa, elsewhere in Africa, the UK, across Europe, US, Latin America, Mexico, and most recently the Caribbean, with a number of customers across regions nearing go-live in the 2027 financial year. This generates recurring monthly licensing and support revenue.
The Software Division generated over R384m in contracted sales with major clients, including several large banks and an insurance company. This figure included multiple multi-year agreements to support future annuity revenue.
“Clients are increasingly open to engaging in specialised projects, with particularly strong demand for cloud migration, intelligent data solutions, Agentic AI, fraud detection, and payment modernisation initiatives. By the end of the year, the division saw a significant increase in demand and project closures for 2027,” said Sacks.
“We are pleased with the rebranding to Araxi and how that has been received in the market, as well as galvanised our teams around a single corporate purpose. We are excited about the prospects that arise from the acquisition of Pay@ and remain cautiously optimistic that these trends and opportunities will support the group's growth trajectory in 2027 and beyond.”
BUSINESS REPORT