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The stock is down nearly 80% so far this year as it struggles with a massive debt burden. From Moneyweb.

WeBuyCars may make an interesting addition to the JSE as it is isolated from the troubles in SA Taxi, has relatively low gearing, and has a high cash conversion rate. Image: Supplied

Transaction Capital’s share price surged over 9% on Tuesday, its highest close in seven months, after the group reported that its SA Taxi division posted a R3.7 billion loss from continuing operations.

The share price has doubled since touching a low of around 400c in October but is still 84% off its peak above R50 reached in April 2020.

Tuesday’s jump in the share price appears to have been ignited by news of a potential separate JSE listing for its 75%-owned WeBuyCars and the possibility of finding an equity partner for the troubled taxi business.

The group’s three main businesses are SA Taxi, WeBuyCars, and loan recovery business Nutun, previously known as Transaction Capital Recoveries. The group is also looking at repositioning or disposing of non-core operations in Nutun.

Fall from grace

What was once one of the JSE’s best-performing shares came crashing to earth in March when a trading statement alerted investors to trouble on the farm, with the once-vaunted taxi business gasping for oxygen. The taxi business was smashed by Covid, floods in KwaZulu-Natal, and successive fuel price increases without a commensurate increase in fares.

Read: Transaction Capital plunges as it forecasts loss
Big holders dump Transaction Capital – but who’s been selling?
Transaction Capital does damage control after terrible two weeks

The country’s 250 000 taxis carry 15 million commuters daily, far more than state-subsidised businesses and trains. Shorter passenger rides and fare increases that have lagged costs mean less ability to service the loans used to finance taxis. When it became clear that the taxi industry would not quickly recover to pre-Covid levels, a decision had to be made to downsize.

All this came home to roost in 2023, along with news that outgoing CEO David Hurwitz sold 42% of his nearly four million shares ahead of the disastrous March 2023 trading update and before the share price tanked. Hurwitz explained that the shares had been pledged as security for a loan, a portion of which had fallen due. Hurwitz later resigned, handing over the reins to Jonathan Jawno, a co-founder of Transaction Capital, who takes over from January 2024.

Read/listen: Transaction Capital CEO David Hurwitz forced out
‘It’s really sad to be leaving on a low – but that’s life’: David Hurwitz

SA Taxi

SA Taxi was forced to absorb a R1.1 billion write-down in repossessed vehicles in the second half of the year to September 2023. The division has a complex debt structure, some 40% of which is owed to more than two dozen investors in so-called ‘pass-through structures’, where there is no fixed repayment schedule, and debt is paid as collections are received.

The latest results are all about restructuring and taking the pain now in expectation of a better year to come.

From here on, SA Taxi will focus on financing only pre-owned taxis, which will limit the affordability pressures faced by the country’s taxi operators.

It will also reduce the volume of repossessed vehicle stock.

Traditional banks tend to steer away from financing pre-owned taxis, which gives SA Taxi a clear run at this market if it can get it right. It’s had good success in what it calls ‘quality renewed taxis’ or QRTs, where taxis are given a complete mechanical and panel repair, and it recently made an investment in GoBid, a distribution channel for pre-owned and salvage vehicles. This should solidify its presence in this niche, albeit with lower volumes than previously reported.

The group says it should complete its restructuring of SA Taxi by March 2024, and that progress has been made in restructuring the balance sheet.

Some 25% of SA Taxi is owned by the SA National Taxi Council (Santaco), which will form part of any new structure going forward – not least because of a R285 million commitment to the organisation in this regard.

The group has committed R2.2 billion in equity funding to support SA Taxi, though no further funding is envisaged. Once the restructuring is done, a new equity partner will likely be sourced for the business.


WeBuyCars reported a 14% drop in earnings to R658 million (2022: R762 million) for the year, with higher interest rates and rising fuel prices weighing on pre-owned vehicle sales.

The company increased its national capacity to 10 399 parking bays and was selling at a rate of 12 000 vehicles a month in the second half of the year. Most sales are from private individuals, which helped boost finance and insurance income. Online sales now account for about 7% of total sales, up from 6.1% the prior year.

Read: WeBuyCars in landmark PPP to ease vehicle registration process

WeBuyCars may make an interesting addition to the JSE as there are no cross-default claims from other parts of the group. The company is isolated from the troubles in SA Taxi, has relatively low gearing, and has a high cash conversion rate.


Nutun’s results were the best of the three divisions, reporting a 10% increase in earnings to R479 million (2022: R434 million) from continuing operations. Most of its revenue comes from collecting on non-performing loans (NPLs), mainly in SA, with a smaller operation in Australia. The company has an NPL portfolio of about R5 billion, which it expects to grow to R7.6 billion in the medium term.

The future

The results were in line with a trading update issued a week ago: headline earnings per share from continuing operations at the group level are down to a loss of 99 cents a share (2022: profit of 224.4c).

“Transaction Capital will migrate from an operational group to an active investment holding company, with its holdings run on a fully decentralised basis and assessed against investment criteria. Accordingly, the group’s head office has been significantly reduced,” says the company in a Sens announcement.