Integrated Annual Report
2020

INVESTMENT CASE

The agility and flexibility of the group and its divisions in responding to the volatile operating environment precipitated by the
COVID-19 pandemic during 2020 demonstrates the robustness of Transaction Capital’s business model, further substantiating its compelling and unique investment case:

Transaction Capital comprises a diversified portfolio of financial services assets

  • Two well established, autonomous and unique financial services businesses (SA Taxi and Transaction Capital Risk Services).
  • Data and technology led businesses, operating in specialised market verticals.
  • Businesses manage financial or credit-related alternative assets.
  • Recent investment in a 49.9% non-controlling interest in WeBuyCars establishes Transaction Capital’s third market vertical.
  • Positioned in attractive market segments occupying leading market positions.
  • Highly defensive, context-relevant businesses able to withstand difficult economic conditions.
  • Deep vertical integration enabling the application of specialised expertise to mitigate risk, participate in margin and provide a broader service to clients.
  • Via a diversified business model:
    • Unique blend of highly cash generative and capital-related businesses.
    • Diversified revenue model across adjacent market segments and geographies.
established as a scalable operating platform

  • Decentralised businesses that are self-sustaining and sizable in their own right.
  • Technology-driven, market leading operating platforms that manage our assets.
  • Scalable via development of new products and expansion into new markets (SA Taxi and TCRS) and through innovation in introducing new organic and acquisitive growth opportunities (Transaction Capital).
led by an entrepreneurial owner-manager team

  • I dentify, assess, develop and partner with entrepreneurial, innovative and experienced founders, owners and managers of businesses.
  • Strong ownership culture and materially invested management teams.
  • Empowered, entrepreneurial, innovative, proven and long-serving leadership.
  • Specialised intellectual capital applied over a much smaller asset base than in larger organisations.
with a bespoke capital structure

  • Conservative capital management philosophy to fund organic growth and acquisition activity.
  • Well capitalised at holding company and divisional levels.
  • Unfettered access to liquidity and proven ability to raise debt and equity from a diversified range of local and international investors.
  • An optimal balance of debt and equity, with limited exposure to liquidity and refinancing risk.
  • Positive asset-liability gap maintained.
underpinned by a robust governance framework and sound governance practices

  • Experienced, diverse and independent directors at group and subsidiary level.
  • Institutionalised governance, regulatory and risk management practices.
  • Conservative accounting policies (including the early adoption of IFRS 9 and IFRS 17).






generating risk-adjusted interest returns and capital appreciation

  • Value-led investment approach.
  • Investment objective that yields:
    • Attractive risk-adjusted interest returns from our asset portfolios.
    • Enhanced by capital appreciation in the value of the operating platforms.
which positions the group for sustainable high-quality earnings growth

  • Track record of high-quality earnings growth with high cash conversion rates and strong organic growth prospects.
  • Identification of opportunities to leverage our high-IP, leading technologies and low-cost operational infrastructure.
  • Expansion into attractive adjacent market segments, related alternative asset classes and geographic markets.
  • Established expertise to assess, mitigate, underwrite and price credit risk in originating new assets or acquiring existing assets.
  • Unrelenting investment into and precise implementation of innovative strategic initiatives.
and the delivery of meaningful social impact.

  • Businesses deliberately positioned in relation to demographic and socioeconomic trends, to deliver shared value through commercial returns and meaningful and positive social impact.
  • Economic, social, environmental and governance principles embedded throughout our operations.
  • SA Taxi enables mobility access for millions of minibus taxi commuters through tailored developmental financing and support services for SMEs, which:
    • Empowers SMEs through financial inclusion.
    • Promotes social inclusion by helping millions of commuters to access services and economic opportunities.
    • Improves the public transport industry for all stakeholders.
    • Promotes climate resilience.
  • TCRS promotes stable, functioning credit markets, facilitates financial rehabilitation and enables efficient payment systems, by:
    • Driving economic growth by promoting credit market stability.
    • Rehabilitating debtors ethically and responsibly.
    • Improving financial intermediation for all stakeholders.
  • WeBuyCars facilitates private vehicle ownership, which enables mobility in a market characterised by limited public transport and long travel distances especially outside urban centres, by:
    • Providing a reliable, affordable and convenient alternative with a high level of customer service when buying and selling a vehicle in South Africa.
    • Leveraging data and technology for fair pricing of vehicles to sellers and buyers.
    • Providing an independent vehicle condition report to instil buyer confidence.