reports
TRANSACTION CAPITAL sees an upgrade to Positive due to a better fundam...
The general evaluation of TRANSACTION CAPITAL (ZA), a company active in the Investment Services industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 4 out of 4 possible stars while its market behaviour can be considered as defensive. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Positive. As of the analysis date August 20, 2021, the closing price was ZAR 37....
- David Talpert
- Harry Botha
- Warwick Bam
Avior Financials | Alexander Forbes | Transaction Capital | JSE tradin...
Alexander Forbes announced a shareholder restructure as Mercer will sell its 34.4% shareholding in AFH. AFH will buyback a 200m shares from Mercer at 515cps for R1bn. We attended a Transaction Capital site visit to see SA Taxi's operations. Management are confident in SA Taxi's ability to grow attributable earnings by c.20% y/y. We highlight the returns from several large SA equity funds. Sanlam followed by Coronation performed the best with one-year returns of 17.7% and 15.5% respectively. P...
- David Talpert
- Warwick Bam
Alexander Forbes | Stranded in a sea of costs
Alexander Forbes (AFH) reported 1% revenue growth as operating income increased by 3%. Ongoing stranded costs of c.R100m that used to be allocated to the insurance division hinders the investment case. The business relies on macro conditions and employment growth. In the current environment, we do not expect much revenue growth. AFH appears to have reduced the loss of clients and key personal. The new management team is focusing on improving client outcomes. Therefore, we expect stable cli...
- David Talpert
Transaction Capital | Paying a growth premium
Transaction Capital (TCP) reported 18% HEPS growth despite a challenging economy. SA Taxi and TCRS have generated a five-year CAGR of 21% and 29% respectively. We believe SA Taxi's vertically integrated business model supports high margins. Aggressive book buying (R1.2bn in FY '19) supported TCRS's growth. Despite the defensive nature of the operations, any improvement in SA economic growth would support an acceleration in TCRS's collections revenue. The Group has excess capital of R950m, w...
- David Talpert
Transaction Capital | Due for a pullback
Transaction Capital (TCP) has been rewarded for consistent earnings growth with the share appreciating by 31% YTD. We believe TCP deserves a premium rating due to its defensive business model and ability to grow earnings in a difficult local operating environment. We believe both operations can sustainably generate an ROE of over 20%. However, the Group ROE will decline due to c.R1bn in excess cash. We are confident in the long-term prospects and believe management can continue delivering ear...
- David Talpert
- Warwick Bam
Alexander Forbes | Dust has settled
We rank Alexander Forbes' (AFH) corporate governance as “good†with a score of 3.28 (FY'18: 2.9). CY '18 was disruptive for AFH. The board dismissed Andrew Darfoor on 25 Sep '18 prompting further resignations from the CFO, CRO, Investments CEO and Chief HR officer. The swift appointment of Dawie de Villiers restored balance to the executive team and focused the strategy. Our previous report expressed concern for a deterioration in corporate culture and insufficient change management duri...
- David Talpert
- Harry Botha
- Warwick Bam
Avior Financials | Standard Bank results | Nedbank meeting notes | Inv...
Standard Bank reported a positive set of H1 ‘19 results as diluted HEPS increased 5.7% y/y. Despite the pressures on SBK's SA operations, we believe SBK's operations outside SA will continue to support upper single digit to low teens Group earnings growth over the next three years. We met with Nedbank management (RBB, CIB, Wealth and Rest of Africa teams, and Group management) yesterday and provide our meeting notes. Investec announced yesterday that the Group has received all necessary reg...
- David Talpert
- Warwick Bam
Alexander Forbes | Trying to turn the corner
Under new leadership, Alexander Forbes (AFH) has committed to simplifying the business and returning to its core competency as an independent, advice-led, pensions manager. The sale of AFH's insurance operations will release R400m in regulatory capital and focus growth towards a capital light administration, consulting and asset management model. Due to limited industry growth, value leadership and fierce competition will force consolidation. With regulatory tailwinds implemented in 2018/19, ...
