Nutun Limited · JSE:NTU
Nutun — Transaction Capital — H1 2015 Earnings Presentation
24 slides from Nutun's earnings presentation, 2015
Slide 1: Interim 2015
INTERIM 2015 (a Transaction Capital
Slide 2: Highlights
HIGHLIGHTS INTERIM RESULTS FOR THE | : HALF YEAR ENDED 31 MARCH 201 5
Slide 3: Financial Highlights
HIGHLIGHTS FINANCIAL HIGHLIGHTS CONTINUING HEADLINE EARNINGS PER SHARE ▲22%TO NON-PERFORMING CONTINUING 31.1 cents LOAN RATIO RETURN ON NON-INTEREST improved AVERAGE EQUITY REVENUE ▲ TO 11.9% ▲ 10% CONTINUING TO 24.3% FROM 9.4% TO HEADLINE EARNINGS FROM 28.6% ▲20%TO R573 million R177 million CREDIT
Slide 4: Strategic and Operational Highlights
HIGHLIGHTS STRATEGIC AND OPERATIONAL HIGHLIGHTS Reconstitution of operating divisions (asset-backed lending & risk services) ‒ Occupy leading market positions ‒ Experienced & skilled management teams ‒ Platforms to develop new products & expand into new markets Group executive office (GEO) simpl
Slide 5: Environment
ENVIRONMENT INTERIM RESULTS FOR THE | HALF YEAR ENDED 31 MARCH 201 5
Slide 6: Environment: economic, capital markets, regulatory
ENVIRONMENT ENVIRONMENT Economic environment ‒ South Africa’s macro- & socio-economic growth remains constrained ‒ Undersupply of electricity & increased electricity costs ‒ Little or no improvement in employment levels or real wage growth ‒ Stable interest rates & reduced fuel prices eased financ
Slide 7: Defensive positioning in a challenging environment
ENVIRONMENT ENVIRONMENT Defensive positioning enables group to prosper despite a challenging & low growth environment in South Africa Asset-backed lending ‒ Replacement of ageing national minibus taxi fleet stimulates demand for taxi finance ‒ Commuters’ use of minibus taxis remains consistent ‒
Slide 8: Strategy and Prospects
STRATEGY AND PROSPECTS INTERIM RESULTS FOR THE | HALF YEAR ENDED 31 MARCH 201 5
Slide 9: Transaction Capital Group Profile at 31 March 2015
STRATEGY AND PROSPECTS TRANSACTION CAPITAL GROUP PROFILE – at 31 March 2015 TRANSACTION CAPITAL LIMITED – half year ended 31 March 2015 | Employees: 3 877 | Headline earnings: R177m ASSET-BACKED LENDING RISK SERVICES An unconventional asset-backed lender, A provider of a comprehensive range of curre
Slide 10: Asset-backed lending distinctive competencies
STRATEGY AND PROSPECTS ASSET-BACKED LENDING distinctive competencies MARKETS ESTABLISHED PILOT FUTURE Income POSSIBILITIES 16 seater Long distance New taxi producing Utility purpose (Research phase) minibus taxi ¹ minibus taxi ² brand ³ bakkie 4 bakkie 4 EQUITY & DEBT CAPITAL MANAGEMENT LOAN ORIGINA
Slide 11: Risk services distinctive competencies
STRATEGY AND PROSPECTS RISK SERVICES distinctive competencies MARKETS CONSUMER SME Retail Banking Insurance Public sector Other DATA SERVICES New client acquisitions CREDIT LIFECYCLE CONSULTING COLLECTION SERVICES: AGENCY DISTINCTIVE COMPETENCIES CAPITAL SOLUTIONS Book acquisitions Invoice discounti
Slide 12: Financial Results
FINANCIAL REVIEW INTERIM RESULTS FOR THE | HALF YEAR ENDED 31 MARCH 201 5
Slide 13: Financial Position - Group
FINANCIAL REVIEW FINANCIAL POSITION - GROUP ● Solid growth of gross loans & advances from R6.1bn to R7.1bn (▲15%) 53.2 ‒ Origination strategies targeting improved credit quality, new product lines including 45.4 bakkie & Nissan minibus ‒ Notable growth in Rand Trust of 37% 36.5 ● Equity R3.1bn (▲9%)
