Africa-Press – South-Africa. Shares of SA’s biggest taxi financier and Transaction Capital plunged another 20% on Wednesday, after it delivered a profit fall that was worse than guided.
It reported a loss of almost R1.9 billion for its half-year, from a profit of R615 million previously. The company didn’t declare a dividend.
Core continuing earnings per share, the group’s preferred profit measure which excludes certain non-operational items, fell 48% in the half-year to end March, worse than the up-to 46% it warned of in March.
In early afternoon trade on Wednesday, Transaction’s shares were down almost 17%, having now crashed more than 80% so far in 2023.
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Transaction, valued at just over R8 billion on the JSE, has been pummelled in 2023 after it warned of strain on its SA Taxi business, with operators struggling with high fuel costs and load shedding, which is cutting into trip numbers. Transaction, which owns 70% of WeBuyCars, has also admitted it misjudged the sharp fall in used-car prices as global supply chains normalised.
CEO David Hurwitz said during an investor presentation on Wednesday that the company had seen a “cyclical deterioration” in the used vehicle markets, but the company has since adjusted its stock to match current trading conditions.
Hurwitz saying despite an expectation of muted full-year performance, WeBuyCars was still gaining market share.
Pressure on taxi operators has also prompted the company to put its SA Taxi Auto repairs business up for sale. It has restated this business as a “discontinued operation”, with the company restating its prior period results to reflect this.
Transaction Capital also took a R1.9 billion restructuring hit in its 2023 year. The company has decided to account for all the once-off restructuring costs immediately, and it needs to account for lower levels of future revenue and profitability, which requires adjustments to provisions.
This article has been corrected to confirm that the restated headline earnings were higher.
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