UBS SA FINANCIALS CONFERENCE 2014

Transcription

1 1

2 TRANSACTION CAPITAL GROUP PROFILE AT 31 MARCH 2014* TRANSACTION CAPITAL LIMITED half year ended 31 March 2014 Emplyees: 3,586 Headline earnings: R148m ASSET-BACKED LENDING TOTAL INCOME 60% OF GROUP HEADLINE EARNINGS 46% OF GROUP GROSS LOANS & ADVANCES R6,101m HEADLINE EARNINGS R78m EMPLOYEES 634 CREDIT SERVICES TOTAL INCOME 34% OF GROUP HEADLINE EARNINGS 28% OF GROUP INCOME R407m HEADLINE EARNINGS R47m EMPLOYEES 2,913 Financier f independent SMEs in the minibus taxi industry Prvider f wrking capital t SMEs thrugh invice discunting & cmmercial debtrs management MBD CS cllects distressed cnsumer and cmmercial debt as agent n behalf f Suth Africa s leading credit prviders, and as principal n purchased bk debts Prvider f credit lifecycle cnsulting services, predictive mdelling and related sftware t credit prviders SOCIETAL RELEVANCE: SA Taxi finances SMEs that may nt therwise have access t credit frm traditinal banks, cntributing t jb creatin, and enabling and imprving the safety f public transprt in Suth Africa SOCIETAL RELEVANCE: Rand Trust prvides finance t SMEs that may nt therwise have access t credit frm traditinal banks, thereby facilitating SME grwth SOCIETAL RELEVANCE:MBD CS prvides cmprehensive credit reprts, financial educatin & debt negtiatin services t individuals. MBD CS is a large scale emplyer prviding training and career pprtunities fr Suth Africans SOCIETAL RELEVANCE: Principa Decisins wrks with a wide range f credit prviders in Suth Africa t ensure credit is granted respnsibly and nly marketed and prvided t individuals wh have the apprpriate financial capacity and ability t repay CEO: Terry Kier, subsidiary tenure 6 years CEO: Den Pienaar, subsidiary tenure 6 years CEO: Charl van der Walt, subsidiary tenure 13 years CEO: Ian Read, subsidiary tenure 5 years * Cntinuing peratins 2

3 RECENT HISTORY Listed n the JSE in June 2012 market capitalisatin f R4.67bn Earnings perfrmance in line with guidance at IPO FY12 Headline earnings up 31% FY13 Headline earnings up 35% 1H14 Headline earnings up 28% Value accretive dispsals in a challenging envirnment realised value de-risked the grup reduced cmplexity Prceeds Prfit n sale PE IRR Paycrp R937m R425m 18.7 times 18.2% Bayprt R1 336m R234m 6.7 times 32.6% Special distributin f 210 cps - March

4 MANAGEMENT ACTION ENHANCING SHAREHOLDER VALUE Octber 2013 Annuncement f the Bayprt Financial Services dispsal 10 March 2014 Special distributin f 210 cps paid t sharehlders Oct 13 Nv 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 TCP clsing share price (adjusted fr 210 cps special distributin) 4

5 STRATEGY TO GROW SHAREHOLDER VALUE Invest in rganic & acquisitive grwth f specialist financial services businesses, perating in underserved r niched sectrs f the financial services market, t render acceptable risk adjusted returns t sharehlders Ensure a defensible cmpetitive stance fr each business unit thrugh the definitin & delivery f a cmpelling value prpsitin t stakehlders Deliver value beynd that which the business units wuld generate as free standing entities: interventin; directin; prtfli management (acquisitins and sales) 5

6 ABOUT SA TAXI Funded in 1998, SA Taxi s sle fcus is vehicle finance fr minibus taxi peratrs SA Taxi is an enabler f affrdable and safe transprt t 19 millin cmmuters daily. A ttal f minibus taxi peratrs ( accunts) were financed by SA Taxi as at 31 March 2014 SA Taxi has facilitated the creatin f ver black SMEs and is an imprtant catalyst fr empwerment and develpment f start-up SMEs in Suth Africa. It prvides an pprtunity fr previusly disadvantaged individuals t start a business frm which they can earn a living Prvisin f finance t SME minibus taxi peratrs wh wuld nt therwise have access t credit frm traditinal surces A cntinuus engagement with the relevant industry stakehlders (e.g. peratrs, taxi assciatins, the Department f Transprt, OEMs) is critical t success The interplay between vehicle make, capacity and quality tgether with the required needs f the peratr in terms f their rute and usage, require a bespke credit prcess in rder t fully understand and accunt fr the risk 6

