Noord Street taxi rank in Johannesburg. Picture: SUNDAY TIMES/ERIC MALEMA
Noord Street taxi rank in Johannesburg. Picture: SUNDAY TIMES/ERIC MALEMA

​Taxi financier Transaction Capital has opted not to pay an interim dividend and has written down its businesses by about R190m as it braces for the effect from Covid-19.

The group had paid an interim dividend of 27c per share previously, and has about 613-million shares in issue, with the group also saying it was being cautious in how it sees Covid-19 affecting its future cash flows.

Transaction Capital’s core operations are SA Taxi, which provides finance and insurance to minibus taxi operators, and Transaction Capital Risk Services (TCRS), which is involved in debt collection and payment processes.

In SA Taxi, an increase in impairment provisions of R126m was recognised, and in TCRS, the carrying value of its purchased non-performing loan portfolio was reduced by R65m. Both adjustments were before tax.

These adjustments resulted in the group’s core headline earnings falling 17% to R281m during the year. Headline earnings is a widely used profit measure in SA, stripping out one-off or exceptional items to give a better indication of the underlying performance of a business, while core refers to the company’s principal business.

The group said it was confident in the sector in which it operates and expected it to be one of the first to benefit from the easing of lockdown restrictions.

“Over the past few weeks, the Covid-19 pandemic has highlighted the indispensable nature of the minibus taxi industry as the dominant form of public transport in SA,” said CEO David Hurwitz.

“This, together with the minibus taxi industry’s defensive character, will assist in its quick recovery and smooth transition to normalised operating activities,” he said.

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