- The document reports on the interim results for the half year ended 31 March 2016 of Transaction Capital.
- It discusses the company's strategic positioning in asset-backed lending and risk services, highlighting 19% organic growth in headline earnings.
- The environment in South Africa is challenging with macroeconomic and socioeconomic issues, but Transaction Capital's divisions operate in defensive industries like minibus taxi financing and debt collection that continue to see demand.
This slide includes the financial statement analysis of tata communications of the last three year.it contains various analysis methods like common size analysis,comparative analysis, Trend analysis,Ratio analysis etc..
This slide includes the financial statement analysis of tata communications of the last three year.it contains various analysis methods like common size analysis,comparative analysis, Trend analysis,Ratio analysis etc..
Project Consultancy for the Omnichannel Marketing Strategy of a Long Term Renting Car company. Relevant topics proposed were:
- Progressive Web App
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Worked with a team of 4 undergraduate students within a 1-week timeframe to construct and present a solution to NCG judges and industry professionals. (19 teams total)
Public-Private participation to improve supply chainsTristan Wiggill
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A presentation by Mr James Mackay (Private Sector Participation, Transaction Advisory Services: Transnet Group Commercial) at the Transport Forum SIG 2 July 2015 proudly hosted by Resolve in Midrand. The theme for the event was: "Supply Chain and Logistics Collaboration". The topic of the presentation was: "How Transnet intends to leverage Private Sector Participation to develop and improve supply chains."
Pos Malaysia Berhad is a post services company in Malaysia. The organisation was restructured in 1992 from being a governmental owned Malaysian Postal Services Department or Jabatan Perkhidmatan Pos Malaysia into a business corporation.
Pos Malaysia provides postal and related services, transport logistics, printing and insertion, counter collection and payment agency services for a range of financial transactions, such as bill payments, remittance, insurance and unit trusts.
The company holds an exclusive concession to provide mail services through its network of over 850 branches and mini post offices in Malaysia.
Project Consultancy for the Omnichannel Marketing Strategy of a Long Term Renting Car company. Relevant topics proposed were:
- Progressive Web App
- Partnerships
- SEO and SEM strategy
Worked with a team of 4 undergraduate students within a 1-week timeframe to construct and present a solution to NCG judges and industry professionals. (19 teams total)
Public-Private participation to improve supply chainsTristan Wiggill
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A presentation by Mr James Mackay (Private Sector Participation, Transaction Advisory Services: Transnet Group Commercial) at the Transport Forum SIG 2 July 2015 proudly hosted by Resolve in Midrand. The theme for the event was: "Supply Chain and Logistics Collaboration". The topic of the presentation was: "How Transnet intends to leverage Private Sector Participation to develop and improve supply chains."
Pos Malaysia Berhad is a post services company in Malaysia. The organisation was restructured in 1992 from being a governmental owned Malaysian Postal Services Department or Jabatan Perkhidmatan Pos Malaysia into a business corporation.
Pos Malaysia provides postal and related services, transport logistics, printing and insertion, counter collection and payment agency services for a range of financial transactions, such as bill payments, remittance, insurance and unit trusts.
The company holds an exclusive concession to provide mail services through its network of over 850 branches and mini post offices in Malaysia.
Putting the SPARK into Virtual Training.pptxCynthia Clay
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This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujaratâs DholeraAvirahi City Dholera
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The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isnât just any project; itâs a potential game changer for Indiaâs chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
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Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
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A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
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1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
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1. Introduction and Key Concepts of Sustainability
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3. Measures and Reporting in Sustainability
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To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
