Transaction Capital CEO David Hurwitz, who will be stepping down as chief executive, said he was not pushed and making way for Johnny Jawno to take over was the right thing for the company.
His comments followed an announcement from Transaction Capital on Monday that he will step down as CEO, as a director of all boards and a member of all committees.
“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, a co-founder and executive director of Transaction Capital, will, in addition to his role as chairman of SA Taxi, assume the role of CEO of Transaction Capital.”
The company added that Jawno’s primary focus as chief executive would be unlocking shareholder value.
The announcement that Hurwitz was stepping down was accompanied by a trading statement for Transaction Capital’s financial year ended 30 September 2023.
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.
Considering the company’s poor performance and the terse statement regarding Hurwitz’s departure, it was easy to assume he was pushed.
However, Hurwitz said he was not pushed out and will remain at Transaction Capital for at least another year.
He has been Transaction Capital CEO for a decade, and good acquisitions and great growth characterised the first eight years.
However, since the Covid-19 pandemic, their taxi business started to suffer. 2023 has been particularly bruising for Transaction Capital, with most business units suffering.
The share price plummeted after a poor trading statement in March and continued to slide after it released its results. Something had to be done.
Hurwitz revealed in a Moneyweb interview that he and the founders have been discussing the CEO issue for two months and agreed it was the right thing for him to step down.
“The founders are stepping forward in any event, and I think it’s great that they’re stepping forward,” he said.
He said it is appropriate for him to make way for Jawno because “this is a time when this organisation needs to be founder-led”.
“So, it’s a joint decision, as I said, to put the right guy into the right role,” Hurwitz said.
He added that he will keep his seat at the table. “I’ll remain CEO, and I’ll steer the ship into December 2023 to close out this financial year,” he said.
He will also remain a Transaction Capital employee until December 2024 to help with the transition process.
“This needs to be a very smooth succession process. I’ll help Johnny [Jonathan Jawno] transition into the role,” he said.
“It’s really sad to be leaving on a low – but that’s life,” he said.