Business

Transaction Capital will ‘cease to exist’ 

Jonathan Jawno

After a “watershed year” in 2024, Transaction Capital has said its current strategy will result in the company ceasing to exist and being replaced with Nutun, which will remain listed on the JSE.

In 2024, the company raised R1 billion from the unbundling and separate listing of WeBuyCars and disposed of its controlling interest in Mobalyz. 

Transaction Capital has also disposed of several operations within Nutun to strengthen its balance sheet and focus on its core businesses. 

In a trading update late on Thursday, the company said the conclusion of this strategy will be “Transaction Capital ceasing to exist in its current form”.

It will be replaced with the first-listed global specialist business process outsourcing (BPO) business on the JSE in the form of Nutun.

“While much has been achieved in the first year of this two-year process, the disappointing 2024 results are reflective of the fact that the transition is not yet complete,” the company said in its trading update. 

For the full financial year to the end of September 2024, Transaction Capital expects to post a loss from continuing operations of between R74 million and R222 million. This will translate into a basic loss per share of between 9.3 cents and 28.5 cents. 

In headline earnings per share terms, the company has a sliver of a chance to post a positive figure of 1.3 cents per share at the upper end of its range. The lower end is a headline loss per share of 18.9 cents per share. 

The total group picture is much more bleak for the company, with its loss widening to between R957 million and R1.14 billion when including discontinued operations. 

Its headline loss per share, including discontinued operations, is expected to be between 293.2 cents and 314.3 cents. 

Transaction Capital will release its results for the full year ended 30 September 2024 on 9 December. 

The company is looking forward to its transition to being listed as Nutun on the JSE. 

“The sale of Nutun Australia for a consideration of R624 million and the sale of Nutun Transact after the year-end for a consideration of R405 million served to simplify the Nutun business and strengthen its balance sheet and liquidity.” 

Nutun has been further enhanced by the recent appointment of Ruben Moggee, an experienced leader in the BPO industry, to run the Nutun International business, with Rob Amoils being responsible for Nutun South Africa. 

These leadership, structural and operational changes will need time to become embedded in the business, and these benefits are therefore not reflected in the 2024 results.

Nutun’s core earnings in FY2024 were impacted by funding constraints and market pricing dynamics that affected book acquisitions in the first half of the financial year, as well as a decline in the financial health of South African consumers. 

The international business was also impacted by the recalibration of a previously concentrated client base and increased operating costs that were not yet matched by revenue growth. 

Notwithstanding the difficult year experienced, with the strategic shifts described above, the company’s management continues to have confidence in the prospects of Nutun as it evolves into a listed global BPO player.

The group head office was loss-making due to legacy overheads and interest incurred on its debt prior to its early repayment as part of the WeBuyCars unbundling. T

he balance sheet is strong, with minimal debt and an R100 million net cash position at the end of the financial year. 

The head office has been rationalised and will be collapsed into Nutun, which will not be reported separately going forward.

This marks an end to the life of a company that was once a JSE darling and was seen as a solid investment into the taxi industry through its ownership of SA Taxi. 

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