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Attending a job Interview for B1 and B2 Englsih learnersErika906060
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It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
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Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, youâll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
Improving profitability for small businessBen Wann
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In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
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Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
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Memorandum Of Association Constitution of Company.pptseri bangash
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www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
3. 3INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
STRATEGIC & OPERATIONAL HIGHLIGHTS
⢠Robust financial performance
âş 19% organic growth in headline earnings & headline earnings per share
âş Continued improvement in credit metrics
âş Early adoption of IFRS 9
⢠Strategic positioning of operating divisions
âş Occupy leading market positions
âş Highly defensive businesses
âş Experienced & skilled management teams
âş Platforms to develop new products & expand into new markets
⢠Deployment of capital
âş Conservative & liquid balance sheet in a challenging South African economy
âş Reinvesting into organic capital deployment opportunities within existing divisions
âş Acquisitions search continues, expected within existing divisions & skills set
âş Vertical integration: establishment of autobody repair facility & dealership
âş Expansion into new adjacent markets: launch of Zebra Cabs, a point-to-point
metered taxi business
HIGHLIGHTS
5. 5INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
ENVIRONMENT
MACRO-ECONOMIC ENVIRONMENT
⢠Macro- & socio-economic challenges continue to constrain growth in South Africa
âş Political: political instability & potential sovereign rating downgrade
âş Social: persistent low employment levels with little or no real wage growth; continued protest action
& social unrest
âş Economic: currency related inflation; drought-related food inflation; increased interest rates,
higher electricity & fuel costs
⢠Consumer & SME sector of economy remains vulnerable
âş Household debt-to-disposable income ratio remains at elevated levels with debt-service costs increasing
CAPITAL MARKETS
⢠Local funding market characterised by:
âş Constrained liquidity
âş Issuers paying a premium to access reduced local funding pools
⢠SA Taxi has enjoyed uninterrupted access to debt capital markets
REGULATORY ENVIRONMENT
⢠SARB proposal for authenticated collections to replace existing NAEDO/AEDO
⢠DTI proposals re caps on credit life insurance pricing & NCRâs regulations re affordability
assessments, prescription, caps on interest rates & fees
âş SA Taxi: unaffected by these changes or proposals
âş Risk services: regulations not conducive to credit extension & in medium term may impact volume of
matters handed over. TCRS continues to expand into non-NCA regulated adjacent markets, including
public sector, telecommunications & insurance sectors
ENVIRONMENT
6. 6INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
ENVIRONMENT
Defensive positioning enables Transaction Capital to grow earnings despite
a challenging & low growth South African economic environment
ASSET-BACKED LENDING
⢠Minibus taxi infrastructure remains the dominant form of public transport
⢠Commutersâ use of taxis remains consistently high as spend on transport
is non-discretionary
⢠Taxi operator not over-indebted
⢠Demand for vehicles & finance to replace ageing national minibus taxi
fleet exceeds supply
RISK SERVICES (TCRS)
⢠Adverse environment stimulates demand from new and existing clients
for collection & related credit risk management services
⢠Increased number of non-performing portfolios available to acquire
ENVIRONMENT
8. 8INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
ASSET-BACKED LENDING
CEO: Terry Kier
Group tenure: 9 years
Vertically integrated provider of finance, insurance & other related
products using credit assessment, collections & capital
management competencies. Operational competencies include
vehicle & spare parts procurement (Taximart), direct vehicle sales
(SA Taxi Direct), vehicle refurbishment (Taximart), insurance
(SA Taxi Protect) & telematics. SA Taxi also applies these
competencies to finance bakkies (SA Bakkie) & point-to-point
metered taxis (Zebra Cabs) as income-producing assets for SMEs
TRANSACTION CAPITAL GROUP
FOR THE SIX MONTHS ENDING 31 MARCH 2016
STRATEGY & PROSPECTS
1. Headline earnings attributable to the business, including minority interest
TRANSACTION CAPITAL LIMITED â CEO: David Hurwitz, group tenure: 11 years | employees: 3 822 | headline earnings: R210m
HEADLINE EARNINGS R120m š (â˛21%)
GROSS LOANS & ADVANCES R6 688m (â˛12%)
