Transaction Capital increases interim dividend by 40%
Transaction Capital on Wednesday upped its first-half dividend by a hefty 40% to 21c, as it benefited from growing demand for credit to finance minibus taxis.
Core headline earnings rose 22% to R310m in the six months to end-March, with the SA Taxi and Transaction Capital Risk Services divisions accounting for the bulk of the earnings.
SA Taxi grew headline earnings 20% to R173m and net interest income by 19% to R491m.
SA Taxi’s loans and advances portfolio, which consists of 29,921 vehicles, grew 15% to R8.9bn while the number of loans originated grew 4% as a result of what it said was a slight increase in minibus taxi prices.
Transaction Capital Risk Services (TCRS), its debt collection business, grew core headline earnings by 28% to R119m.
The performance was supported by "TCRS’s continued acquisition of nonperforming loan portfolios from SA’s risk-averse consumer lenders, who prefer an immediate recovery against their nonperforming loans".
The nonperforming loan ratio held stable at 17.2% in the period under review.
"Our ability to continue to deliver high-quality earnings growth under challenging economic conditions demonstrates Transaction Capital’s defensive characteristics" CEO David Hurwitz said in the company’s results statement.
"Over recent years, SA Taxi and TCRS have adjusted to SA’s challenging macro- and socioeconomic conditions, by refining and diversifying their scalable fintech platforms and achieving high operational efficiency."
At least two-thirds of South African households use minibus taxis, the company says, outstripping buses and trains as the main mode of public transport.
The share price was relatively flat in early trade to R17.20 on the JSE.