WeBuyCars-owner swings to a loss amid SA Taxi struggles

Transaction Capital swung from a profit to a loss in the 2023 financial year as its SA Taxi business’ loss deepened.

Transaction Capital – which owns WeBuyCars, SA Taxi, and Nutun – released its results for the year ended 30 September 2023 today.

Revenue increased to R23.48 billion from R20.86 billion in 2022.

However, basic earnings per share from continuing operations swung to a basic loss per share of 121.6 cents.

The company also made a headline loss per share from continuing operations of 99 cents, compared to earnings of 224.4 cents in 2022.

This saw the company swing from a profit of R2.0 billion in 2022 to a loss of R1.34 billion for the year, of which R3.8 billion is attributable to SA Taxi.

In 2023, SA Taxi recorded a headline loss from continuing operations of R3.7 billion for the year, deeper than the R2.1 billion loss reported in H1 2023. 

The company said that this was driven primarily by a R1.1 billion increase in repossessed vehicle stock write-downs as further material changes were made to SA Taxi in H2 2023.

WeBuyCars’ earnings were also down 14% to R658 million, despite the volumes of vehicles sold having grown by 13% to 141,851.

 Nutun’s earnings grew to R479 million, up 10% compared to 2022.

“At the holding company level, Transaction Capital is well capitalised,” the company said.

“WeBuyCars and Nutun combined adequately cover the net debt (circa R1.1 billion) from both a dividend flow and asset cover perspective. Despite the aforementioned, management is actively pursuing restructuring or reducing the debt.”

The company said SA Taxi’s operational restructure, focused on stabilising the business through cost reductions and repositioning the business in the pre-owned minibus taxi market, is on track for completion in March 2024.

“With the strategic focus on the origination of pre-owned taxis at lower volumes and the progress made in simplifying and downscaling SA Taxi’s auto refurbishment and repair facilities, management has decided not to proceed with the sale of this business,” it said. 

“The auto refurbishment and repair business had been classified as a discontinued operation in H1 2023 and has now been reclassified in continuing operations.”

Transaction Capital said it has no intention of pursuing a rights offer, and dividends have been suspended until the company has been successfully restructured.