Integrated Annual Report

Business model and outcomes

Transaction Capital invests in carefully selected alternative asset classes in credit-related and other highly specialised market verticals. Our strong divisional management teams manage these assets in well-governed, agile and efficient operating platforms, which apply their intellectual capital to deliver appropriate risk-adjusted financial returns and meaningful social impact. The industries we choose are typically characterised by low consumer confidence and trust, which make the good standing of our businesses and trust-based relationships with their stakeholders a powerful competitive advantage.

Our decentralised operating platforms are tasked with deepening vertical integration along their respective industry value chains. This supports their ability to deliver differentiated customer value propositions that expand their addressable markets and unlock new opportunities for revenue growth and improved operational efficiencies, supporting strong and consistent commercial returns. Their deliberate positioning in relation to socioeconomic dynamics enhances their social relevance, and as part of the Transaction Capital group they bring formalisation and good governance practices to their respective industry sectors.


  • Specialism in investing in and operating alternative assets in credit-related and other highly specialised market verticals where consumer confidence and trust has been low.
  • Superior data, leading-edge technology and analytics capabilities.
  • Deep vertical integration enabling the application of specialised expertise to mitigate risk, participate in margin and provide a broader service to clients.
  • Directors and executives with skills and experience relevant to the group’s highly technical and specialised businesses and strategic growth plans, and the expanding risk and opportunity profiles of our businesses.
  • Diversified revenue model across adjacent market segments and geographies.
  • Empowered, entrepreneurial, innovative, proven and long-serving leadership.
  • Strong ownership culture and materially invested management teams.
  • Experienced, diverse and independent directors at group and subsidiary level.
  • Total number of employees: 3 965.
  • Track record of high-quality earnings growth with high cash conversion rates.
  • Robust balance sheet with ample capacity to fund strong organic growth prospects, and an adequate balance between equity and debt funding:
    • Total equity issued in 2020: R889 million
      • R560 million raised via accelerated bookbuild in June 2020.
      • R329 million equity issued in September 2020 to part-fund investment in WeBuyCars.
    • Debt facilities:
      • R1 billion undrawn approved facilities available at holding company for strategic growth initiatives.
      • Undrawn debt facilities to fund expected loan origination at SA Taxi and the acquisition of non-performing consumer loan portfolios by TCRS as principal, into 2022.
  • The group’s capital structure, and the long-term nature of our assets, provide sufficient financial flexibility and headroom should recessionary conditions intensify.
  • Occupy leading positions in our respective market segments.
  • Deliberate alignment of financial and social capital investment to realise transformation objectives and commercial goals.
  • Embedded environmental, social and economic (ESE) frameworks in our wholly controlled divisions.
  • Constructive relationships with industry associations and representatives.
  • Institutionalised governance, regulatory and risk management practices.



Identify alternative assets in credit-related and other specialised market verticals, in which our core risk and capital management skills provide distinct competitive advantages.


Apply core skills to accurately assess and mitigate risk, and underwrite and price assets, for the purpose of servicing, originating or acquiring them.


Identify, develop and partner with entrepreneurial, innovative and experienced founders and managers of businesses, in building and scaling highly competitive, efficient, technology-driven operating platforms that manage our assets.


Mobilise an optimal balance of equity and debt capital to fund the growth of business platforms and their underlying assets.


Develop our business platforms to scale, with competitive value propositions, diversified and resilient revenue streams, and best-of-breed data, technology and processing capability to ensure operational effectiveness and facilitate growth.


As business platforms are established for organic growth, identify new opportunities to redirect capital resources to deepen vertical integration and expand into adjacent market segments, related asset classes and new geographic markets, thereby growing our addressable market and earnings base.


The strategic positioning of our two established divisions, SA Taxi and TCRS, in relation to socioeconomic dynamics and their diversification within and across highly defensive market sectors have increased their relevance in the COVID-19 environment and demonstrates the value of deepening their participation within their respective market verticals.

The transaction with WeBuyCars, which establishes the group’s third specialised market vertical adjacent to SA Taxi, is a partnership with likeminded founders that deepens the group’s presence in the vehicle market and represents a vote of confidence in South Africa’s economic recovery and longer-term growth prospects.


Transaction Capital’s governance practices means that our divisions are held to the same standards of conduct and ethics as required of listed entities in South Africa, which contributes to formalising and enhancing the reputation of the industries our divisions serve and building a trusted brand within these industries.


Risk assessment, management and mitigation are core competencies of the group, both in assessing, acquiring and funding alternative assets and managing operational risk within our divisions. The group’s risk management acuity was demonstrated in its effective response to the impacts of the COVID-19 pandemic.


The deliberate positioning of our divisions in relation to socioeconomic dynamics and the defensiveness of their market segments supported their resilience against the impacts of the COVID-19 pandemic and positions them for even greater relevance in a post COVID-19 environment.

