Transaction Capital to protect welfare of people in taxi industry says CFO Sean Doherty
Sean Doherty: "When things do eventually take a turn for the better, we can thrive together."
Transaction Capital CFO Sean Doherty asserts that “just like in the global financial crisis, there will be winners and losers as well as lessons to take forward in how we run our companies and potentially societies.”
Transaction Capital, which owns Minibus taxi financier SA Taxi, provides developmental finance, insurance and other services to minibus taxi owners. The company also has an Auto Parts arm that supports minibus taxi repairs and maintenance.
In the early stages of the pandemic, the impact was first felt in Asian economies, where the company sources its supplies. In addition to the early signs from overseas suppliers, some board members, who had their finger on the pulse of the global economy started flagging some concerns.
As the alarm bells got resoundingly louder it became more apparent that a crisis was imminent. Sean recalls, “We started reviewing and updating continuity plans very quickly. We are an agile business and we responded with ensuring the basics were in place immediately, with things like availing sanitisers for employees. We were also updating disaster recovery plans, reducing the density of people working in any one site while ramping up for the eventuality of working remotely with things like procuring laptops to ensure that work from home would be successful.”
The initial days of the lockdown unleashed a wide range of considerations which constantly changed. He says, “We were concerned, and didn’t know what a lockdown would look like, but we were committed to protecting our employees and seeing how to support clients.” Being so closely aligned with the taxi industry which is a major economic driver and player in transporting millions of individuals daily, meant that the welfare of people in the sector was a key consideration in the decisions the company would be taking.
According to Sean, as clarity around the parameters of the lockdown surfaced, it was important to get a grasp on the regulatory environment and get insight into which parts of the business would be classified as essential and could operate under restricted circumstances. “The company had to grapple with the potential impact on cash and liquidity, and forecast various scenarios where it would start to encounter stress and flesh out plans on how to get through those times if they were to arise.”
Sean says constant communication and collaboration have been crucial to pushing through this experience, saying “The input of stakeholders including employees, clients, funders, shareholders, bankers and others who were important players in our various scenario planning has been invaluable. In these engagements we have been mindful about being straightforward, upfront and honest when approaching partners and sharing with them the scenarios we were anticipating and our plans to confront these scenarios should the need arise.”
Upon reflection, Sean feels that the company prepared adequately and where certain scenarios were unanticipated has reacted quickly to respond to the situation. “As a finance team we were already on Microsoft Teams and using Microsoft 365 so we were used to sharing documents, working on a variety of devices and having virtual meetings.” He shares.
He has observed that as a team, members have varying levels of comfort with working differently, but have mostly been able to adapt quickly and successfully. He explains that, “We have found our rhythm in terms of team meetings and accountability, identifying key areas of focus in the short term, and balancing what is required today against the medium-term concerns and the long-term health of the company.” He adds that the team has really stepped up and have been impressively effective given the challenges they have been faced with. “This has also been catalysed by the fact that there’s no choice; everyone has had to adapt and adjust quickly to events as they unfold.”
As the company approaches its half-year reporting period, sean says this will be interesting because, “We have to factor in the crisis, with all its accompanying uncertainties. How we look at things like expected losses in terms of IFRS 9 given that we are so early into the crisis, will be challenging. However, partnerships with auditors and other advisors have already been very valuable in assisting us in this regard.”
Sean suggests a healthy outlook is, “to realise that you can only control what you can, especially your attitude and behaviour. In its most tangible form, this means being as proactive, diligent and professional as you always would be and understanding and coming to terms with the fact that what you think is a reasonable assumption today will probably be different tomorrow.” He emphasises that as a business, you have to keep moving otherwise you risk being paralysed by the avalanche of heavy news, predictions of a deep recession and what that means for the country, the sectors we service, our clients and our employees.
Sean reflects that in this scenario, it’s not about being right, “because no-one is going to make perfect decisions, but about learning and translating that learning into action quicker than the change around you. In this regard, Transaction Capital has been very strong. As a leadership team, we have to keep cool heads so that people can follow that lead.”
He asserts that leveraging relationships and understanding that we are all part of various ecosystems will be an ongoing theme for the future. For instance, Sean anticipates that cash flow will be a pervasive issue in SA Inc., which may require restructuring certain transactions to share upsides and downsides. “This requires negotiating and finding common ground. Additionally, exploring how partners can share capabilities with each other, seek new revenue models and see where secondary markets could open up will require robust conversations and perhaps a less binary win-lose mindset.”
Now a few months into this crisis, Sean affirms that prior experience has been an asset during this period. especially that gained abroad “I was a very inexperienced accountant when I joined JP Morgan in London working through the 2008/9 financial crisis hit,” he recalls “Though this scenario is different, it requires the same sense of urgency and proactive responsiveness. Its helps when you have worked in different places, with different people and experienced a variety of situations through various economic cycles.”
As the country embarks on its journey to open up the economy, he explains that, “At Transaction Capital we can start to somewhat apply a medium-term lens on how we go forward; hopefully that looks like coming out with an intact team, a client base that can continue to do business with us, and trust us more because of how we have behaved and acted (and will continue to do so) through this crisis. And then when things do eventually take a turn for the better, we can thrive together.”
Overall, he hopes that the Covid-19 pandemic will help people realise how interlinked everything is, “We have been very insular in our views and we now see how nothing operates in a vacuum and hopefully society will start to look out for each other more going forward.”
In his spare time, Sean is a long-distance runner and plays tennis a few times a week. During the lockdown, he has enjoyed spending a lot of time with his wife and five-year-old son and if the running bug bites, he has clocked some kilometres on the treadmill.