7 HOW SA TAXI GROWS SHAREHOLDER VALUE SA Taxi s business mdel has been successful because f specialisatin and extensive vertical integratin in Suth Africa s taxi industry: Fcus extends well beynd being just the financier f a taxi vehicle Direct sales f new and pre-wned vehicles allws SA Taxi t capture additinal margin dealer margin credit risk mitigatin Taximart was created in 2009 t receive, refurbish and sell repssessed minibus taxis in the secndary market and imprve SA Taxi s recveries n these vehicles Specifically designed insurance prduct fr taxi peratrs Cntrl f prcurement thrugh Taximart decreases csts f insurance claims Credit risk mitigatin via the intrductin f additinal revenue streams fr clients: SA Taxi Media Shayela rewards Leverage cre skill set t ther asset classes Bakkie finance pilt 7

8 ABOUT MBD CREDIT SOLUTIONS Funded in 1999, SA s largest prvider f utsurced accunts receivable management services Cllects distressed cnsumer and cmmercial debt as agent n behalf f Suth Africa s leading credit prviders and as principal n acquired debt bks Prvides a number f ancillary services, the largest cmpnent theref being standby administratin services t ther credit prviders Servicer Quality Rating frm Glbal Credit Ratings C. ( GCR ) as at June 2014: special servicer SQ1-(za) - reflects the grup s ability t reactivate and/r wrk ut lans, as well as its internal cntrl envirnment and strng financial cnditin Fulfilment capability achieved thrugh efficiencies and scale 10 call centres acrss the regin mre than cllectin agents mre than 60 agency clients including banks, credit retailers, municipalities, parastatals, telecmmunicatins and insurance superir infrastructure and IP, the Cheetah database huses large vlumes f current and histrical data cnsumer: 15 millin cnsumer ID numbers cmmercial: mre than entities scale is a barrier t entry and a key cmpetitive advantage 8

9 MBD FACTS AND FIGURES FOR THE YEAR ENDING 30 SEPTEMBER 2014 Ttal grss cllectins Rbn 2.2bn Ttal payments received Number 5.1m Successful debit rders submitted Number 2.5m Ttal utbund calls Number 52.4m Ttal SMSes sent Number 117.3m Ttal letters sent Number 6.0m Custmer queries reslved Number 1.3m Debt currently under management (31 March 2014) Rbn 29.7bn 9

10 HOW THE CREDIT SERVICES DIVISION GROWS SHAREHOLDER VALUE Cre cmpetencies can be cmbined t prvide full service ffering t clients Cllectins agency principal hybrid (municipal) Cnsulting New client acquisitins Infrmatin technlgy cnsulting sftware sales Business prcess utsurcing cst pressures f nn-cre functins at credit and service prviders creates an utsurcing pprtunity Full service ffering extends ver numerus markets Cnsumer banking, retail, municipal, lifestyle 10

11 HOW TRANSACTION CAPITAL GROWS SHAREHOLDER VALUE - MOBILISING CAPITAL Successfully cmmercialised previusly un-investable asset classes taxi lans charged ff cnsumer debt Dedicated in-huse capital markets team Lng standing relatinships with funders maintained Ttal f R23 billin was raised frm lcal and internatinal investrs frm March 2006 t March 2014 Funding mdel diversified funding base structure t accmmdate investr preference withut cmprmising peratinal flexibility psitive liquidity mismatch is maintained cst f funding is reducing 11

12 HOW TRANSACTION CAPITAL GROWS SHAREHOLDER VALUE - DEPLOYMENT OF CAPITAL Acquisitin strategy fcussed within ur existing divisins where we are the market leader Specialisatin in familiar business lines will create mst value Asset-backed lending new verticals such as bakkie finance Credit services pprtunities in a challenging cnsumer credit envirnment capital pprtunities including bk buying, rights t cllect and business prcess utsurcing Sund M&A track recrd but patience is required 12