The group saw a surge from 48.5 cents in 2013 to 57 cents in 2014.
(WATCH VIDEO: Transaction Capital H1 HEPS rises 28%)
The company operates in the financial services sector perceived to be of higher risk that requires distinctive or specialised competencies, and has historically been under-served.
The change in portfolio followed the sale of the group’s unsecured lending and payment services businesses.
“This was a response to emergent opportunities to generate significant returns and realise value for shareholders while reducing the complexity and risk facing the group,” reported the company.
The group results for the year ending 30 September 2014 saw continuing headline earnings increasing 17 per cent to 330 million rand.
[DATA TCP:Transaction Capital Limited]’s services division saw its earnings before interest, taxes, depreciation, and amortisation for continuing operations surging 18 per cent to 159 million rand.
The group reported a non-performing loan ratio improving by 11 per cent to 25.7 per cent with the credit loss ratio remaining stable at 5.2 per cent.
In a statement, the company said following the disposal of Paycorp and Bayport, as well as the capital distribution, Transaction Capital’s equity and debt capital position remains strong.
“The capital adequacy level of 49.5 per cent is particularly robust and Transaction Capital retains sufficient access to the debt capital markets.”
The group expressed concern over the country’s financial services regulatory environment.
“Regulatory uncertainty continues, as evidenced by the process followed by regulators and government in approving the National Credit Amendment Act, which has now been signed by the President with the date of enforcement still to be announced,” said the group.
“The lack of enforcement of existing law and regulation constitutes a threat to unsophisticated users and compliant operators within the financial services sector.”
Transaction Capital says, South Africa’s depressed consumer economy does, however, provide Transaction Capital’s credit services division with substantial opportunity as its client base displays an increased demand for credit risk management and capital solutions.
“It is also important to note that following the sale of Bayport, Transaction Capital is less exposed to the consumer credit environment and the regulations pertaining thereto.”
(WATCH VIDEO: Transaction Capital to sell Bayport stake for R1.3bn)
The group has expressed confidence with future growth prospects.
“Transaction Capital expects sustainable headline earnings growth from continuing operations in the medium to long term,” said the company.
“This organic growth may be enhanced by acquisitive activity which the group actively continues to seek. These opportunities are expected to ensue within the existing divisions, where our distinctive competencies can be leveraged.”