Huge loss for SA Taxi

Transaction Capital has recorded a significant loss amidst the struggles of SA Taxi.

In its financial results for the year ended 30 September 2023, the group said that SA Taxi alone recorded a headline loss from continuing operations of R3.7 billion for the year – an increase from the R2.1 billion loss reported in H1 2023.

“This was driven primarily by a R1.1 billion increase in repossessed vehicle stock write-downs as further material changes were made to SA Taxi in H2 2023,” the group said.

“Subsequent to these once-off provisions, the net asset value of SA Taxi was R1.6 billion at year-end, including a R2.2 billion non-interest bearing shareholder loan to be capitalised.

The group said that the operational restructure of SA Taxi is expected to be completed by March 2024, which focuses on stabilising the business by cutting costs and repositioning the business in the pre-owned minibus taxi market.

SA Taxi’s balance sheet restructure is critical to SA Taxi’s viability, with the group hopeful that it can make a timely resolution with SA Taxi’s existing debt funders by March 2024.

“The successful restructuring of SA Taxi is predicated on existing debt funders remaining committed. Transaction Capital remains supportive of SA Taxi, however, no shareholder funding beyond March 2023 has been provided, nor is any envisaged going forward.

Despite not being as severely impacted as SA Taxi, WeBuyCars’ earnings were down 14% to R658 million.

In H2 2023, WeBuyCars recovered some momentum, with earnings only 4% down.

Volumes of vehicles sold also grew by 13% to over 140,000, with the group saying this momentum continued in the new financial year.

“Management is confident that the structural elements supporting the medium and long-term outlook for the second-hand vehicle market in South Africa remain positive. Trading across the whole car park positions WeBuyCars to adjust its buying and selling patterns through fluctuating market conditions to meet market demand,” the group said.

“As such, WeBuyCars is considered a uniquely positioned and exciting growth asset and is differentiated from any other players in the local second-hand vehicle market.”

Nutun’s FY2023 earnings also grew by 10% to R479 million, which the group attributed to solid growth in experience management services.

“Nutun’s capital-enabled services deployed capital conservatively during the year. This was on account of current non-performing loan market pricing dynamics as well as negative sentiment surrounding SA Taxi impacting Nutun’s access to funding,” the group said.

Looking at the group’s overall financials, headline earnings per share from continuing operations declined by -144% to a loss per share of -99.0 cents (FY2022: profit of 224.4 cents).

The group’s overall headline earnings per share also dropped to a loss of -100.1 cents per share (FY22: 219.8 cents).

The group noted that dividends have been suspended until it has been successfully restructured.

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