The group depends on its stakeholders for access to the resources required to undertake its activities and achieve its strategic objectives, while cognisant that these activities necessarily impact on stakeholders’ ability to meet their own value objectives. The value relationships between the group and its stakeholders are shown below, with the most relevant stakeholders linked to our commercial outcomes and social impact themes.

We have made good progress in developing sustainability themes and outcome measures as part of the environmental, social and economic (ESE) frameworks introduced in SA Taxi and TCRS, to provide stakeholders with an objective view of the group’s consolidated impacts and to inform our long-term strategies in this regard. The United Nations’ Sustainable Development Goals (SDGs) informed this process, with a subset of five goals selected, to provide a consistent and comparable basis for reporting divisional ESE impacts. The social outcomes presented below reflect this work, and we will continue to add to and refine these measures in subsequent reporting.


Stakeholders impacted

Dividend per share (cents)
Core headline earnings per share from continuing operations (cents)
Core headline earnings from continuing operations (Rm) Closing Transaction Capital share price (cents)
2018 Credit impairments (SA Taxi)
2019 Adjustments to carrying value of purchased book debts (TCRS)

Pre-COVID-19, the group maintained its track record of growth and financial outperformance. The group is well placed to return to its long-term track record of growth from the 2021 financial year (applying 2019 as the base year).

The impacts of COVID-19 subdued the group’s financial performance for 2020, but its operations proved resilient:

  • Core pre-provision profit up 10% to R1 807 million (2019: R1 646 million), despite operational disruption of COVID-19.
  • Performance impacted by operational disruptions experienced due to COVID-19 over six months from March to end September 2020:
    • SA Taxi
      • Number of loans originated down 27% (2020: 6 250; 2019: 8 591).
      • Subdued non-interest revenue linked to decrease in loan originations.
      • Gross written premium increased 10% to R907 million (2019: up 20% to R823 million).
    • TCRS
      • Acquisition of NPL Portfolios down:
        30 September 2020: R733 million 31 March 2020: R177 million
        30 September 2019: R1 186 million 31 March 2019: R749 million
      • Reduction in volumes of matters handed over for collection.
  • Increased provision coverage and conservative approach applied to the anticipated impact of COVID-19 on future cash flows subdued the group’s results but protected the balance sheet:
    • SA Taxi
      • Provision coverage:
        30 September 2020: 6.7%
        31 March 2020: 5.4%
        30 September 2019: 4.8%
      • Credit impairments (before tax):
        30 September 2020: R836 million
        31 March 2020: R338 million
        30 September 2019: R322 million
    • TCRS
      • Adjustments to the carrying value of purchased book debts (before tax):
        30 September 2020: R588 million
        31 March 2020: R161 million
        30 September 2019: R159 million
  • Positive operational leverage supported resilient performance:
    • Total income up 12%.
    • Total operating costs up 11% (excluding once-off COVID-19 related costs of R74 million and adjustments to carrying value of purchased book debts of R588 million).
  • Impact of COVID-19 on 2020 financial performance:
    • Core headline earnings from continuing operations attributable to the group down 65%.
    • Core headline earnings per share from continuing operations down 66%.



Stakeholders impacted:

Transaction Capital’s focus on traditionally under-served market segments where it can make a meaningful social impact supports economic growth and development:

  • SA Taxi empowers small- and medium-sized enterprises (SMEs) through financial inclusion:
    • Proportion of SA Taxi’s SME customers classified as previously under-banked or financially excluded: ~80%.
    • Percentage of loans provided to black-owned SMEs: 100%.
    • Total number of direct jobs created in financed fleet in 2020: 11 250 (2019: 15 464; 2018: 13 921).
  • TCRS drives economic growth by promoting credit market stability by unlocking value from its clients’ non-performing loan portfolios:
    • Value recovered for clients through contingency and fee-for-service (FFS) collections in South Africa: R2.6 billion (2019: R2.8 billion; 2018: R3.2 billion).
    • Selling their NPL portfolios frees up operational capacity and capital within TCRS’s client base, enabling them to resume lending:
      Original face value:
      R32.3 billion
      Remaining face value:
      R22.9 billion
      Capital outlay:
      R3.5 billion
      Provision release1:
      ~R12 billion – R14 billion
      Risk-weighted asset release2:
      ~R6 billion – R7 billion
      Regulatory capital release:
      ~R700 million – R800 million
      1. The provision release was estimated using the expected losses per the South African banks’ regulatory Pillar III reports. This estimate was also applied to non-bank
      non-performing loan (NPL) sellers.
      2. The risk-weighted assets and regulatory capital releases were estimated per the South African banks’ regulatory Pillar III reports. These estimates are only
      applicable to South African banks.

Stakeholders impacted:


Helps millions of commuters access services and economic opportunities:

  • Number of commuter trips per day by SA Taxi’s fleet:
    1 973 400 (2019: 1 946 460;
    2018: 1 837 020).
  • % of repeat customers (indicating financed operator satisfaction levels):
    28% (2019: 29%;
    2018: 31%).


Is a trusted and respected partner.

