Transaction Capital Limited                         TransCapital Investments Limited
     (Incorporated in the Republic of South Africa)         (Incorporated in the Republic of South Africa)
         Registration number: 2002/031730/06                    Registration number: 2016/130129/06
                 JSE share code: TCP                                 Bond company code: TCII
                 ISIN: ZAE000167391                                LEI: 378900AA31160C6B8195
    (“Transaction Capital” or “the company” or “the
                         group”)




TRADING STATEMENT AND PRE-CLOSE OPERATIONAL UPDATE IN RESPECT OF
THE YEAR ENDING 30 SEPTEMBER 2023

Trading Statement
In the first half of the 2023 financial year (“FY2023”), Transaction Capital communicated an expected decline
in full year core, basic and headline earnings per share from continuing operations. In particular, the ongoing
macroeconomic challenges affecting South Africa’s minibus taxi industry, which started at the onset of the
Covid-19 pandemic in March 2020, prompted an aggressive restructuring of SA Taxi to right-size the
business. This restructuring process continues to impact Transaction Capital’s full year core earnings per
share (“core EPS”), headline earnings per share (“HEPS”) and basic earnings per share (“basic EPS”).

In accordance with section 3.4 (b) of the JSE Limited Listings Requirements, shareholders are advised that
given the factors discussed in the operational update below, core EPS, HEPS and basic EPS are expected
to be lower than the ranges reported in the trading statement released on SENS on 20 March 2023.

A further trading statement will be issued to provide specific guidance once the group has reasonable
certainty regarding the core EPS, HEPS and basic EPS ranges for the full year ending 30 September 2023.

Shareholders are advised that the forecast information contained in this announcement has not been
reviewed or reported on by the group’s external auditors and is the responsibility of the board.

Operational update
Salient features
•    Management has made progress regarding the restructure of SA Taxi’s operations and balance sheet,
     resulting in a more stable business. However, this restructuring process and the related non-recurring
     costs incurred to get the business to a sustainable base, will impact Transaction Capital’s full year core
     EPS, HEPS and basic EPS.
•    In line with the half year performance, WeBuyCars’ FY2023 earnings are expected to be approximately
     20% down in comparison to the prior year.
•    Post concluding the agreement with Standard Bank, Gomo is anticipated to scale substantially over the
     next few years.
•    Nutun’s FY2023 earnings are expected to grow relative to the prior year, but at a lower rate than
     previously communicated.

Mobalyz and SA Taxi
Earlier this year, it became apparent that the minibus taxi environment was unlikely to rebound in line with
SA Taxi’s original expectations. In light of this, management initiated an aggressive restructuring and
rebasing of SA Taxi’s business model, over and above the more tactical adjustments consistently
implemented from March 2020 to the end of December 2022.

Since then, the operational restructuring of SA Taxi has resulted in a more stable business, including:
1. The successful implementation of management changes communicated in the SENS announcement
    released on 20 June 2023.
2. An aggressive cost reduction and restructuring towards a more variable cost model is almost complete
    and will result in annualised savings of approximately R500 million per annum.
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3.   Focus on higher quality credit risk has resulted in a lower absolute quantum of loans originated. Initial
     indicators are positive and show that this credit tightening is achieving improved collection ratios on
     recent loans originated.
4.   Collection strategies have been supplemented through the appointment of Nutun as an outsourced
     partner, which is yielding greater collection efficiency. Despite this, loan collection rates remain below
     pre-Covid levels on the historic portfolio.
5.   The operations have been simplified, including the downscaling and potential sale of SA Taxi’s auto
     refurbishment and repair facilities to support lower refurbishment volumes and lower loan origination
     volumes.
6.   As part of an aggressive focus to reduce the quantum of repossessed vehicles held in stock, SA Taxi
     continues to introduce new channels and strategies to dispose of repossessed vehicles, in addition to
     refurbishing repossessed vehicles into quality renewed taxis (“QRTs”) which are resold and refinanced
     into the minibus taxi industry. These include the selling and refinancing of repossessed vehicles as
     second-hand taxis, auction sales and salvage of vehicles through GoBid.
7.   All of the above initiatives have the effect of improving cash flow generation.

In parallel, Transaction Capital has progressed the restructure of SA Taxi’s balance sheet. A Mobalyz Debt
Sustainability Committee (“the Committee”) comprising group executives, independent non-executive
directors and external advisors has been established under the chairmanship of Mr Chris
Seabrooke. Engagement between the Committee and debt funders has been constructive and positive to
date.

WeBuyCars
The structural elements supporting the medium and long-term outlook for the used vehicle market in South
Africa remain positive. Demand for more affordable used vehicles remains high as elevated inflation and
rising interest rates erode disposable income. WeBuyCars has consistently gained market share in FY2023,
despite a tough economic environment as well as a recovery in the supply of new vehicles that have put
pressure on average selling prices, margins and inventory turns. However, it is encouraging that all of these
measures have improved in the last few months, and the adjustment in our stock and trading mix towards
cheaper vehicles is now aligned with current consumer demand.

WeBuyCars is prioritising growing into its existing infrastructure to increase cost efficiencies, improve unit
economics and create operational leverage. As such no further branch expansion has taken place in the
second half of FY2023. The number of vehicles bought and sold continues to increase with the average
number of vehicles sold per month remaining at approximately 12,000 in the second half of FY2023. The
increase in sales volumes continues to be driven by sales to private individuals, which facilitates an increase
in finance and insurance (“F&I”) income. F&I income is expected to continue increasing as WeBuyCars
evolves its offering through Gomo and other third-party providers.

Gomo
The arrangement announced on SENS on 19 June 2023, with a leading South African bank (which we now
confirm to be Standard Bank), has facilitated significantly increased volumes as Gomo expands nationally.
Gomo is now positioned to maximise this growth opportunity and is anticipated to scale substantially over
the next few years.

Nutun
Nutun is delivering strong growth in customer experience (“CX”) services revenue from a diversified client
base in new geographies and new sectors. Revenue from CX services, which now makes up more than 50%
of Nutun’s total revenue, is primarily generated from UK based clients but also includes mandates in South
Africa, Australia and more recently the USA.

The current environment presents Nutun with an opportunity to acquire non-performing loan (“NPL”)
portfolios at risk appropriate prices. Over recent months Nutun has been selective and conservative when
pricing NPL portfolio acquisitions with prices being below sellers’ expectations. Deployment of capital has
thus been lower, resulting in the performance of the recoveries segment being curtailed by lower levels of
book buying.

Pressure on disposable income fuelled by increased interest rates, inflation and elevated levels of
unemployment has impacted the consumer’s propensity to repay outstanding debt. This is exacerbated
further by loadshedding, which impacts Nutun’s ability to contact consumers as well as the quality of
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consumer interactions. Despite these challenges, collection performance remains strong, reaffirming the
robustness of Nutun’s technology platform and call centre intellectual property.

Notice of investor webinar
Shareholders are advised that Transaction Capital will host a pre-close investor webinar at 12h00 (South
Africa time) on Tuesday, 12 September 2023.

Please register for the webinar on this link https://78449.themediaframe.com/links/transaction230907.html
A replay will be available shortly after the end of the call on the Transaction Capital website:
https://www.transactioncapital.co.za/investor-relations-overview/transaction-capital-limited/

Transaction Capital’s results for the year ending 30 September 2023 will be released on SENS on or about
Tuesday, 5 December 2023.

Rosebank
11 September 2023

Enquiries:
Nomonde Xulu - Investor Relations
Email: nomondex@transactioncapital.co.za

JSE Sponsor: Investec Bank Limited
JSE Debt Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)




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