EMPLOYEES 734
RISK SERVICES
CEO: David McAlpin
Group tenure: 8 years
A technology led, data analytics driven provider of customer
management & capital solutions, enabling our clients to effectively
manage their customers through their lifecycle
HEADLINE EARNINGS R70m (â˛15%)
PRINCIPAL REVENUE â˛9% AGENCY REVENUEâ˛6%
EMPLOYEES 3 066
9. 9INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
TRANSACTION CAPITALâS
ASSET-BACKED LENDING DIVISION
STRATEGY & PROSPECTS
SA Taxi
is an asset-backed lender that
utilises its proprietary data
& vertically integrated specialist
capabilities to extend
developmental credit for
income generating vehicles,
insurance & allied services
to the underserved &
emerging SME market
Generating in-depth client
insight via granular
telematics, credit, vehicle &
other data to enable precise
& informed credit origination
& collection decisioning
A unique blend of vehicle
procurement, sales,
repossession &
refurbishment capabilities,
with comprehensive
insurance competencies &
debt & equity capital
management skill
Business support to SMEs
that may not otherwise
have access to credit from
traditional banks, thereby
facilitating SME growth
Deepening our clientsâ
access to financial services
Predominantly minibus taxis
but also leveraging existing
competencies in adjacent
markets including bakkies
used by SMEs & metered
point-to-point taxis
Assisting our SME clients to
maximise cash flow & protect
their income producing
vehicles thus improving their
ability to succeed
10. 10INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
MINIBUS TAXIS ARE THE DOMINANT MODE
OF PUBLIC TRANSPORT
STRATEGY & PROSPECTS
Source: National Land Transport Strategic Framework 2015 | Passenger statistics from Arrive Alive & StatsSA
noting individuals can take more than one mode of transport | SABOA website
⢠The majority of commuters who utilise public transport are heavily
reliant on minibus taxis
⢠Usage of minibus taxis has been consistently high throughout the
industryâs existence & shows no sign of slowing
⢠Minibus taxi transport is a non-discretionary expense for the majority
of the nationâs commuters
RAIL BUS MINIBUS
commuter trips
daily
2 million
network nationwide
~3 180km
commuter trips
daily
9 million
registered buses
~19 000
commuter trips
daily
>15 million
minibus taxis
~200 000
25% 28%
32%
34%
17%
Up to R500 R501-R1 000 R1 001-R2 000 R2 001-R3 000 >R3 000
Walk Minibus Bus Train Car Other
Modesoftransport
With over 50% of the South African population earning under R3 000
monthly, walking & minibus taxis are their main modes of transport
Monthly income bracket
The public transport system remains the dominant mode of transport in SA
& 66% of those who utilise public transport choose to use minibus taxis
66%
13%21%
Public
transport
choices
Minibus taxi
Train
Bus
40%
38%
21% 1%
Share of
transport
choices
Public
transport
Car
Walk
Other
11. 11INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
DAILY COMMUTERS RELY ON MINIBUS TAXIS
STRATEGY & PROSPECTS
Source: SA Taxi telematics data as at 1 April 2016 | National Land Transport Strategic Framework 2015
Minibus taxis service rail & bus nodes
Major train nodes Major bus nodes SA Taxi network
12. 12INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016STRATEGY & PROSPECTS
âThe minibus taxi industry is today the most critical pillar of our public transport sectorâ
Arrive Alive
13. 13INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
DEMANDS FOR VEHICLES
EXCEEDS THE CURRENT SUPPLY
⢠Estimated fleet of >200 000 minibus taxis in South Africa, with ~70 000 to 80 000 financed
⢠~135 000 (68%) are old & unsafe vehicles that need to be replaced
⢠Ageing fleet & recapitalisation drives higher demand for vehicles & consequently a need for finance
âş Per the National Land Transport Act a minibus taxi must be scrapped after 7 years
âş Natural churn in the market as a result of high usage
STRATEGY & PROSPECTS
Source: Arrive Alive | National Land Transport Strategic Framework 2015 | Department of Transport Minister Dipuo Peters address
at National Council of Provinces | Transport budget vote NCOP 2015/16 | Engineering News
⢠Improved credit performance as SA Taxi
can be selective on credit risk
⢠Improved recoveries as asset retains
value due to demand exceeding supply
⢠Liquid market for high quality &
affordable SA Taxi pre-owned vehicles
Vehicle type
New vehicle sales
per month
SA Taxiâs
market share
Toyota Sesfikile ~720 37%
Nissan NV350 ~200 18%
Chinese manufactured ~100 0%
Mercedes Sprinter ~70 22%
New minibus taxi sales in South Africa
Toyota is the most prevalent vehicle type in the minibus taxi industry,
followed by Nissan
14. 14INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
SA TAXI PROVIDES BUSINESS SUPPORT TO SMES
STRATEGY & PROSPECTS
1. StatsSA National household travel survey 2013
2. SA Taxiâs best estimate through our engagement with the industry & extrapolation of internal data
3. Desktop Research & Taxi Operator Interviews â Step 2015
