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Johannesburg - Transactional Capital [JSE:TCP] released its provisional summarised consolidated financial results for the year ended September 30 2013 on Tuesday.
Headline earnings was up 34.6% to R545m, headline earnings per share was up19.8% to 93.4 cents and net asset value per share was up17.5% to 637.7 cents.
Return on assets was up 15.8% to 4.4% and the final dividend increased 33.3% to 12 cents per share. Distribution of 200 cents per share is under consideration.
In its first full year as a public company, Transaction Capital achieved the strategic, operational and financial objectives envisaged on the listing of the group.
In addition, the disposal of Paycorp and Bayport (the latter still subject to approval) has substantially increased tangible net asset value and reduced the range and complexity of risks for stakeholders.
Transaction Capital's 34.6% growth of headline earnings to R545m was achieved through a combination of revenue growth and cost containment in all divisions. Net interest income grew 28.7% to R1 735m, with a net interest margin of 16.0% unchanged.
The reduction in cost of debt due to higher equity levels was neutralised by a lower yield on gross loans and advances, reflective of the stressed South African consumer credit economy.
The group's credit loss ratio increased from 8.8% to 9.6%, due to the increased weighting of unsecured loans and advances within the loan portfolio, which has a higher credit loss ratio associated with these loans.
Encouragingly, the credit loss ratio of asset-backed lending declined from the prior year's levels. Non-interest revenue grew 15.1% to R1.910bn due to the 19.8% growth in gross loans and advances, which drove fee, commission and insurance related income.
The cost-to-income ratio improved from 59.3% to 54.6% as a result of excellent cost control across the group and an increased weighting towards the lower cost-to-income ratio lending operations.
Total expenses grew 11.5% to R1 990 million as both assets in the lending divisions and revenue generating activities in the services divisions expanded, with a concomitant investment in human capital and technology.
With a capital adequacy ratio of 41.6%, Transaction Capital is well positioned to take advantage of, and fund growth opportunities. Since the start of the financial year 21 institutions invested more than R5.6 billion of debt capital.
It is the intention of the board to retain a sufficient portion of the proceeds arising from the disposal of Paycorp and Bayport to optimise the equity and debt structures in the continuing subsidiaries, fund organic growth and facilitate an underpin for significant acquisitive activity in the medium term.
Coincident with, and allied to, the expiry of the chief executive's service contract, the board and group office has been restructured and resized to accommodate the requirements of the smaller Transaction Capital group. Effective November 26 2013 Steven Kark and Cedric Ntumba have tendered their resignations.
With effect from the January 15 2014 Christopher Seabrooke will stand down as independent non-executive chairman to become lead independent non-executive director.
Mark Lamberti will resign as chief executive officer to become non-executive chairman of the board. David Hurwitz will be appointed chief executive officer and Mark Herskovits will be appointed to the board as chief financial officer.
Headline earnings was up 34.6% to R545m, headline earnings per share was up19.8% to 93.4 cents and net asset value per share was up17.5% to 637.7 cents.
Return on assets was up 15.8% to 4.4% and the final dividend increased 33.3% to 12 cents per share. Distribution of 200 cents per share is under consideration.
In its first full year as a public company, Transaction Capital achieved the strategic, operational and financial objectives envisaged on the listing of the group.
In addition, the disposal of Paycorp and Bayport (the latter still subject to approval) has substantially increased tangible net asset value and reduced the range and complexity of risks for stakeholders.
Transaction Capital's 34.6% growth of headline earnings to R545m was achieved through a combination of revenue growth and cost containment in all divisions. Net interest income grew 28.7% to R1 735m, with a net interest margin of 16.0% unchanged.
The reduction in cost of debt due to higher equity levels was neutralised by a lower yield on gross loans and advances, reflective of the stressed South African consumer credit economy.
The group's credit loss ratio increased from 8.8% to 9.6%, due to the increased weighting of unsecured loans and advances within the loan portfolio, which has a higher credit loss ratio associated with these loans.
Encouragingly, the credit loss ratio of asset-backed lending declined from the prior year's levels. Non-interest revenue grew 15.1% to R1.910bn due to the 19.8% growth in gross loans and advances, which drove fee, commission and insurance related income.
The cost-to-income ratio improved from 59.3% to 54.6% as a result of excellent cost control across the group and an increased weighting towards the lower cost-to-income ratio lending operations.
Total expenses grew 11.5% to R1 990 million as both assets in the lending divisions and revenue generating activities in the services divisions expanded, with a concomitant investment in human capital and technology.
With a capital adequacy ratio of 41.6%, Transaction Capital is well positioned to take advantage of, and fund growth opportunities. Since the start of the financial year 21 institutions invested more than R5.6 billion of debt capital.
It is the intention of the board to retain a sufficient portion of the proceeds arising from the disposal of Paycorp and Bayport to optimise the equity and debt structures in the continuing subsidiaries, fund organic growth and facilitate an underpin for significant acquisitive activity in the medium term.
Coincident with, and allied to, the expiry of the chief executive's service contract, the board and group office has been restructured and resized to accommodate the requirements of the smaller Transaction Capital group. Effective November 26 2013 Steven Kark and Cedric Ntumba have tendered their resignations.
With effect from the January 15 2014 Christopher Seabrooke will stand down as independent non-executive chairman to become lead independent non-executive director.
Mark Lamberti will resign as chief executive officer to become non-executive chairman of the board. David Hurwitz will be appointed chief executive officer and Mark Herskovits will be appointed to the board as chief financial officer.
