Trading Day – Transaction Capital crushing it

Transaction Capital reported good annual earnings growth, with WeBuyCars making a big contribution.

WeBuyCars is now Transaction Capital’s largest business, generating over 40% of core earnings, and it is anticipated that it will continue to provide Transaction Capital with higher growth rates.

Stor-Age also reported strong earnings growth in its interim results, with headline earnings per share (HEPS) increasing 35% to R0.73.

US markets opened the week in the red as the S&P 500 closed 0.9% lower and the Nasdaq fell 1.1%.

The Nikkei 225 is flat in early morning trade, while the Hang Seng index rose 3.6%.

In the US, two of the biggest companies involved in selling and delivering goods are planning significant layoffs.

Amazon plans to lay off 10,000 workers, while FedEx will place some US workers on furlough.

Here is the biggest news of the day.

• Transaction Capital reports good earnings growth for the year. Core earnings per share from continuing operations increased 17% from last year to R1.72. However, basic earnings per share from continuing operations decreased by 31% to R2.32. It is due to the 2021 number containing a once-off fair value gain related to a minority interest in WeBuyCars. WeBuyCars is now Transaction Capital’s largest business, generating over 40% of core earnings, and it is anticipated that it will continue to provide Transaction Capital with higher growth rates. The company declared a final dividend of R0.37 per share, bringing the total dividend for the year to R0.70.

• Stor-Age reports strong earnings growth in its interim results. Headline earnings per share (HEPS) increased 35% to R0.73, while property revenue grew 19% to R513.7 million. The company declared an interim dividend of R0.60 per share.

• Delta Property Fund to sell Standard Bank Greyville for R44 million. The company has entered into an agreement with Zeder Trading to dispose of the property situated at 96 First Avenue, Greyville, Durban, for R44 million in cash. The proceeds of the sale will be used to pay down debt.

• Renergen has resumed LNG production, with helium to follow. The company previously halted operations to repair a faulty conduction oil system. The operations team will now work to allow the helium liquefaction module to be turned on.

• Amazon plans to lay off 10,000 workers before the busy Christmas season. A report from the New York Times highlights that the layoffs would primarily impact corporate and technology roles in Amazon’s devices segment, retail division, and human resources. While the reported layoffs would represent less than 1% of Amazon’s global workforce and 3% of its corporate employees, it still marks the largest cuts in the company’s history.

• FedEx’s freight unit plans to furlough US workers. The temporary layoffs come amid lower volumes suffered by one of the largest delivery companies in the world as the pandemic-driven e-commerce demand wanes. FedEx outlined cost cuts of up to $2.7 billion in September after the falling demand hampered profits. The company “will continue to evaluate the environment and bring back furloughed employees as business circumstances allow,” FedEx said in a statement.

• Warren Buffett’s Berkshire Hathaway revealed a $4.1 billion stake in Taiwan Semiconductors (TSMC). The news pushed shares in TSMC 6% higher as it renewed confidence in the chipmaker that saw its shares hit a two-year low last month.