DEEPENING ACCESS TO DEVELOPMENTAL CREDIT, & FINANCING UNDER-SERVED & EMERGING SMES
WHO WOULD OTHERWISE REMAIN OUTSIDE THE FORMAL ECONOMY
IN SOUTH AFRICA
minibus taxis account for š
~ 200â000
of all household trips š
69%
taxis financed ²
70â000-80â000
taxis insured ²
80â000-90â000
metered taxis Âł
~ 17â000
OUR PORTFOLIO
currently financed
R6.7 billion
unique clients owning 25 591 vehicles
21 479
currently insured
23 800
of financed national taxi fleet
1 in 3
Black owned SMEs
100%
women
20%
RESULTING IN
commuter trips daily š,²
>15 million
new Toyota sales for Toyota Sesfikile
minibus taxi originated by SA Taxi
37%
safer minibus taxis on our roads
in 2015, new & pre-owned
>6 000
SMEs created through
the refurbishment & financing
of pre-owned vehicles in 2015
>1 900
15. 15INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
Proprietary telematics data and analytics
ASSET-BACKED LENDING
DISTINCTIVE COMPETENCIES
STRATEGY & PROSPECTS
Proven & diversified funding structures whereby allocated equity is geared with local and international debt, to achieve risk-adjusted returns
Ability to procure, repossess, refurbish & sell new & pre-owned vehicles including: Toyota minibus, Hilux & Corolla, Nissan minibus & Mercedes Benz long-distance minibus
Proprietary telematics data used throughout the value chain provides critical insights for business decisions
⢠Origination: Data applied into credit vetting process to better understand credit risk & route profitability
⢠Collections: Data informs how collections agents interact with the taxi operator
⢠Insurance: Historical data is used to accurately price the insurance risk & live data is applied to identify no movement which may indicate an insurance claim
⢠Repossessions: Live location data aids the repossession process
ENABLING
SMEs
SERVICING
SMEs
MANAGING THE RETURNS
FROM SMEs
FINANCIAL
SERVICES
VEHICLE
EQUITY
ALLOCATION
& DEBT RAISING
CREDIT
UNDERWRITING
& ORIGINATION
INSURANCE COLLECTIONS REPOSSESSION
VEHICLE SUPPLY
& SALES
REPAIRS
& MAINTENANCE
SERVICE
REFURBISH RESALE
16. 16INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
ASSET-BACKED LENDING
DISTINCTIVE COMPETENCIES
STRATEGY & PROSPECTS
Approved route vs. route actually travelled Distance travelled on an hourly basis
FINANCE SA TAXI PROTECT SA TAXI DIRECT
TAXIMART PROPRIETARY TELEMATICS DATA USED THROUGHOUT THE VALUE CHAIN
17. 17INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
VALUECHAIN
EQUITY ALLOCATION
& DEBT RAISING
VEHICLE SUPPLY
& SALES
CREDIT UNDERWRITING
& ORIGINATION
INSURANCE
COLLECTIONS &
REPOSSESSION
REPAIRS, MAINTENANCE &
REFURBISHMENT
ASSET-BACKED LENDING
LOOKING FORWARD
STRATEGY & PROSPECTS
Leading market position
encompassing the entire value chain
within the minibus taxi industry
FIXED ROUTE
(MINIBUS TAXI)
POINT-TO-POINT
(METERED TAXI)
SME
(BAKKIE)
LEVERAGE EXISTING CAPABILITIES IN ADJACENT UNDER-SERVED MARKET SEGMENTS
Apply existing capabilities
& develop associated
competencies
Further develop
bakkie offering to SMEs,
building on successful pilot
ď
ď
Equity capital allocated
ď
Toyota minibus, Nissan minibus &
Mercedes long-distance minibus
Toyota Corolla
customised metered taxi
Toyota
Hilux bakkie
ď ď ď
Intention to increase & enhance
non-financed insurance portfolio
ď ď
ď ď ď
Established dedicated refurbishment & auto body repair facility
SA Taxiâs dealership established to procure & sell new & pre owned vehicles including:
Intention to increase proportion of vehicles procured & sold, & loans originated directly via SA Taxiâs dealership
Proprietarytelematicsdataandanalytics
18. 18INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
TRANSACTION CAPITALâS
RISK SERVICES DIVISION
STRATEGY & PROSPECTS
⌠is a technology-led,
data analytics driven provider of
customer management &
capital solutions,
enabling our clients
to effectively manage their customers
through their lifecycle
An efficient platform driving superior
performance & facilitating scale via
cutting edge IT systems & processesGenerating in-depth insight to
enable precise & informed
internal & external decisioning
Improving our clientsâ ability
to originate, manage &
collect from their customers
Assisting clients to optimise
their balance sheet by
accelerating cash flow through
structured capital solutions
Working with large consumer credit
providers across multiple industries
as well as SMEs
Assisting our clients to maximise
their customer lifetime value
19. 19INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
A GROWING NON-PERFORMING LOANS MARKET
IN SOUTH AFRICA
STRATEGY & PROSPECTS
1. R81bn comprises credit monitored by the NCR. Transaction Capital Risk Services industry solutions also include
SMEs, education, insurance, Public Sector, telecommunications & SOEs & Utilities
2. Source: NCR
34
33
31
36
43
61
69
81
76
103
105
89
78
67
63
59
2008 2009 2010 2011 2012 2013 2014 2015
MBD target market
Mortgages & vehicle finance
NON-PERFORMING LOAN MARKET
SIZE & GROWTH (Rbn)2
2008 - 2015 CAGR: 13%
2008 - 2015 CAGR: -4%
âş 162 BOOKS PURCHASED since 1999
âş We rank 1st or 2nd
