Trading Day – Transaction Capital without WeBuyCars

Transaction Capital reported a net loss of R1.3 billion in its interim financial results released this morning. 

This loss comes after the successful unbundling of WeBuyCars earlier this year. The company also saw a decline in revenue. However, it reported an increase in equity from the previous year.

Coronation’s interim revenue improved by 4% to R1.89 billion, and its profit increased by 3,086%. After being hit with a major tax expense in 2023, the company’s profits have grown for the first time since 2022. 

Alexander Forbes released a trading update, saying it expects its basic earnings per share for the 2023/24 financial year to stay flat or decrease by 10%.

While the company is still finalising its financial results, the board is expecting promising results and increases.

Here is the biggest investment news of the day.

• Transaction Capital reported a net loss of R1.3 billion. The company reported its results for the six months through March 2024. This follows the successful unbundling, placement, and separate JSE listing of WeBuyCars. The placement raised R1 billion for the company, which allowed it to materially pay off its debts shortly after H1 2024 and move to a net cash position at holding company level. Revenue from continuing operations declined by 24% to R981 million. This is an improvement from last year’s R1.6 billion net loss. The group’s equity position improved by 6% to R7.78 billion. The company said that after the first half of its financial year, it can now be regarded as an unencumbered investment holding company comprising 100% of Nutun, 75% of Mobalyz and net cash of approximately R120 million.
• Coronation’s revenue improved by 4% to R1.89 billion, and its net profit increased by 3,086% to R701 million. The asset manager released its interim results for the six months through March 2023. However, the net profit improvement is only due to a low base from the previous period, as a SARS review in 2023 hit Coronation with a R716 million tax expense. In 2023, the profit for the interim period was R22 million. Compared to the R697 million interim profit reported in 2022, the current net profit only represents a 0.57% improvement.
• Alexander Forbes released a trading update, saying it expects basic earnings per share to stay flat or decrease by 10% from the previous period. The company released a trading statement for its financial year that ended 31 March 2024. With its primary operations based in South Africa and the United Kingdom, this financial services company specialises in short-term and long-term insurance, health, retirement, and multi-manager investment solutions. Its full-year results are still being finalised and are expected to be released on or about 10 June 2024. While these results have not yet been audited, the board is reasonably certain that its results for the current year are expected to increase by more than 20% from the previous year.

It remains to be seen how these events will affect these companies and shareholders in the long term.