- David Talpert
Transaction Capital | Rewarding consistency
Transaction Capital (TCP) delivered impressive H1 '19 results with core HEPS increasing by 17%. SA Taxi grew attributable earnings by 22% ahead of 13% earnings growth for TCRS. SA Taxi's vertically integrated business model has allowed it to gain market share while maintaining high margins. TCRS has taken advantage of a weak economy to aggressively acquire non-performing loan books. We expect TCP to deliver 16% HEPS CAGR over the next four years.
- David Talpert
Transaction Capital | Lots of fuel left in the tank
We expect Transaction Capital (TCP) to deliver 16% H1 '19 earnings growth. We expect SA Taxi to grow attributable earnings by 20% despite a challenging operating environment. TCRS's growth slowed due to a difficult operating environment. TCP's diversified business model is resilient delivering consistent earnings growth despite slow economic growth. We believe TCP has multiple opportunities to supplement earnings growth.
- David Talpert
- Warwick Bam
Alexander Forbes | Back to the drawing board
Alexander Forbes (AFH) has underperformed the market on a total return basis by 13% YTD (AFH-24%, JALSH: -11%). Despite reporting steady operational H1'19 results (core profit increased 9% YoY), the Board's strategic U-turn has diluted AFH's growth potential and undermined the Board's effectiveness. The Board has terminated a contract to modernise AFH's core insurance operating system and closed its retail life insurer. The existing Board approved both the IT Modernisation programme and AFH's...
- David Talpert
Transaction Capital | Defying economic headwinds
Transaction Capital (TCP) is not immune to a weak SA economy. However, the defensive nature of the taxi industry and debt collections allows TCP to maintain a high growth rate despite economic headwinds. We estimate growth for SA Taxi and TCRS of 20% and 19% respectively. We expect the Group to deliver 16.3% HEPS growth for FY '18. We believe TCP can maintain high-teens growth for the next three years.
- Warwick Bam
Alexander Forbes | Proxy voting and governance recommendation
We rank Alexander Forbes' (AFH) corporate governance as ‘adequate' with a score of 2.9 out of 5. AFH has underperformed the JSE Life Index by 11.2% CAGR since listing in 2014 (Annualised total shareholder return: AFH -3%; JLFEA +8.2%). AFH has refreshed its board and revised its remuneration policy for FY'19. We believe the quantum of executive remuneration is appropriate. However, incentive targets for variable compensation remain undisclosed and performance metrics lack benchmarked retur...
- David Talpert
- Harry Botha
- Warwick Bam
Avior Financials | Sanlam | MMI | Transaction Capital | JSE | Standard...
•SLM's FY'17 results based on an analysis of the change in the director's valuation (GEV). The return on GEV for the period was 14.8%, ahead of management's SA risk free rate plus 4% target. The GEV increased 10% YoY while the SLM share price increased 36% in CY'17. SLM currently trades at a 58% premium to the director's valuation. •SLM and SNT's purchase of the remaining 53.37% of SAHAM Finances through SEM. SAHAM Finances appears sub-scale with an underwriting margin of -0.7% in FY'17...
- David Talpert
- Warwick Bam
AFH | Alexander Forbes Group Holdings | Initiating coverage | More to ...
Alexander Forbes (AFH) is the largest retirement fund administrator in SA with c.R430bn in institutional AUA. In our view, AFH has historically been slow to capitalise on its latent member base, adopting a complacent approach to product distribution, capital allocation and cost efficiencies. We believe AFH is engineering a turnaround with the adoption of new IT systems enabling a single customer view. We believe predictive analytics, an enhanced online portal and partnership with Independent ...
Insider sold: A director sold 288,497 shares at 7.290ZAR and
A director at Alexander Forbes Group Holdings Limited sold 288,497 shares at 7.290ZAR and the significance rating of the trade was 61/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors ove...
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
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