by our clients in 78% of 240 MANDATES (â˛33%)
on panels where we are represented
78%1st or 2nd
FACE VALUE OF
DEBT SERVICED
R81bnš
Customer
Management
Solutions
R15bn
Capital Solutions R16bn
Other
fragmented
participants in
addressable market
Non-performingloanvalue
20. 20INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
IN SOUTH AFRICA
there are 35 million ADULTS [aged 15-65]
TRANSACTION CAPITAL RISK SERVICES
STRATEGY & PROSPECTS
Source: StatsSA, NCR,
Accountancy SA February 2016, Internal data
ENSURES A HEALTHY SOUTH AFRICAN CONSUMER CREDIT ENVIRONMENT
24million
ACTIVE CREDIT CONSUMERS
10million
NON-PERFORMING CREDIT CONSUMERS
86%OF SOUTH AFRICANS
borrowed money between 2013 and 2014
2014South Africans were
the biggest borrowers in the world,
World Bank report
OUR PORTFOLIO
UNIQUE MBD CUSTOMERS
4.4million
1in 8SOUTH AFRICAN ADULTS
1in 5CREDIT-ACTIVE PEOPLE
1in 2NON-PERFORMING CREDIT CONSUMERS
RESULTING IN
COLLECTION AGENTS
2 700
4.2million
VOICE INTERACTIONS
each month
715 000PAYMENTS
received each month
>11million
South Africans described as âOVER-INDEBTEDâ
(it was 5 million in 2013)
21. 21INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
ORIGINATE
Identifying & winning new customers
using data analytics
MANAGE
Enabling payment processes
& customer management
COLLECT
Solving our clientsâ impaired debt problem
through collections & capital solutions
RISK SERVICES
PRODUCT SOLUTIONS
STRATEGY & PROSPECTS
CUSTOMER ENGAGEMENT LIFECYCLE
CLIENTENGAGEMENTMODEL
CUSTOMERMANAGEMENT
SOLUTIONS
CAPITAL
SOLUTIONS
Lead generation & customer acquisition
⢠Lead generation
⢠Predictive & prescriptive modelling
⢠Segmentation modelling
⢠Systems (Smart & FICO)
⢠Analytics
Payment & account management
⢠Customer retention, profitability,
predictive & prescriptive modelling
⢠Systems (Smart & FICO)
⢠Analytics
⢠Payment processing
⢠Receivables management
Collection services
⢠Systems (Smart & FICO)
⢠Analytics
⢠Early stage rehabilitation
⢠Late stage collections
⢠Legal recoveries
⢠B2B collections
Working capital financing
⢠Invoice discounting
⢠Trade financing
⢠Property financing
Debt purchasing
⢠Spot book acquisition
⢠Structural outsourcing
⢠Forward flow agreements
BUSINESS PROCESS OUTSOURCING SOLUTIONS
1 2 3
22. 22INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
RISK SERVICES
MARKET SEGMENTS
STRATEGY & PROSPECTS
ORIGINATE
Identifying & winning new customers
using data analytics
MANAGE
Enabling payment processes
& customer management
COLLECT
Solving our clientsâ impaired debt problem
through collections & capital solutions
CUSTOMERMANAGEMENT
SOLUTIONS
CAPITAL
SOLUTIONS
Payment & account management Collection services
Working capital financing Debt purchasing
58%
3%
13%
26%
Credit retail
Public sector & SOEs
Banking
Telcos
SMEs
Specialist lending
Education
Insurance
43%
8%
13%
6% 23%
7%
59%
6%
18%
9%
6%
100% 30%
32%
12%
5%
16%
5%
Lead generation & customer acquisition
Insurance
Credit retail Credit retail Credit retail
SMEs
Credit retail
Banking Banking
Banking
Banking
Telcos
Public
sector
Public sector
Public
sector
Specialised
lending
Specialised
lending
Specialised
lending
Telcos
Insurance
SMEs
Education
Insurance
CUSTOMER ENGAGEMENT LIFECYCLE
1 2 3
BUSINESS PROCESS OUTSOURCING SOLUTIONS
Telcos
Insurance
Telcos
CLIENTENGAGEMENTMODEL
Revenue splits by industry as at 31 March 2016
23. 23INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
CREDIT
RETAIL
Provide
broader
service offering
to achieve
deeper vertical
integration
into clientâs
collection
process
BANKING
Increase
penetration
into Tier I
banking
clients
SPECIALIST
LENDING
Provide
broader
service offering
to achieve
deeper vertical
integration
into clientâs
collection
process
PUBLIC
SECTOR,
SOEs
Cautiously
expand
services to
provincial
& national
government
institutions
& SOEs
TELCOS
Expand
into this
market
segment
INSURANCE
Expand
into this
market
segment
SMEs
Augment
offering to
include
credit risk
& credit
insurance
solutions.
Expand
client base
nationally
RISK SERVICES
LOOKING FORWARD
STRATEGY & PROSPECTS
VALUECHAIN
LEVERAGE EXISTING CAPABILITIES ACROSS
CONSUMER & SME MARKET SEGMENTS
ORIGINATE
MANAGE
COLLECT
CONSUMER
Continued investment into new technology & analytics
Offer specialised solutions in book buying & outsourcing
25. 25INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
FINANCIAL HIGHLIGHTS
FINANCIAL REVIEW
HEADLINE EARNINGS
PER SHARE
â˛20% TO
37.0 cents
HEADLINE EARNINGS
â˛19% TO
R210 million
CREDIT LOSS RATIO
IMPROVED TO
3.2%
FROM
3.9%
NON-PERFORMING
LOAN RATIO
IMPROVED TO
17.0%
FROM
17.9%
RETURN ON
AVERAGE ASSETS
ⲠTO
4.2%
FROM
3.9%
RETURN ON
AVERAGE EQUITY
ⲠTO
15.9%
FROM
15.0%
INTERIM DIVIDEND
FOR THE HALF YEAR
OF
12 cents
PER SHARE
â˛20%
DIVIDEND COVER
OF
3.1 times
FOR THE HALF YEAR
Numbers reported for the half year ended 31 March 2016 are reported on a IFRS 9 basis and are compared to pro forma IFRS 9 numbers reported for the half year ended 31 March 2015
26. 26INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
FINANCIAL POSITION
GROUP