Slide 14: Financial Performance - Group
FINANCIAL REVIEW FINANCIAL PERFORMANCE - GROUP ● HEPS from continuing operations ▲22% 64.3 from 25.5 cps to 31.1 cps 61.9 62.3 ‒ Organic in nature ● Headline earnings from continuing operations ▲20% from R148m to R177m ‒ Growth in gross loans & advances (▲15%) 13.0 13.1 13.0 ‒ Stable net interest ma
Slide 15: Portfolio Mix
FINANCIAL REVIEW PORTFOLIO MIX Headline earnings Rm Growth Contribution ● Change to the segmental mix of headline 2015 2014 2013 2015 2014 2015 2014 2013 earnings due to: Asset-backed lending 97 74 65 31% 14% 55% 50% 56% ‒ Asset-backed lending contribution grew more quickly than risk services or GEO
Slide 16: Asset-Backed Lending – Performance
FINANCIAL REVIEW ASSET-BACKED LENDING – PERFORMANCE ● Headline earnings ▲31% to R97m 45.1 ‒ Net interest margin ▲ slightly to 11.5% 43.2 41.8 ‒ Non-interest revenue ▲ 9% • ▲ Vehicle tracking revenue • ▲ Revenue from direct vehicle sales ‒ ▼Credit loss ratio from 5.6% to 5.1% ‒ Marginal ▲ in cost-to-
Slide 17: Asset-Backed Lending – Credit
FINANCIAL REVIEW ASSET-BACKED LENDING – CREDIT ● Gross loans & advances ▲14% to R6.6bn ‒ Number of loans ▲6% ‒ Exclusive focus on premium vehicles 30.4 ‒ Write-offs of discontinued entry-level 28.6 vehicles accelerated 26.0 ‒ Increased bakkie & Nissan minibus taxi originations 20.6 ● Non-performing
Slide 18: Risk Services – Rand Trust, MBD, Principa
FINANCIAL REVIEW RISK SERVICES – RAND TRUST, MBD, PRINCIPA ● Headline earnings ▲ 20% to R61m ‒ High growth in MBD & Rand Trust 83.9 83.9 ‒ ▼ Cost-to-income ratio to 82.4% 82.4 • Stringent cost management at MBD • Economies of scale at Rand Trust 50 47 48 ● Agency revenue ▲20% to R180m ‒ More work fr
Slide 19: Capital Management
FINANCIAL REVIEW CAPITAL MANAGEMENT ● Uninterrupted access to debt capital markets ● 7 institutions invested R965m of debt capital 53.2 ‒ Asset-backed lending: R918m ‒ Credit services: R47m 45.4 303 ● New debt investors: 47 ‒ 2 new to group ‒ 2 new to asset classes 363 36.5 ● Debt environment still
Slide 20: Funding Philosophy
FINANCIAL REVIEW FUNDING PHILOSOPHY Diversification Diversification ● Proven wholesale funding model by funder category by funding structure ‒ “Positive liquidity mismatch” between asset & liability cash flows 13% 1% 10% 3% ‒ No exposure to overnight debt instruments 30% & limited exposure to 12-mon
Slide 21: Shareholding
FINANCIAL REVIEW SHAREHOLDING ● No change in the free float percentage of 7% 54% ● Percentage held by institutional investors stable with a marginal reallocation 22% between institutional shareholders 46% ● Percentage held by retail investors stable 31 March 2015 at 7% 8% 8% 9% Directors of Transact
Slide 22: Conclusion
CONCLUSION INTERIM RESULTS FOR THE | HALF YEAR ENDED 31 MARCH 201 5
Slide 23: Conclusion
CONCLUSION CONCLUSION Strong organic risk adjusted returns, sustainable over the medium term ‒ Reconstituted operating divisions ‒ Established businesses with experienced & skilled management teams ‒ Platforms to develop new products & expand into new markets ‒ Continue to reinvest significantly i
Slide 24: Questions
QUESTIONS INTERIM RESULTS FOR THE | HALF YEAR ENDED 31 MARCH 201 5