Transaction Capital CEO David Hurwitz will step down as chief executive and all his board positions following the company’s poor performance.
On Monday, Transaction Capital released a trading statement for its financial year ending 30 September 2023. The results are set to be really bad.
The company said its SA Taxi business restructuring has continued to put pressure on its profits, and WeBuyCars will see a significant decrease in earnings.
Transaction Capital expects its core, headline, and basic earnings per share to be even lower than the dismal expectations shared in March.
This means its net profits would, at best, be 152% lower than the 2022 financial year. Investors can expect at least a R648 million net loss from the company.
It also noted that WeBuyCars’ profits will be 20% down from 2022, and Nutun’s profits will grow at a lower rate than previously expected.
SA Taxi, WeBuyCars, and Nutun jointly contributed more than 99% of Transaction Capital’s net profits in 2022.
As if the poor trading statement was not enough to worry investors, a second announcement raised even more concern.
David Hurwitz, Transaction Capital’s CEO since 2014, is to step down from his position on seemingly bad terms.
The statement was straight to the point without mentioning Hurwitz’s contributions to the company or thanking him for his time at the group. It looks like he wasn’t even given the chance to resign.
It merely said Hurwitz would step down as CEO of Transaction Capital, as a director of all boards and as a member of all committees within the group.
“David will be available to Transaction Capital for the 2024 calendar year, which will include his notice period, to ensure a smooth handover of his duties,” it said.
Jonathan Jawno, co-founder and executive director of Transaction Capital, will replace Hurwitz. He currently serves as executive chair of Mobalyz.
The market’s reaction to the trading updates was swift. On Tuesday morning, the share price fell by around 20%.
Transaction Capital’s share price has lost over 80% of its value since the end of its interim period in March when it reported a shocking R1.9 billion loss for the H1 2023 period.
Transaction Capital currently trades around R5.50 per share compared to R34.00 per share at the beginning of the year.
It is clear that investors and Transaction Capital’s board have had enough and want to see action to fix the company and improve its share price.