⢠Conservative growth in gross loans & advances
from R6.5bn to R7.1bn â˛11%
âş Origination strategies remained conservative
targeting improved credit quality, new
product lines including Nissan minibus and
Toyota Corolla (Zebra)
⢠Equity R2.7bn â˛11%
âş Position remains robust despite IFRS 9
equity charge
⢠NAV per share 477.2 cps â˛12%
⢠Capital adequacyⲠto 42.8% from 41.3%
âş 29.3% Equity
âş 13.5% Subordinated debt
âş Will normalise with deployment of excess
capital into organic or acquisitive
opportunities
âş Uninterrupted access to debt capital markets
⢠Gearing level decreased marginally from 3.7
times to 3.6 times
FINANCIAL REVIEW
8989
9840
9097
9826
6149
7056
6447
7143
499.7
544.7
426.4
477.2
2864
3131
2457
2739
53.2
45.4
41.3
42.8
3.1 3.2
3.7 3.6
2014
IAS 39
2015
IAS 39
Pro forma 2015
IFRS 9
2016
IFRS 9
Total assets (Rm) Gross loans and advances (Rm)
Net asset value per share (cents) Equity (Rm)
Capital adequacy ratio (%) Gearing (times)
27. 27INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
FINANCIAL PERFORMANCE
GROUP
⢠HEPS â˛20% from 30.9cps to 37.0cps
⢠Headline earningsâ˛19% from R176m
to R210m
âş Net interest income â˛7% driven by:
â Gross loans and advances â˛11%
â NIM âź to 12.3%, from 12.9%
Âť Slight increase in cost of borrowing
Âť Change in product mix in TCRS
âş Improved credit metrics
⢠Return on assets Ⲡto 4.2% from 3.9%
⢠Return on equity Ⲡto 15.9% from 15.0%
âş Increase in earnings
âş Includes the effect of low returns earned
on excess capital
âş Most appropriate benchmark for group
ROE is that of the underlying
divisional metrics
⢠Quality of earnings remains high
FINANCIAL REVIEW
1198
1354
1308
1417
25.5
31.1
30.9
37.0
148
177
176
210
3.2
3.7 3.9 4.2
13.1
11.9
12.9
12.3
9.4
13.0
15.0
15.9
61.9 62.3
65.2
63.1
2014
IAS 39
2015
IAS 39
Pro forma 2015
IFRS 9
2016
IFRS 9
Total income (Rm) HEPS (cents)
Headline earnings (Rm) Return on assets (%)
Net interest margin (%) Return on equity (%)
Cost-to-income (%)
28. 28INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
PORTFOLIO MIX
⢠Contribution
âş Asset-backed lending increased marginally
to 56%
âş Risk services contribution decreased
marginally from 34% to 33%
âş Corporate support contribution of 11%
â management of un-deployed capital,
largely driven by increase in interest
rates since 1 October 2015
â cost savings as a result of simplified
group office structure as well as higher
recoveries from subsidiaries
⢠The future portfolio mix will shift as a result of
the constitution of the new risk services division
& will also be dependent on the nature of any
future acquisitions and organic growth
FINANCIAL REVIEW
Headline earnings
Rm Growth Contribution
2016
IFRS 9
2015
IFRS 9
2014
IAS 39 2016 2015 2016 2015 2014
Asset-backed lendingš 118 98 74 20% 32% 56% 56% 50%
Risk services 70 61 51 15% 20% 33% 34% 34%
GEO 22 17 23 29% -26% 11% 10% 16%
Total 210 176 148 19% 19% 100% 100% 100%
Cents per share 37.0 30.9 25.5 20% 21%
Asset-backed lending Risk services GEO
56%33%
11%
2016
IFRS 9 55%34%
11%
Pro forma 2015
IFRS 9
1. Excluding non-controlling interest
29. 29INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
ASSET-BACKED LENDING
PERFORMANCE
⢠Headline earnings attributable to the division
â˛23% to R118m
⢠Net interest margin decreased marginally from
11.1% to 11.0%
âş Funding costs increased slightly to 10.4% from
10.3%
⢠Non-interest revenue Ⲡ33% to R150m
âş Normalisation of cost recoveries from the
insurance cell
âş Comprehensive insurance
â 81% of financed clients insured by SA Taxi
â 3 299 non-financed minibus taxis also insured
âş Direct sales of new and refurbished vehicles
⢠Credit loss ratio improved from 4.1% to 3.4%
âş Continued strong collections in early CD states
âş Underpinned by rising vehicle prices
âş Efficiency of procurement, repair and resale
operations of Taximart
⢠Cost-to-income ratio increased marginally from
47.7% to 48.4%
⢠Effective tax rate increased from 9.3% to 20.0%
âş Impact of insurance cost recoveries
FINANCIAL REVIEW
670
788
742
855
74
97
96
118
11.4 11.5 11.1 11.0
41.8
43.2
47.7 48.4
9.7 10.3 10.3 10.4
2014
IAS 39
2015
IAS 39
Pro forma 2015
IFRS 9
2016
IFRS 9
Total income (Rm)
Headline earnings attributable to the group (Rm)
Net interest margin (%)
Cost-to-income (%)
Average cost of borrowing (%)
30. 30INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
ASSET-BACKED LENDING
CREDIT
⢠Gross loans & advances â˛12% to R6.7bn
âş Number of loans â˛3%
âş Credit granting criteria remain conservative
⢠Non-performing loan ratio improved to 18.0%
from 19.3%
⢠Credit-loss ratio ⟠from 4.1% to 3.4%
âş Continued strong collection performance
âş Enhanced via analytics applied to telematics
data
âş Improved quality of Taximart vehicles
âş Increased vehicle recovery values
âş Entry-level vehicles now carried at a fair
value of R90m (HY15: R152m), account for
<1.5% of portfolio
âş Target credit-loss ratio below 4%
⢠Provision coverage at 3.2x after tax credit loss
ratio
âş Early stage collection improvement
âş Increased recovery values (194 pre-owned
vehicles sold in April)
