Trans­ac­tion Cap­i­tal bucks trend with strong growth


TRANS­AC­TION Cap­i­tal yes­ter­day bucked the trend to re­port dou­ble-digit growth for the six months to end March. The group said its di­vi­sions shone de­spite the Covid-19 pan­demic to in­crease its core head­line earn­ings 19 per­cent to R402 mil­lion, while core head­line earn­ings per share rose 18 per­cent to 65.4 cents.

Trans­ac­tion Cap­i­tal op­er­ates SA Taxi and Trans­ac­tion Cap­i­tal Risk Ser­vices (TCRS). SA Taxi in­creased its core head­line earn­ings 20 per­cent to R230m, and TCRS inched up 23 per­cent to R158m.

Chief ex­ec­u­tive David Hur­witz said SA Taxi and TCRS had demon­strated re­silience in vari­able con­di­tions in many years and had man­aged to grow its core head­line earn­ing by 20 per­cent for the past five years.

Hur­witz said the re­sults were in line with past per­for­mance and expectatio­ns. “Our strongly po­si­tioned di­vi­sions within re­silient mar­ket sec­tors, the mea­sures taken to strengthen our cap­i­tal struc­ture and en­sure ad­e­quate liq­uid­ity, and the de­fen­sive char­ac­ter of our di­vi­sions, will sup­port the group’s re­turn to earn­ings and div­i­dend growth.”

The group ad­justed the re­sults to in­clude the Covid-19 im­pact on its busi­ness, slash­ing core head­line earn­ings from con­tin­u­ing op­er­a­tions 17 per­cent to R281m.

Hur­witz stressed that the per­for­mance un­der re­view did not ne­ces­si­tate Covid-19 ad­just­ments on as­sets.

“How­ever, in adopt­ing a con­ser­va­tive ap­proach, some ad­just­ments have been made. In SA Taxi, an in­crease in im­pair­ment pro­vi­sions of R126m was recog­nised and in TCRS, the car­ry­ing value of its pur­chased non-per­form­ing loan port­fo­lio was re­duced by R65m; both ad­just­ments be­fore tax.

“Im­por­tantly, the ad­just­ments are non-cash and re­late to as­sets held on March 31, and not the orig­i­na­tion of fu­ture as­sets,” Hur­witz said.

The group did not de­clare any div­i­dend to re­tain cap­i­tal for Covid-19.

Last year Trans­ac­tion Cap­i­tal declared a 27c div­i­dend.

Hur­wits said the group was well cap­i­talised with un­de­ployed cap­i­tal of R800m and an un­drawn R400m liq­uid­ity fa­cil­ity avail­able to al­le­vi­ate any short-term cash-flow pres­sures.

The board will con­sider a div­i­dend at year-end should it have cer­tainty on the im­pact of Covid-19, he said.

Trans­ac­tion Cap­i­tal shares closed 3.30 per­cent higher at R15.65 on the JSE yes­ter­day.

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