TRANSACTION CAPITAL

Share price: R16.79 JSE code: TCP

BUY THIS INNOVATIVE FINANCIAL services counter has been a resounding success since listing on the JSE in 2012.

IM believes the group’s long-term growth prospects mean the stock represents good value on a trailing earnings multiple of 15 times and a yield of nearly 3%. Its major growth engine is SA Taxi — which incorporates vehicle buying and servicing (repairs, parts and salvaging) as well as financial services and insurance for minibus taxi owners.

The minibus taxi sector is one of the few economic hubs still showing steady growth. TCP, harnessing smart telematics and credit application processes, has built a compelling product offering that should continue to generate racy returns.

SA Taxi’s gross loan and advances topped R9.4bn in financial 2018 with a credit loss ratio of 3.3%, with a net interest of 11% compensating for a 17.7% nonperforming loan ratio. Noninterest revenue was R540m and the return on equity for 2018 an impressive 25.9%.

Transaction Capital Risk Services, a technology-led and data-driven business based in SA and Australia, managed R273m in headline earnings in 2018.

While TCP has the balance sheet to chase new opportunities, it’s difficult not to mull a possible takeover.