FINANCIAL REVIEW
23612
24931
24931
25591
5783
6576
5967
66885.6
5.1
9.3
7.85.9 5.4
4.1
3.4
30.4
26.0
19.3
18.019.5
20.6
48.3
43.3
2014
IAS 39
2015
IAS 39
Pro forma 2015
IFRS 9
2016
IFRS 9
Number of loans Gross loans and advances (Rm)
Provision coverage (%) Credit loss ratio (%)
Non-performing loan ratio (%) Non-performing loan coverage (%)
31. 31INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
Stage 1 Stage 2 Stage 3 Repo
IMPAIRMENT STAGE
IAS 39 Provisions IFRS 9 Provisions
EARLY ADOPTION OF IFRS 9
EXPECTED VS. INCURRED LOSS
IFRS 9 ADOPTION AND INCOME STATEMENT ILLUSTRATION
PROVISIONS
ADOPTION
ULTIMATE LOSS
REMAINS UNCHANGED
FINANCIAL REVIEW
32. 32INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
SA TAXI FACILITATES FINANCIAL INCLUSION
FINANCIAL REVIEW
Source: The World Bank Group, South Africa economic update, Focus on financial inclusion
Note: * = Based on an assumption that an individual with an Empirica score of under 640 would unlikely be able to obtain traditional access to credit including thin file customers
Distribution graph of SA Taxiâs bookâs Empirica score excludes thin file customers
SA TAXIâS IMPACT ON FINANCIAL INCLUSION FOR THE HALF YEAR 2016
Proportion of customer base
previously classified as financially excluded*
90%
Loans originated
(6 005 in FY2015)
3 382
Gross loans and advances
R6.7bn
596
598
604
603
602
32% 31%
27%
18% 18%
2012 2013 2014 2015 1H2016
Median Empirica score NPL %
⢠SA Taxi fills a critical funding gap, providing credit to entrepreneurs who
would otherwise be excluded from the formal economy given their credit
profiles. A large proportion of the South African population, approximately
12 million individuals, are classified as unbanked and have limited access
to capital. Low credit-rated individuals are less likely to service their loans
consistently, and hence are excluded by many commercial financial
institutions. As illustrated, SA Taxi has successfully extended credit to
individuals who fall outside of the requirements of traditional credit
providers. Assuming that individuals with an Empirica score of under 640
are unlikely to obtain credit from a traditional credit providers this means
that 90% of the individuals that SA Taxi finances would be unable to get
finance from a commercial institution
⢠SA Taxiâs continually improving credit-loss and non-performing loan ratios
in light of a consistent customer credit score are evidence of SA Taxiâs
thorough and informed understanding of the actual risk of these
underserved individuals. This twinned with SA Taxiâs extensive
experience, proprietary data, vertical integration and all encompassing
business offering has resulted in sustainable, responsible and successful
lending and small business development
0%
4%
8%
12%
450 500 550 600 650 700 750
SA TAXI PROVIDES ESSENTIAL FINANCIAL SERVICES TO UNDERSERVED SMALL BUSINESSES
Empirica score
Proportionofcustomerbase
Score below which
traditional banks are highly
unlikely to offer finance
33. 33INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
TRANSACTION CAPITAL
RISK SERVICES (TCRS)
⢠Headline earningsâ˛15% to R70m
⢠Agency revenue â˛6%
âş Increased focus on profitability of mandates
eliminating non-profitable legacy mandates
⢠Principal revenue â˛9%
âş Solid result given conservative approach to
book buying
âş Purchased book debts â˛9% to R571m
âş 159 principal books in total, 3 new distressed
debt portfolios acquired during the first 6
months of the financial year for R41m
⢠Cost-to-income ratio improved to 81.5%
from 82.4% due to effective cost management
âş Continued investment into new technologies
& analytics may yield further efficiencies
⢠Services EBITDA â˛15% to R97m
⢠Rand Trust performing well but remains vigilant
on the book quality as opposed to growth given
the challenging SA macro environment
⢠Principa is facing a difficult macro environment
FINANCIAL REVIEW
74
84
84
97
561
604
523
571
51
61
61
70
83.9 82.4 82.4 81.5
48
50 50 51
2014
IAS 39
2015
IAS 39
Pro forma 2015
IFRS 9
2016
IFRS 9
Services EBITDA (MBD and Principa) (Rm)
Purchased book debts (Rm)
Headline earnings (Rm)
Cost-to-income (%)
Principal % collections revenue
34. 34INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
CAPITAL MANAGEMENT
⢠SA Taxi accessed the local debt capital
markets via its various structures
âş Cumulatively raising R1.3bn
âş Strategy remains innovative and continue
to pursue multiple tactics to diversify
funding base
⢠11 institutions invested R1.4bn of debt capital
âş Asset-backed lending: R1.3bn
âş Risk services: R0.1bn
⢠Cost of borrowing increased from 10.8%
to 11.0%
⢠Capital adequacy Ⲡto 42.8% from 41.3%
âş Equity and debt capital position remains
robust
âş Well positioned to take advantage of
organic growth opportunities
âş Will normalise with deployment of
excess capital into organic or acquisitive
opportunities
⢠Interim dividend for the half year â˛20%
to 12cps
FINANCIAL REVIEW
636
918
918
1251
363
47
47
92
53.2
45.4
41.3
42.8
10.3
10.8 10.8
11.0
6.0
10.0 10.0
12.0
2014
IAS 39
2015
