Transaction Capital reports 36% increase in total dividend per share
Transaction Capital released its preliminary audited summarised consolidated financial results for the year ended 30 September 2016.
Headline earnings R458 Million, up 17% (2015 R393 million)
Headline Earnings per share 80.6 cents, up 17% (2015 69.0 cents)
Return on average equity (ROE) 16.9% (2015 16.7%)
Total dividend per share 30.0 cents up 36% (2015 22.0 cents Total dividend cover 2.7 times down 13% 2015 3.1 times)
Transaction Capital's operations delivered strong financial results despite challenging market conditions persisting throughout the 2016 financial year. Headline earnings and headline earnings per share increased by 17% to R458 million and 80.6 cents per share respectively. SA Taxi grew headline earnings by 20% whilst TCRS grew headline earnings by 25%.
Transaction Capital is in the process of finalising three acquisitions which will be funded out of Transaction Capital's excess cash.
Group Executive Office:
The group executive office contributed R41 million to the group's headline earnings in the 2016 financial year, a decrease of 20% from the 2015 financial year's earnings, largely due to lower interest earned on cash on hand post the scheduled receipt of the R215 million vendor loan from Bayport as part of the sale of that business during 2014.
Transaction Capital is pleased with the current composition of its portfolio and the defensive positioning of its divisions, which enables it to prosper despite South Africa's challenging macro- and socio-economic context. The constitution of Transaction Capital's portfolio of assets under two distinct divisional pillars has enabled Transaction Capital to focus on deploying its capital and resources to drive organic and acquisitive growth, thus enhancing the scale and entrenching the leading market positions of its divisions.
Transaction Capital has remained conservative in its acquisitive search, favouring a narrow focus on assets operating within Transaction Capital's existing or adjacent market segments. The assets acquired generate quality earnings with high cash conversion rates and present strong organic growth prospects, rendering them sound acquisitions on a standalone basis. However, Transaction Capital views these businesses as platforms to be developed and enhanced via active management, by sharing skills and technology, and by utilising TCRS's proprietary data to offer value added services which will enhance our clients' risk-adjusted returns.
Transaction Capital remains committed to investing in the organic and acquisitive growth of SA Taxi and TCRS, to augment and develop these platforms, to enhance their scale and entrench their leading market positions, thereby generating societal and stakeholder value. Transaction Capital has a proven track record of creating value by identifying, pricing, acquiring and integrating new businesses, and then developing them to achieve scale and leading positions in their market segments.
In light of Transaction Capital's positioning within this socio-economic context, management believes that it is well positioned to achieve continued growth in the medium term. In addition the composition of earnings will become more evenly weighted between its two divisions post the acquisitions. The financial information on which this prospect statement is based has not been reviewed and reported on by Transaction Capital's external auditors.