Our opinion on the current state of PPE

Purple Group (PPE) is a trading platform and asset management company that is aimed mainly at the private investor and offers the cheapest costs of dealing in shares on the JSE. The company has three divisions: (1) Easy Equities which enables investors to buy very small quantities of shares with very low dealing costs. For example, buying R100 worth of a share costs the investors just 64c. 95% of accounts opened are first-time investors and the company has 150 000 active investors. (2) Emperor Asset Management which manages funds on behalf of clients and (3) GT247, a derivatives trading platform. On 18th May 2023 the company announced the finalisation of its rights issue to raise R105m and already had the support of more than 27% of its shareholders. Shareholders will be offered 10,20567 new shares for every 100 shares that they already hold at a price of 81c per share. The offer is at a 31,87% discount to the volume-weighted average price (VWAP) of the 7 days ending 16th May 2023. In its results for the year to 31st August 2023 the company reported revenue up by 0,8% and a headline loss of 2,05c per share compared with a profit of 1,12c in the previous period. The company's net asset value (NAV) increased by 6,3% to 40,8c per share. The company's client base grew by 17,5%. The company said, "Institutional client inflows delivered a standout performance, improving by 169.9% over the period and driving assets across our platform up to R14.5 billion". The share is reasonably well traded with an average of around R261 000 worth of shares changing hands daily on average. The share has made a "double top" formation at around 340c in the first half of 2022 and has been falling ever since. Technically, it remains firmly in a downward trend. We advise applying a 65-day exponentially smoothed moving average and waiting for an upward break - which does not look imminent.