IAS 39
Pro forma 2015
IFRS 9
2016
IFRS 9
Risk services debt issued (Rm) Asset-backed lending debt issued (Rm)
Capital adequacy ratio (%) Average cost of borrowing (%)
Interim dividend per share (cents)
35. 35INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
FUNDING PHILOSOPHY
⢠Wholesale funding model proves to be robust
âş âPositive liquidity mismatchâ between
asset & liability cash flows
âş Adequate liquidity to meet operational and
capital investment funding requirements
whilst maintaining healthy financial
covenants
âş No exposure to overnight debt instruments
& limited exposure to 12-month instruments
âş Direct relationships with debt capital markets
âş Diversification by debt investor, funding
structure & credit rating
âş Ring-fenced funding structures per individual
asset class
âş Targeted capital adequacy levels per
asset class
FINANCIAL REVIEW
0-6 months 6-12 months 1-2 years 2-3 years 3-4 years 4-5 years 5+ years
Assets Liabilities Cumulative
Positive liquidity mismatch
Diversification by
funding structure
Diversification by
funder category
37%
44%
19%
Structured finance
On-balance sheet
Rated listed securitisation
24%
38%
12%
14%
12%
Life companies
Specialised asset managers and debt funds
Banks
Traditional asset managers
DFIs
36. 36INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
SHAREHOLDING
31 MARCH 2016
FINANCIAL REVIEW
47%
10%
10%
26%
7%
Directors of Transaction Capital and its subsidiaries & their associates
Old Mutual Investment Group South Africa Proprietary Limited
Allan Gray
Remaining institutional shareholders
Retail investors
38. 38INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
INVESTMENT CASE
TRANSACTION CAPITAL IS
CONCLUSION
âŚinvested in market-leading
companies
⢠Divisions are of scale holding leading positions in the markets they serve.
⢠Scalable business platforms which can be leveraged for profitable growth.
âŚin attractive market segments
⢠Taxi finance market is under-served, with the ongoing replacement of national taxi fleet stimulating demand for finance.
⢠Risk services division is the largest participant in a growing & fragmented market, with current economic environment
stimulating demand for its services.
âŚthat are well positioned
for growth
⢠Highly defensive businesses positioned to withstand difficult economic conditions.
⢠Organic growth through innovating solutions deeper into existing market segments & leveraging capabilities
to enter adjacent markets.
⢠Focused acquisition strategy & strong balance sheet.
âŚled by experienced & skilled
management teams
⢠Proven entrepreneurial, technical, financial & risk management skills.
⢠Successful devolution of responsibility to divisional executives & management.
⢠Continued group-wide investment in executive education, expertise & experience.
âŚwith specialised competencies
in finance & technology
⢠Superior data, leading-edge technology & analytics capabilities differentiate offerings & mitigate risk.
⢠Robust processes & skilled people enable effective capital & credit-risk management.
âŚ& a track record of delivering
superior earnings growth & returns
⢠Highly cash generative businesses that have delivered predictable returns over a period of time.
⢠Well capitalised balance sheet appropriately geared to generate acceptable risk adjusted returns.
âŚunderpinned by sound
governance practices
⢠Experienced, diverse, independent directors at group & subsidiary level.
⢠Institutionalised governance, regulatory & risk management practices.
40. 40INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MARCH 2016
DISCLAIMER
This presentation may contain certain "forward-looking statements" regarding beliefs or
expectations of the TC Group, its directors and other members of its senior management about the
TC Group's financial condition, results of operations, cash flow, strategy and business and the
transactions described in this presentation. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements, which are other than statements of historical facts. The words
"believe", "expect", "anticipate", "intend", "estimate", "forecast", "project", "will", "may", "should" and
similar expressions identify forward-looking statements but are not the exclusive means of
identifying such statements. Such forward-looking statements are not guarantees of future
performance. Rather, they are based on current views and assumptions and involve known and
unknown risks, uncertainties and other factors, many of which are outside the control of the TC
Group and are difficult to predict, that may cause the actual results, performance, achievements or
developments of the TC Group or the industries in which it operates to differ materially from any
future results, performance, achievements or developments expressed by or implied from the
forward-looking statements. Each member of the TC Group expressly disclaims any obligation or
undertaking to provide or disseminate any updates or revisions to any forward-looking statements
contained in this announcement.
QUESTIONS