  • Ranked 1st (69%) or 2nd (18%) in 87% of 191 mandates on client panels where TCRS is represented.
  • Proportion of complaints received through debtor complaints channel resolved:
    • In 2 months: 82%.
    • In 6 months: 95%.

Rehabilitates debtors ethically and responsibly.

  • TCRS average fees per account of R109 versus R1 176 maximum permitted per Debt Collection Act.1

Rehabilitates and educates debtors to enable expedited re-entry into credit markets.

  • Offers affordable monthly payment plans:
    Average payment amount before defaulting: R9862 Promise to pay:
    Amount finally agreed:
  • Rehabilitates on average 280 000 debtors within a year to the value of R325 million.
1. The Debt Collection Act permits fees and expenses to be recovered from the debtor in respect of items 1 to 7 of the Fee and Expense Annexure, which shall not exceed the capital amount of the debt or R1 023.00 (excluding VAT), whichever is the lesser. This excludes any attending taxation and fees related to the instalment.
2. The average payment plan prior to default was sourced from the various credit bureaus.

Stakeholders impacted:


  • Number of employees: 3 9651 (2019: 4 662).
  • Female employees: 59% (2019: 62%).
  • Voluntary employee turnover rate: 16% (2019: 18%).
  • Total employee turnover rate: 34% (2019: 24%).


  • Black employees as a % of employee headcount: 88% (2019: 90%).


  • % employees under the age of 35: 46% (2019: 45%).
  • Average training hours per employee per year: 6 hours3 (2019: 9 hours).

TCRS South Africa

  • % employees under the age of 35: 58% (2019: 49%).
  • Average training hours per employee per year: 24 hours3 (2019: 34 hours).
1. The decrease in the number of employees is predominantly due to a Section 189 process in TCRS that affected 544 employees. See Q&A with David McAlpin / TCRS CEO for more detail.
2. Various national and federal legislation in Australia governs the collection of data relating to ‘protected attributes’, thus these figures exclude 706 employees (2019: 700 employees) in our Australian operations.
3. Decrease due to the operational impacts experienced during the COVID-19 pandemic.

Stakeholders impacted:


Contributes to a safer and more reliable public transport industry to the benefit of all stakeholders:

  • Total value of SANTACO dividend to date: R68.5 million.
  • Value of investments in taxi infrastructure: R3.4 million (2019: R5.9 million; 2018: R14.1 million).


Works to better financial intermediation for all stakeholders:

  • Value of electronic transactions processed by Transaction Capital Payment Solutions: R37.1 billion (2019: R38.4 billion; 2018: R33.4 billion).
  • Percentage of claims paid by RoadCover to its clients through the Road Accident Benefits Scheme: 100%.

Stakeholders impacted:


  • % net profit after tax (NPAT) dedicated to socioeconomic development (SED) programmes: 4.1% (2019: 1.4%; 2018: 4.3%).
  • Donated for COVID-19 related initiatives: ~R8.9 million.


  • % NPAT dedicated to SED programmes: 1.6% supporting 315 people (2019: 1.1% supporting 365 people; 2018: 1.4% supporting 115 people).

Stakeholders impacted:


  • New minibus taxis sold (supporting lower emissions): 4 064 (2019: 6 025; 2018: 5 876).
  • Pre-owned minibus taxis sold (supporting circular economy): 2 186 (2019: 2 566; 2018: 1 858).
  • Total GHG emissions of SA Taxi-financed fleet: 763 392 tCO2e.
  • Total GHG emissions abatement: 9.9% (2019: 9.8%; 2018: 9.8%).


  • Continued initiatives to reduce electricity and water consumption and manage waste in our operations, which are considered to have a low overall impact already.


Value for us
Accessible and affordable capital supporting the right balance of equity and debt funding, to fund organic and acquisitive growth. A workforce that is aligned to group and divisional strategies and embraces our entrepreneurial, high-performance, ethical and inclusive culture, to effectively deliver market-leading value propositions to clients. Income generated from providing products and services; opportunity to broaden our addressable markets by leveraging good relationships with clients; utilising our rich data to improve and develop new products and services. Good standing with regulatory authorities; contributions to industry developments and promotion of an enabling regulatory environment; reputation as an accessible and invested social partner. Positive relationships with industry stakeholders and relevant governmental departments; opportunity to deliver products and services with social purpose; uninterrupted supply chains and value for money when procuring from suppliers.
Value for them
Quality earnings growth and capital appreciation even in difficult economic conditions; reliable risk-adjusted interest returns; meaningful social impact for development finance institutions. Fair remuneration and benefits; career progression within a growing group; a positive and inspiring work environment; being part of an organisation that delivers positive social impacts. Access to products and services that are innovative, cost-effective and differentiated, augmented with rich data, in industries that stand to benefit from greater formalisation and an ethical and responsible approach to doing business A compliant and supportive sector participant; a committed partner in achieving transformational and developmental objectives. Contributing to better industries through greater formalisation and strong governance practices; improving mobility access for South Africans; growth in tax revenue, employment opportunities and supplier base through continued growth of divisions.