2019

Integrated Annual Report

Investment case

Transaction Capital’s business model supports a compelling and unique investment case:

TRANSACTION CAPITAL
COMPRISES A

DIVERSIFIED PORTFOLIO
OF FINANCIAL SERVICES
ASSETS
 
  • Two well established, autonomous and unique financial services businesses:
    • SA Taxi.
    • TCRS.
  • Positioned in attractive market segments occupying leading market positions.
  • Highly defensive businesses able to withstand difficult economic conditions.
  • Deep vertical integration enabling the application of specialised expertise to mitigate risk, participate in margin and provide a broader service to clients.
  • Superior data, leading-edge technology and analytics capabilities differentiate our offerings, inform business decisions and mitigate risk.
  • A diversified business model enabling:
    • A unique blend of highly cash-generative and capital-related businesses.
    • A diversified revenue model across adjacent market segments and geographies.
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WITH A BESPOKE AND
CONSERVATIVE CAPITAL
STRUCTURE

INCORPORATING
R950 MILLION OF
UNDEPLOYED CAPITAL
 
  • Conservative equity capital structure to fund organic growth and acquisition activity.
  • Capital management approach supporting sustainable growth through an optimal balance of debt and equity.
  • Proven ability to raise debt and equity capital efficiently from a diversified range of local and international investors.
  • Ungeared and debt-free at holding company level.
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ESTABLISHED AS A
SCALABLE FINANCIAL
SERVICES PLATFORM
 
  • Decentralised businesses that are self-sustaining and sizeable in their own right.
  • Highly competitive, efficient, technology-driven operating platforms which manage our assets.
  • For SA Taxi and TCRS to develop new products and expand into new markets.
  • For Transaction Capital to innovate in introducing new organic and acquisitive growth opportunities.
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LED BY AN
EXPERIENCED
ENTREPRENEURIAL
OWNER-MANAGER TEAM
 
  • Identify, assess, develop and partner with entrepreneurial, innovative and experienced founders, owners and managers of businesses.
  • Ownership culture.
  • Empowered, entrepreneurial, innovative, proven and long-serving leadership.
  • Specialised intellectual capital applied over a much smaller asset base than in larger organisations.
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AND UNDERPINNED BY
A ROBUST GOVERNANCE
FRAMEWORK AND
SOUND GOVERNANCE
PRACTICES
 
  • Experienced, diverse and independent directors at group and subsidiary level.
  • Institutionalised governance, regulatory and risk management practices.
  • Conservative accounting policies (including the early adoption of IFRS 9 and IFRS 17).
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WHICH TOGETHER
POSITION THE GROUP
FOR
SUSTAINABLE
HIGH-QUALITY
EARNINGS GROWTH
 
  • Active investor in and operator of credit-orientated alternative assets:
    • By identifying opportunities to leverage our high intellectual property, leading technologies and low-cost operational infrastructure.
    • To expand into attractive adjacent market segments, related alternative asset classes and geographic markets.
    • By applying expertise to assess, mitigate, underwrite and price credit risk in originating new assets or acquiring existing assets.
  • Unrelenting investment into and precise implementation of innovative strategic initiatives.
  • Track record of high-quality earnings with high cash conversion rates and strong organic growth prospects.
  • Dividends growing faster than earnings.
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TO GENERATE RISK-
ADJUSTED INTEREST
RETURNS AND CAPITAL
APPRECIATION
 
  • Value-led investment approach.
  • Seeking investment outcomes that combine attractive risk-adjusted interest returns from our asset portfolios enhanced by capital appreciation in the value of the operating platforms.
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AND THE DELIVERY
OF
MEANINGFUL
SOCIAL IMPACT
 
  • Businesses deliberately positioned in relation to demographic and socio-economic trends to deliver shared value through commercial returns and meaningful and positive social impact.
  • SA Taxi facilitates:
    • Asset ownership by black-owned SMEs, financial inclusion, SME empowerment and sustainable job creation.
    • Improved public transport infrastructure.
    • Environmental sustainability.
  • TCRS facilitates:
    • Credit rehabilitation of over-indebted consumers.
    • Lenders to maintain cleaner balance sheets to continue extending credit affordably.