Transaction Capital HY HEPS up 52.7%

Transaction Capital, a leading South African financial services company, has reported a robust set of results despite facing industry challenges. In a recent interview with CNBC Africa, David Hurwitz, the CEO of Transaction Capital, shared insights into the company's performance and future outlook. Hurwitz highlighted the impact of the temporary shutdown of Toyota's plant on SA Taxi, one of Transaction Capital's key businesses. The closure of the plant for seven months significantly impacted SA Taxi's ability to originate new loans for minibus taxis, a popular choice in South Africa. As a result, loan origination numbers saw a decline in the second half of the year. However, Transaction Capital's overall performance remained strong, with core earnings growing by 24% and per share earnings by 17%, in line with the company's long-term growth trajectory. Hurwitz emphasized the resilience of the company's other two businesses, Newton and WeBuyCars, which experienced rapid growth. Despite the challenges faced by the industry, Hurwitz expressed confidence in Transaction Capital's ability to deliver consistent earnings and drive shareholder value. While the company's stock price has seen a decline of 11% year-to-date, Hurwitz reiterated that the market's perception does not impact the company's focus on running a sound business. He acknowledged the structural shift in the pre-owned car market, with more consumers opting for second-hand vehicles over new cars due to affordability constraints. WeBuyCars, Transaction Capital's car dealership business, has benefited from this trend, with volumes increasing by 40% year-on-year. The company's ESG strategy also plays a significant role in its business model, particularly in the minibus taxi industry. Transaction Capital provides finance to independent SMEs in the taxi sector, supporting the purchase of safer, more fuel-efficient vehicles. While there have been pilot projects for electric vehicles in the minibus taxi industry, Hurwitz noted the need for more affordable options and government support to drive widespread adoption. Despite the challenges ahead, Transaction Capital remains committed to driving sustainable growth and making a positive impact in the communities it serves.